DAX News Today: China Stimulus Measures Expected to Drive Support

Market Overview

On Tuesday, September 24, the DAX rallied 0.80%, following a 0.68% gain from the previous session to close at 18,997.

Auto Stocks Drive DAX Rally Amid Chinese Stimulus

Auto stocks were among the front-runners as investors reacted to stimulus measures from China, which may boost demand. BMW rallied 3.55%, while Daimler Truck Holding and Volkswagen advanced by 1.76% and 1.62%, respectively.

Online retailer Zalando SE and Adidas saw gains of 2.24% and 0.92%, respectively.

China Policy Measures and Risk Sentiment

On Tuesday, September 24, the People’s Bank of China announced a series of policy measures to bolster the Chinese economy. Hopes of a pickup in demand fueled market risk sentiment, spilling over to the European session.

German Ifo Business Climate Deteriorates

On Tuesday, Germany’s Ifo Business Climate Index dropped from 86.6 in August to 85.4 in September. Notably, the Index fell for the fourth consecutive month. Firms were less satisfied with current conditions while growing more pessimistic about the economic outlook.

A deterioration in business sentiment could affect business investment, employment, and the German economy, possibly supporting a more dovish ECB rate path. A more dovish ECB rate path would lower borrowing costs, potentially boosting company earnings and stock prices.

In addition, ECB policymaker Klaas Knot supported gradual rate cuts in the first half of 2025, driving demand for DAX-listed stocks.

Expert Views on the ECB Rate Path

Pictet Wealth Management Head of Macroeconomic Research Frederik Ducrozet shared his views on the ECB rate path, stating,

“Markets now pricing in 15bp for the 17 October meeting. With only three weeks to go the ECB may not have enough data points to tip the balance. September HICP (due 1 October) is likely to see headline inflation drop below 2% but services inflation still close to 4%.”

US Consumer Confidence Falls

On Tuesday, the CB Consumer Confidence Index fell from 105.6 in August to 98.7 in September. Notably, the Present Situation Index and Expectations Index also declined, raising concerns about the labor market and the economic outlook.

A weaker consumer sentiment trend could impact spending and the US economy, possibly supporting a more dovish Fed rate path. Expectations of multiple 2024 Fed rate cuts and a soft US economic landing could drive demand for DAX-listed stocks.

US Market Trends

On Tuesday, September 24, the US equity markets advanced their gains from Monday, with the Nasdaq Composite Index gaining 0.56%. The Dow and S&P 500 ended the session up 0.20% and 0.25%, respectively.

US Economic Calendar: New Home Sales

On Wednesday, September 25, new home sales will draw investor interest. Economists expect new home sales to fall by 5.1% in August, following a 10.6% surge in July.

A larger-than-expected fall in new home sales could signal weakening demand. Economists view the US housing market as a barometer for the US economy. Deteriorating market conditions may affect consumer confidence, spending, and the US economy.

Near-Term Outlook

Near-term DAX trends will likely depend on ECB commentary and the upcoming US Personal Income and Outlays Report. Indications of a soft US economic landing and support for multiple Q4 2024 Fed rate cuts could push the DAX toward the all-time high of 19,045. Conversely, suggestions of a hard US landing could send the DAX down toward 18,500.

However, caution remains as futures markets signal a testy mid-week session, with DAX and the Nasdaq mini down by 79 and 34 points, respectively. Additional stimulus measures from the PBoC on Wednesday could offer early support.

Investors should stay alert to central bank chatter and economic indicators. Stay informed with our latest news and analysis to manage your risks effectively.

DAX Technical Indicators

Daily Chart

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

A return to 19,000 could give the bulls a run at the September 19 all-time high of 19,045. Furthermore, a breakout from 19,045 may support a move toward 19,200.

Investors should focus on central bank commentary and US housing sector data, which may influence near-term market sentiment.

Conversely, a break below 18,750 could give the bears a run at the 50-day EMA.

The 14-day RSI at 61.05 suggests a break above 19,045 before entering overbought territory.