DAX Extends Winning Streak to Three Sessions

On Monday, October 28, the DAX advanced by 0.35%, following a 0.11% gain from the previous session, closing at 19,532.

Major Stock Movers: Auto Stocks Extend Losses Amid Demand Concerns

Auto stocks extended their losses from Friday as demand concerns continued to impact investor sentiment. Porsche slid by 1.63%, while BMW and Mercedes-Benz Group saw losses of 0.63% and 0.62%, respectively. Volkswagen ended the session down 0.46%.

However, tech stocks advanced ahead of crucial earnings results, with Infineon Technologies and SAP advancing by 0.91% and 0.75%, respectively.

German Consumer Confidence in Focus

On Tuesday, October 29, Germany’s GfK Consumer Confidence figures will draw interest. Economists expect the GfK Consumer Confidence Index to increase slightly from -21.2 for October to -20.5 for November. Consumer confidence trends can give investors insights into labor market conditions, spending plans, and potential inflation trends.

Weaker-than-expected numbers may signal a softer labor market, dampening consumer spending and demand-driven inflation. A softer inflation outlook may boost expectations of a December ECB rate cut, supporting a DAX move toward 19,650.

On the other hand, a sharp increase in confidence could signal a pickup in consumer spending, fueling demand-driven inflation. A higher inflation outlook may dampen bets on a December ECB rate cut, pulling the DAX below 19,350.

US Manufacturing Data Supports Soft Landing Expectations

On Monday, the Dallas Fed Manufacturing Index increased from -9.0 in September to -3.0 in October. Sub-components of the Index bolstered expectations of a soft US economic landing, with production surging from -3.2 to +14.6 in October.

However, the positive signals from the US manufacturing sector dampened expectations for a December 25-basis point Fed rate cut. Falling bets on a December Fed rate cut capped the Dax’s gains.

US Equity Market Overview

On Monday, October 28, US equity markets enjoyed a positive start to the week. The Dow advanced by 0.65%, while the Nasdaq Composite Index and the S&P 500 saw gains of 0.65% and 0.27%, respectively.

Positive data and sentiment toward the US economy contributed to the gains. However, the US Presidential Election polls also drive demand for riskier assets. Markets expect a Trump victory to be bullish for stocks. Trump has narrowed the gap with Kamala Harris in recent weeks, raising the chances of a return to the White House.

Upcoming JOLTs Job Openings and Consumer Confidence Data

In Tuesday’s US session, JOLTs job openings and consumer confidence figures require consideration. A larger-than-expected fall in job openings and weaker consumer confidence could fuel bets on a December Fed rate cut, potentially pushing the DAX toward 19,650. Conversely, stronger-than-expected data may reduce bets on a December Fed rate cut, possibly pulling the DAX below 19,350.

Corporate Earnings Crucial for DAX Price Trends

Beyond the economic calendar, corporate earnings may overshadow the data. Adidas, Alphabet Inc., HSBC, McDonald’s, and Visa Inc. are among the big names announcing earnings results.

Near-Term Outlook

In the near term, trends will remain hinged on corporate earnings, central bank commentary, and key economic indicators. Economic data, including Euro area/US inflation, GDP numbers, and the US Jobs Report, will likely influence ECB and Fed rate paths.

Reducing expectations for a December ECB and Fed rate cut could offset upbeat earnings, potentially sending the DAX below 19,350. Conversely, rising bets on December rate cuts and a soft US economic landing could drive the DAX to new highs.

Futures indicate a negative start to the Tuesday session. DAX mini futures were down by 5 points, and Nasdaq mini futures by 11 points, respectively.

Investors should stay alert, with corporate earnings, economic data, and central bank commentary in focus. Stay informed with our latest news and analysis to manage your risks effectively.

DAX Technical Indicators

Daily Chart

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

A breakout from Monday’s high of 19,571 could allow the bulls to target the 19,650 level. Furthermore, a return to 19,650 may support a break above the all-time high of 19,675.

Investors should factor in today’s data, corporate earnings, and central bank speeches, which may influence near-term market sentiment.

Conversely, a fall through 19,350 could signal a drop toward the 50-day EMA and 19,000 into play. Buying pressure could increase at 19,000 as the 50-day EMA is confluent with it.

The 14-day RSI at 60.85 suggests a DAX break above the all-time high of 19,675 before entering overbought territory.

DAX Daily Chart sends bullish price signals.
DAX 291024 Daily Chart