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DAX Index Today: Corporate Earnings and US Politics in Focus
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Key Points:
- The DAX slid by 1.00% on Friday, July 19, ending the session at 18,172.
- On Monday, July 22, US politics, corporate earnings, and ECB commentary will influence market risk sentiment.
- Later in the session on Monday, US economic indicators require consideration amid Fed rate cut bets.
In this article:
DAX Extends Losing Streak to Five Sessions
On Friday, July 19, the DAX slid by 1.00%. Following a 0.45% loss on Thursday, July 18, the DAX ended the session at 18,172. Significantly, the DAX declined for the fifth session, matching its longest losing streak since December 2023.
Friday DAX Market Movers
Sartorius AG tumbled 15.24% after the pharma and lab supplier cut its annual forecast.
Auto stocks also ended the session in negative territory. Daimler Truck Holding and BMW saw losses of 2.02% and 2.01%, respectively. Volkswagen and Porsche also saw heavy losses. Demand concerns and uncertainty toward the ECB rate path affected buyer appetite for auto stocks.
German Economic Data: Producer Prices in Focus
German producer prices declined 1.6% year-on-year in June after falling 2.2% in May.
A less marked decline in producer prices suggested less pressure on producers to cut costs. However, the negative numbers continued to signal weak demand, supporting a Q3 2024 ECB rate cut.
Beyond the Economic Calendar
Uncertainty about the ECB rate path, trade tensions, and increasing chances of a Trump victory contributed to the losses.
German Corporate Earnings Calendar
On Monday, July 22, the focus will shift to the corporate earnings calendar, with SAP among the big names to release earnings results. Weaker-than-expected results could impact the broader tech sector and pressure the DAX. However, 2024 forecast revisions could influence tech stocks more.
US Market Trends
On Friday, the US equity markets extended their losses from Thursday. The Dow and the Nasdaq Composite Index declined by 0.93% and 0.81%, respectively, while the S&P 500 fell by 0.71%.
A Crowdstrike software update caused a global IT outage, impacting tech stocks and market risk sentiment. The risk-off sentiment dragged the DAX deeper into negative territory on Friday.
US Politics News
On Sunday, July 21, US President Joe Biden withdrew from the US Presidential Election race, backing Kamala Harris as the nominee.
Before the stepdown, 538 had Trump with a 3.5-point lead over President Joe Biden, while a CBS News poll gave Trump a 3-point lead against Harris.
Biden’s withdrawal could change the dynamics of the race for the White House. The DAX could face increasing selling pressure if the polls give Trump a better chance of winning against Harris. Trump’s US protectionism and foreign policy may affect risk appetite.
Euroasia Group President Ian Bremmer commented on the Biden news, stating,
“Over 100 days remain before the election. That’s an eternity – longer than the entire campaign in most democracies. Trump remains the favorite. But anything can happen. Biden’s decision to stand aside has made this a wide open race.”
US Economic Indicators
Later in the session on Monday, the Chicago Fed National Activity Index (CFNAI) requires consideration.
Economists forecast the CFNAI to increase from 0.18 in May to 0.30 in June.
The Index is a weighted average of 85 monthly US economic indicators, measuring economic activity and inflation.
Better-than-expected numbers could signal a robust US economy in Q2. However, investors should consider the sub-components, including unemployment and personal consumption.
Lower unemployment and higher personal consumption could temper bets on multiple 2024 Fed rate cuts. Unemployment and consumption are focal points for the Fed as FOMC Members increase their support for a September Fed rate cut.
Near-Term Outlook
Near-term DAX trends depend on corporate earnings, ECB commentary, and US politics. ECB support for a September rate cut could drive demand for DAX-listed stocks. However, weaker-than-expected corporate earnings results and rising bets on a Trump win could test market risk sentiment.
In the Futures markets, the DAX and the Nasdaq mini were up by 50 and 62 points, respectively.
Investors should remain alert with corporate earnings and the US elections in focus. Monitor the news wires, economic data, 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 below the 50-day EMA while holding above the 200-day EMA. The EMAs sent bearish near-term but bullish longer-term price signals.
A DAX break above the 50-day EMA would support a move to the 18,500 handle. A breakout from 18,500 could give the bulls a run at 18,750.
Corporate earnings, ECB commentary, and US politics require consideration.
Conversely, a DAX break below 18,000 could signal a drop toward the 17,615 support level.
The 14-day RSI at 43.10 indicates a DAX break below 18,000 before entering oversold territory.
4-Hourly Chart
The DAX sat below the 50-day and 200-day EMAs, sending bearish price signals.
A move above the 200-day EMA could give the bulls a run at the 50-day EMA. A breakout from the 50-day EMA would support a return to 18,500.
However, a DAX break below 18,000 could signal a drop toward the 17,750 handle.
The 14-period 4-hour RSI at 32.16 suggests a DAX drop to 18,000 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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