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Dax Index News: Market Sentiment Turns Bullish as DAX Eyes 19,200 – Expert Analysis
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Key Points:
- DAX hits record high at 19,002, driven by tech and auto stock gains, with hopes of a soft US economic landing.
- German producer prices forecast a 1.0% YoY drop, influencing ECB rate path and potentially boosting DAX-listed stocks.
- ECB President Lagarde's speech on Friday. Support for an October rate cut could push the DAX toward 19,200.
In this article:
Market Overview
On Thursday, September 19, the DAX rallied 1.55%, reversing a 0.08% loss from the previous day to close at a record high of 19,002.
Key DAX Market Movers
Rate-sensitive tech stocks, Infineon Technologies and SAP advanced by 2.19% and 3.27%, respectively.
Lower borrowing costs and hopes for a soft US economic landing drove demand for auto stocks. Daimler Truck Holding rallied 2.64%, while BMW and Mercedes Benz Group advanced by 2.17% and 2.43%, respectively.
German Producer Prices in Focus
On Friday, September 20, German producer prices could influence sentiment toward the ECB rate path. Economists expect producer prices will fall by 1.0% year-on-year in August, down from a 0.8% decline in July.
A more significant decline could fuel speculation about a Q4 2024 ECB rate cut, possibly driving demand for DAX-listed stocks. A more dovish ECB rate path would lower borrowing costs, boosting company profits and share prices. As demand weakens, producers reduce their prices, which lowers consumer prices.
Other stats from the Eurozone economic calendar include consumer confidence figures. However, these are unlikely to impact demand for DAX-listed stocks. Inflation remains the focal point.
ECB President Lagarde in Focus
Later in the session on Friday, ECB President Christine Lagarde is also on the calendar to speak. Insights into the ECB rate path and the economic outlook could influence demand for DAX-listed stocks. Support for an October ECB rate cut may push the DAX toward 19,200.
US Initial Jobless Claims
On Thursday, US initial jobless claims drove buyer demand for riskier assets. Initial jobless claims dropped from 231k (week ending September 7) to 219k (week ending September 14). The claims data signaled a resilient US labor market supporting expectations of a soft US economic landing.
A steady labor market could support wage growth and consumer spending, which contributes over 60% to the economy.
Expert Views on the US Labor Market
The Portfolio Manager at HY Market, Mario Cavaggioni, commented on the jobless claims report, stating,
“Jobless Claims 219k (est 230k, last 231k) Continuing Claims 1.83m (est 1.85m, last 1.84m). Both JC and CC show lower trend, no signs that a sharp deterioration in labor mkt is happening…”
US Market Trends
On Thursday, September 19, the US equity markets recovered their losses from the Wednesday session. The Nasdaq Composite Index rallied 2.51%, while the Dow and the S&P 500 saw gains of 1.26% and 1.70%, respectively.
US Economic Calendar
On Friday, investors should monitor comments from the Fed. Philly Fed President Patrick Harker is on the calendar to speak. Insights into the economic outlook, the labor market, and the Fed rate path could affect demand for DAX-listed stocks.
Optimism toward a soft landing and support for multiple Q4 2024 Fed rate cuts could push the DAX toward 19,200. Conversely, concerns about a hard landing and calls for aggressive Fed rate cuts to bolster the economy could pull the DAX down toward 18,500.
Before the September Fed rate cut, Harker favored 2 to 3 rate cuts in 2024.
Near-Term Outlook
Near-term DAX trends will hinge on producer price figures from Germany and central bank chatter. A sharper decline in producer prices and support for ECB and Fed rate cuts could drive demand for Dax-listed stocks.
However, caution remains as futures markets indicate a potential pullback, with DAX and Nasdaq mini futures down by 66 and 50 points, respectively.
Investors should stay alert to central bank chatter and economic indicators. Stay informed with our latest news and analysis to manage your risks effectively.
DAX Technical Indicators
Daily Chart
The DAX remains well above the 50-day and 200-day EMAs, affirming bullish price signals.
A breakout from the Thursday high of 19,045 could support a move toward 19,200. A break above 19,200 may give the bulls a run at 19,350.
German producer prices and central bank commentary require investor consideration.
Conversely, a drop below 19,000 could give the bears a run at 18,750. A fall through 18,750 may bring the 50-day EMA into play.
The 14-day RSI at 64.19 indicates a move to 19,200 before entering overbought territory.
About the Author
Bob Masonauthor
With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.
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