Dax Index News: PMI and GDP Data Loom as DAX Eyes 19,350 Resistance

DAX Ends Four-Day Losing Streak: How Will the PMIs Impact Sentiment?

The DAX advanced by 0.74% on Thursday, November 21, reversing a 0.29% loss from Wednesday, closing at 19,146. Geopolitical risks from the Ukraine war and US tariff jitters sent the DAX to a low of 18,900 before finding support.

Energy Stocks Advance on Ukraine War Concerns

Siemens Energy AG led the gains, rallying 3.62%. Concerns about the escalation in the Ukraine war pushed oil prices higher, boosting demand for energy-linked stocks. Defense stock Rheinmetall AG advanced by 1.61% on potential increases in defense spending amid increasing geopolitical risk.

Insurers also contributed to the gains after Zurich Insurance released upbeat three-year projections. Hannover Re and Munich Re saw gains of 2.55% and 1.92%, respectively.

However, auto stocks continued struggling amid looming US tariffs on EU goods.

Porsche AG Preferred Stock extended its losses from Wednesday, dropping 1.92%, while BMW and Porsche fell by 0.82% and 0.76%, respectively. Volkswagen and Mercedes Benz Group also posted losses.

German Economy in the Spotlight

On Friday, November 22, Germany’s finalized GDP and flash private sector PMIs require consideration. According to the preliminary report, the German economy expanded by 0.2% quarter-on-quarter in Q3 2024. A downward revision could weigh on the DAX amid prospects of US tariffs, potentially dragging the DAX toward 18,750.

Economists expect Germany’s HCOB Manufacturing and Services PMIs to remain steady in November. However, contractions across the private sector could fuel concerns about the economy, likely offsetting the effects of a more dovish ECB rate path on the DAX.

Weaker-than-expected PMIs could also signal a DAX fall toward 18,750. Conversely, upbeat PMIs may push the Index toward 19,350.

Expert Views on US Tariffs and the EU Economy

US tariffs on EU goods remains a talking point. Oxford Economics European Macroeconomic specialist Daniel Kral remarked on the potential impact of US tariffs, stating,

“The EU not only exports more to the US than to China – exports to the US are equivalent to the UK and China (2nd and 3rd largest markets) *combined*. And exports to China and the UK have been declining as a share of GDP, with the US being a key offset. Code red for the EU…”

US Labor Market Data Signals Resilient US Economy

On Thursday, US jobless claims declined from 219k (week ending November 9) to 213k (week ending November 16). The unexpected fall in claims signaled a robust labor market, potentially boosting private consumption. Private consumption accounts for over 60% of the US GDP.

The DAX responded to the upbeat labor market data, climbing to a session high of 19,153.

US Equity Markets Gain Momentum on Upbeat Labor Market Data

On Thursday, November 21, US equity markets ended the session in positive territory. The Nasdaq Composite Index rose by 0.03%, while the Dow and the S&P 500 advanced by 1.06% and 0.53%, respectively.

Reports of the US Justice Department wanting Google to sell Chrome weighed on the Nasdaq as Alphabet Inc. (GOOGL) slid by 4.74%.

US Services PMI to Crucial for the Fed

Turning to Friday’s US session, the crucial S&P Global Services PMI could influence the Fed rate path and market risk sentiment.

Economists predict the Services PMI will increase from 55.0 in October to 55.2 in November. A higher-than-expected headline PMI and upward trends in job creation and prices could reduce bets on a December Fed rate cut.

A more hawkish Fed rate path may support a DAX retreat toward 18,750. Conversely, softer prices, job creation rates, and a steady headline PMI may signal a soft US economic landing and December rate cut. Rising expectations for a December Fed rate cut could drive the DAX toward 19,350.

Other economic indicators, including the Michigan Consumer Sentiment Index, will likely have less impact on demand for DAX-listed stocks.

Near-Term Outlook

In the near term, DAX trends will hinge on private sector PMIs, central bank commentary, and geopolitical risk. Rising geopolitical risk, hawkish Fed comments, and an upbeat US Services PMI could impact demand for DAX-listed stocks. Conversely, easing geopolitical tensions, weaker US services sector activity, and support for a Fed rate cut may push the DAX higher.

As of Friday morning, futures signaled a mixed session. DAX futures advanced by 42 points, while the Nasdaq mini futures were down by 43 points.

Investors should closely track the Ukraine war-related updates, private sector PMI numbers, and central bank commentary for market cues.

DAX Technical Indicators

Daily Chart

After Thursday’s recovery, the DAX sits above the 50-day and 200-day EMAs, sending bullish price signals.

A DAX return to 19,350 could signal a move toward 19,500. Furthermore, a breakout from 19,500 would bring the DAX’s all-time high of 19,675 into play.

Key drivers include updates on the Ukraine war, private sector PMIs, and central bank commentary.

Conversely, a DAX break below the 50-day EMA could signal a drop below 19,000. A fall through 19,000 may enable the bears to target 18,750.

With the 14-day RSI at 48.68, the DAX could drop to 18,750 before entering oversold territory.