DAX Index Today: Services PMI, Corporate Earnings to Drive Investor Focus

The Overview of the DAX Performance

The DAX advanced by 0.59% on Friday (May 3). Reversing a 0.20% loss from Thursday (May 2), the DAX ended the session at 18,002.

Eurozone Unemployment and Corporate Earnings

On Friday (May 3), unemployment figures for the Eurozone fueled investor expectations of a June ECB rate cut. The unemployment rate remained unchanged at 6.5% in March.

French banks Societe Generale and Credit Agricole beat earnings forecasts, driving buyer demand for DAX-listed bank stocks.

US Jobs Report and ISM Services PMI Raise Fed Rate Cut Bets

US economic indicators fueled investor expectations of a September Fed rate cut. The US Jobs Report and the ISM Services PMI fell short of economist forecasts. US average hourly earnings increased 3.9% year-on-year in April after rising 4.1% in March. Nonfarm payrolls increased by 175k following a 315k jump in March.

Furthermore, the ISM Services PMI fell from 51.4 to 49.4 in April.

The US economic indicators drove buyer demand for riskier assets. On Friday (May 3), the Nasdaq Composite Index ended the session up 1.99%. The Dow and the S&P 500 saw gains of 1.18% and 1.26%, respectively.

The Friday Market Movers

Henkel, the German consumer goods firm, surged 7.22% on better-than-expected earnings and a positive outlook.

Tech stocks advanced, with Infineon Technologies and SAP rising by 0.32% and 1.29%, respectively.

Deutsche Bank advanced by 1.45%, while Commerzbank ended the session down 1.47%

Auto stocks also had a mixed Friday session. Porsche rose by 1.44%, with Volkswagen gaining 1.01%. BMW and Mercedes Benz Group ended the session up 0.54% and 0.94%, respectively. Daimler Truck Holdings bucked the trend, sliding by 3.76%. Investors reacted to warnings about the European market.

Services PMIs and Corporate Earnings Corporate Earnings in Focus

On Monday (May 6), finalized Services PMI numbers for Germany and the Eurozone warrant investor attention. According to preliminary numbers, the German HCOB Services PMI increased from 50.1 to 53.3 in April. Moreover, the HCOB Eurozone Services PMI rose from 51.5 to 52.9 in April.

Upward revisions to the Services PMI could drive buyer demand for DAX-listed stocks. However, investors should also consider the sub-components, including prices. Higher wages and upward trends in input and output prices could affect ECB policy moves after June.

Beyond the economic calendar, corporate earnings also need consideration. BioNTech is among the big names to release earnings results.

Fed Speakers and US Corporate Earnings

Later in the Monday session, FOMC member reactions to the US Jobs Report and ISM Services PMI will draw investor attention. FOMC members Thomas Barkin and John Williams are on the calendar to speak. Views on the timing of a Fed interest rate cut could also move the dial.

Furthermore, corporate earnings will also influence market risk sentiment. Loews Corp (L) and The Goodyear Tire & Rubber Co. (GT) are among the names to release earnings results.

Near-Term Outlook

Near-term trends for the DAX will hinge on the Services PMIs, corporate earnings, and central bank chatter. Upbeat earnings results, dovish central bank chatter, and upward revisions to the Services PMI could drive buyer demand for DAX-listed stocks.

On the Futures markets, the DAX and the Nasdaq mini were up 56 and 10 points, respectively.

DAX Technical Indicators

Daily Chart

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

A DAX break above the 18,200 handle would support a move toward the 18,350 handle. A DAX return to the 18,350 handle would bring the April 2 all-time high of 18,567 into view.

Services PMI numbers, corporate earnings, and central bank chatter need consideration.

However, a DAX fall through the 50-day EMA could signal a drop to the 17,615 support level.

The 14-day RSI at 50.72 indicates a DAX move to the 18,567 all-time high before entering overbought territory.

4-Hourly Chart

The DAX hovered below the 50-day EMA while remaining above the 200-day EMA, confirming the bearish near-term but bullish longer-term price trends.

A DAX break above the 50-day EMA would support a move to the 18,200 handle.

Conversely, a DAX drop below the 17,800 handle could give the bears a run at the 200-day EMA and the 17,615 support level.

The 14-period 4-hour RSI at 49.68 indicates a DAX fall through the 17,615 support level before entering oversold territory.