DAX Index Today: Earnings, Euro Area Data, and the US Economy in Focus

The Overview of the DAX Performance

The DAX declined by 0.24% on Monday (April 29). Partially reversing a 1.36% rally from Friday (April 26), the DAX ended the session at 18,118.

German Inflation and Eurozone Economic Sentiment

Consumer prices increased by 2.2% year-on-year in April after rising by 2.2% year-on-year in March. Economists expected an annual inflation rate of 2.3%.

Economic Sentiment across the Eurozone declined from 96.2 to 95.6. Economists forecast an increase to 96.9. Sub-components of the Business and Consumer Survey supported investor bets on a June ECB rate cut despite a pickup in consumer confidence.

Dallas Fed Manufacturing Index in Pre-Fed Focus

On Monday (April 29), Dallas Fed Manufacturing Index fell from -14.4 to -14.5 in April. Economists expected an increase to -11.0.

However, the stats had a limited impact on the US equity markets. Early gains across the US equity markets limited the losses for the DAX.

On Monday, the Dow rose by 0.38%. The Nasdaq Composite Index and the S&P 500 saw gains of 0.35% and 0.32%, respectively.

The Monday Market Movers

Deutsche Bank tumbled 8.46%, dragging the DAX into negative territory. Investors reacted to the news from Friday of the €1.30 billion provision in response to updates from the Postbank case. Commerzbank declined by 2.59%.

Tech stocks also struggled as investors prepared for the Fed interest rate decision and FOMC press conference. Infineon Technologies and SAP saw losses of 0.70% and 1.48%, respectively.

However, auto stocks had a mixed Monday session. Mercedes Benz Group and Volkswagen advanced by 0.58% and 0.54%, respectively. BMW rose by 0.38%, while Porsche fell by 0.18%.

German and Eurozone Economies in the Spotlight

On Tuesday (April 30), German retail sales, unemployment and Q1 2024 GDP numbers warrant investor attention. Better-than-expected economic indicators could temper investor bets on multiple post-June ECB interest rate cuts.

Economists forecast retail sales to increase by 1.5% in March after sliding by 1.9% in February. Moreover, economists expect the unemployment rate to remain steady at 5.9% in April.

However, GDP numbers for Q1 2024 could impact DAX-listed stocks more. Economists predict the German economy to expand by 0.1% quarter-on-quarter after contracting by 0.3% in Q4 2023.

Later in the European session, GDP and inflation numbers for the Eurozone also need consideration.

Economists forecast the Eurozone economy to expand by 0.1% quarter-on-quarter in Q1 2024. In Q4 2023, the economy stalled. However, economists expect the annual core inflation rate to ease from 2.9% to 2.6%. Softer-than-expected numbers could influence the ECB rate path and drive buyer demand for DAX-listed stocks.

While the economic indicators will influence the ECB rate path, corporate earnings could impact the DAX more. Volkswagen, Vonovia, MTU Aero, Mercedes Benz Group, Lufthansa, and Adidas are among the big names to release earnings results.

Employment Costs, Consumer Confidence, and US Corporate Earnings

Later in the session, US employment cost – wages and CB Consumer Confidence Index numbers will draw investor attention. Better-than-expected numbers could affect investor bets on a September Fed rate hike.

Economists forecast employment cost – wages to increase by 0.9% in Q1 2024 after rising by 0.9% in Q4 2023. Moreover, economists expect the CB Consumer Confidence Index to fall from 104.7 to 104.0 in April.

While the US economic indicators warrant investor attention, corporate earnings will also move the dial.

Amazon.com (AMZN), Coca-Cola (COKE), McDonald’s (MCD), PayPal (PYPL), and Starbucks (SBUX) are among the marquee names to release earnings results.

Near-Term Outlook

Near-term trends for the DAX will hinge on the German and US economic indicators and corporate earnings. However, investors must also consider Eurozone inflation figures as investors eye ECB rate cuts beyond June.

On the Futures markets, the DAX was down 17 points, while the Nasdaq mini advanced by 8 points.

DAX Technical Indicators

Daily Chart

The DAX sat above the 50-day and 200-day EMAs, sending bullish price signals.

A DAX return to the 18,200 could give the bulls a run at the 18,350 handle.

Economic indicators from Germany, the Eurozone, and the US, and corporate earnings need consideration.

However, a DAX fall through the 18,000 handle would bring the 50-day EMA into play. A break below the 50-day EMA could give the bears a run at the 17,615 support level.

The 14-day RSI at 54.35 suggests a DAX return to the April 2 all-time high of 18,567 before entering overbought territory.

4-Hourly Chart

The DAX hovered above the 50-day and 200-day EMAs, affirming the bullish price signals.

A DAX break above the 18,200 handle would bring the 18,350 handle into play.

Conversely, a DAX drop below the 50-day EMA would give the bears a run at the 17,800 handle.

The 14-period 4-hour RSI at 57.15 suggests a DAX break above the 18,350 handle before entering overbought territory.