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DAX Index News: Will Eurozone Trade Data and US Sentiment Lift DAX 30 Higher?
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Key Points:
- DAX surged 1.66% on Thursday, August 15, closing at 18,183; tech, bank, and auto stocks lead the rally.
- Eurozone trade surplus expected to narrow; key focus on import/export trends and their impact on DAX performance.
- Michigan Consumer Sentiment Index release may influence DAX, with markets eyeing potential Fed rate cuts.
In this article:
Market Overview
On Thursday, August 15, the DAX rallied 1.66%, following a 0.41% gain on Wednesday, closing at 18,183. Significantly, the DAX extended its winning streak to eight sessions.
Thursday: DAX Market Movers
Positive US economic indicators fueled buyer demand for auto, bank, and tech stocks.
- Infineon Technologies and SAP saw gains of 4.25% and 2.03%, respectively.
- Commerzbank and Deutsche Bank rallied 3.09% and 3.21%, respectively.
- Mercedes-Benz Group advanced by 2.27%, while Volkswagen gained 2.22%.
Eurozone Trade Terms in Focus
On Friday, August 16, trade data for the Eurozone will draw investor interest. Economists predict the trade surplus will narrow from €13.9 billion in May to €13.3 billion in June.
A larger-than-expected narrowing in the trade surplus could impact buyer demand for DAX-listed stocks. However, investors should also consider import and export trends. A larger fall in imports than exports could signal a weakening demand environment.
US Economic Data and Market Sentiment
US economic indicators eased investor fears of a hard US economic landing on Thursday. The positive sentiment toward the US economy and expectations of multiple 2024 Fed rate cuts drove demand for DAX-listed stocks.
US Retail Sales Impress
US retail sales surged by 1.0% month-on-month in July, recovering from a 0.2% loss in June. The better-than-expected numbers calmed fears of a hard US economic landing. Private consumption contributes over 60% to GDP.
US Labor Market Shows Resilience
Additionally, US initial jobless claims unexpectedly dropped from 234k in the week ending August 3 to 227k in the week ending August 10. The decline in claims reflected a resilient US labor market, possibly signaling higher wages, disposable income, and consumer spending.
US Market Trends
On Thursday, the US equity markets extended their gains from Wednesday. The Dow and S&P 500 advanced by 1.39% and 1.61%, respectively, while the Nasdaq Composite Index rallied 2.34%.
US Economic Calendar
On Friday, August 16, the Michigan Consumer Sentiment survey will draw investor interest. Economists forecast the Index to increase from 66.4 in July to 66.9 in August.
Better-than-expected figures could support another positive session for the DAX. Upward trends in consumer confidence could signal higher spending, possibly indicating a robust US economy.
The DAX could extend its gain from Thursday if the markets price in a US economic soft landing and multiple Fed rate cuts.
Expert Views on the US economy and the Fed
Arch Capital Global Chief Economist Parker Ross remarked on the jobless claims data from Thursday, saying,
“Overall, we are still seeing a very gradual deterioration underway in the jobless claims data. Continuing claims and insured unemployment rates reflect more labor market stress than initial claims, which is consistent with other indicators suggesting layoffs remain low but workers are struggling to find a new job once unemployed.”
Near-Term Outlook
Near-term DAX trends will hinge on US consumer sentiment numbers and central bank commentary. A higher-than-expected Michigan Consumer Sentiment Index and FOMC member support for a September Fed rate cut could boost demand for DAX-listed stocks. Conversely, an unexpected fall in consumer sentiment could test investor hopes that the Fed could avoid a hard landing.
In the futures markets, the DAX and the Nasdaq Mini were up by 16 and 35 points, respectively.
Investors should stay alert with the US consumer confidence in focus. Monitor the news wires, the economic calendar, and expert commentary to manage trading strategies. Stay up-to-date with our latest news and analysis to manage risk.
DAX Technical Indicators
Daily Chart
The DAX sat above the 50-day and 200-day EMAs, sending bullish price signals.
A breakout from 18,250 could signal a move toward 18,500. Furthermore, a return to 18,500 could bring 18,750 into play.
US consumer sentiment and central bank chatter require consideration on Friday.
Conversely, a DAX break below the 50-day EMA could bring sub-18,000 into view. A fall through 18,000 could signal a drop toward the 17,800.
The 14-day RSI at 53.68 indicates a return to the 18,500 support level before entering oversold 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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