Kickstart to the week with a subdued DAX, following an impressive previous week
While investors started the week on a relatively laid-back note, the DAX didn't exactly follow suit. Instead, the index hinted at maintaining its previous day's level, demonstrating a slight 0.02% rise to 15,192 points. The MDax, meanwhile, remained static at 25,137 points, and the EuroStoxx 50 showed a moderate increase.
The optimism stirred by the US Federal Reserve's maintained interest rate and the US labor market data's surprising weakness last week continued to influence market sentiments. Market expert Thomas Altmann from asset manager QC Partners surmises: "Given the enduring geopolitical risks and the recent encouraging news from central banks and the US labor market, investors are now forced to strike a balance."
In spite of these challenges, the DAX and MDAX continued holding their ground on prominent stock exchanges, with the DAX incrementally climbing 0.02%, reaching 15,192 points, and the MDAX staying put at 25,137 points.
Fueled by the DAX's powerful performance in the previous week, which saw a gain of almost three and a half percent, the index showed resilience in the face of potential hindrances, presenting a picture of confidence and optimism.
Enrichment Data Integrated Inline:
The current bullish momentum of the DAX can be attributed to factors such as:
- A robust technical analysis: The DAX has managed to breach the 22,000.00 resistance level, indicating an ongoing upward channel from August, and a subsequent expected rise up to the 22,500.00 resistance level, powered by the active impulse wave 3.
- Lowering inflation rates: Inflation in Germany has started to decline at the beginning of the year. The forthcoming data from the Federal Statistical Office is anticipated to clarify the overall trend in this area.
- Improved corporate balance sheets: The impressive run of the DAX can also be attributed to the strong corporate balance sheets of companies like Siemens and Thyssenkrupp, coupled with positive earnings reports.
- Global market dynamics: The DAX has been swayed by broader global market dynamics, including the performance of other European indices. The MSCI-EAFE Index saw an increase of 5.21%, with Germany adding 9.16%, France gaining 7.72%, and Spain and Italy posting solid gains.
- US Federal Reserve's interest rate decision: The concerns surrounding the potential for the Federal Reserve to retain higher interest rates for an extended period could have both positive and negative consequences on the DAX, depending on how it affects European markets and the current domestic economic factors and corporate performance.
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Sources: [1] Source: FX Empire, [2] Source: Trading Platforms, [3] Source: Seeking Alpha, [4] Source: Invezz, [5] Source: Stock Apps,
