DAX Index News: Inflation Data and Retail Sales in Focus—Can DAX Sustain Key Levels?

DAX Ends Three-Day Winning Streak

On Wednesday, October 30, the DAX slid by 1.13%, following a 0.27% loss from the previous session to close at 19,257.

Euro area economic indicators and disappointing corporate earnings dragged the Index into negative territory.

Major Stock Movers: Tech Stocks Stumble

Infineon Technologies and SAP were among the worst performers, falling 3.48% and 1.99%, respectively. Belgium’s Melexis disappointed investors with a gloomy forecast, impacting tech stocks across the region.

Auto stocks continued their downward spiral, with Volkswagen as the exception. Daimler Truck Holding and BMW saw losses of 2.61% and 1.16%, respectively. Factory worker strikes and demand concerns remained as headwinds. Volkswagen advanced by 1.08% on cost cutting-plans.

Euro Area Economy Surprises Markets

On Wednesday, October 30, GDP numbers for Germany and the Eurozone drew investor interest. The German economy unexpectedly expanded by 0.2% in Q3 2024, avoiding a technical recession. Government and private consumption expenditures contributed to a rebound in the third quarter.

The Eurozone economy also fared better than expected, expanding by 0.4% in Q3 2024 after growth of 0.2% in Q2 2024.

German Inflation Accelerates to ECB’s 2% Target

The better-than-expected GDP numbers came before German inflation figures that may also reduce investor bets on a 50-basis point December ECB rate cut.

Germany’s annual inflation rate accelerated from 1.6% in September to 2.0% in October.

Falling bets on a 50-basis point December ECB rate cut impacted demand for DAX-listed stocks.

German Retail Sales and Eurozone Inflation in Focus

On Thursday, October 31, retail sales figures for Germany will draw investor interest after Wednesday’s data. Economists expect retail sales to decline by 0.5% in September after rising 1.6% in August.

A larger-than-expected fall in retail sales could suggest a downward revision to Q3 2024 GDP numbers. Moreover, weak retail sales could dampen demand-driven inflationary pressures, potentially raising bets on a 50-basis point December ECB rate cut.

Later in the morning session, Eurozone inflation figures also require consideration. Economists forecast the annual inflation rate to rise from 1.7% in September to 1.9% in October. Hotter-than-expected inflation figures could further dampen investor bets on an aggressive December ECB rate cut.

A less dovish ECB rate could affect demand for DAX-listed stocks, possibly dragging the DAX toward 19,000. Conversely, softer inflation numbers and a modest fall in German retail sales could push the DAX through 19,350.

US ADP Report Signals Robust US Labor Market

On Wednesday, the ADP reported a 233k increase in employment in October, up from 159k in September. The October surge suggested a robust US labor market and supported expectations of a soft US economic landing.

A tighter labor market could drive wages higher, fueling consumer spending and demand-driven inflation. While positive for the US economy, higher inflation could delay a potential December 25-basis point Fed rate cut to 2025.

Falling bets on a 25-basis point December Fed rate cut contributed to the DAX’s loss.

Other economic indicators included US GDP figures. The US economy grew by 2.8% in Q3 2024, moderately slower than the 3% in Q2 2024.

US Equity Market Overview

On Wednesday, October 30, US equity markets saw red, with the Nasdaq Composite Index ending a four-day winning streak, falling 0.56%. The Dow and the S&P 500 declined by 0.22% and 0.33%, respectively. Upbeat US labor market data and falling bets on a Fed rate cut in December contributed to the losses.

Super Micro Computer (SMCI) tumbled by 32.68%, making headlines.

US Personal Income and Outlays Report in Focus

In Thursday’s US session, the US Personal Income and Outlays Report will further influence sentiment toward the Fed rate path. Softer inflation and personal income/spending trends could fuel speculation for November and December Fed rate cuts.

A more dovish Fed rate path and expectations of a soft US economic landing may drive the DAX above 19,350. Conversely, hotter-than-expected inflation and upward personal income/spending trends could reduce bets on a December Fed rate cut, potentially dragging the DAX toward 19,000.

Corporate Earnings Crucial for DAX Price Trends

Beyond the economic calendar, corporate earnings will continue to influence DAX trends, potentially overshadowing the economic data. Merck & co., BNP Paribas, Stellantis, STMicroelectronics, Societe Generale, Apple Inc., (AAPL), Amazon.com (AMZN), and Intel Corp., (INTC) are among the big names that will announce earnings results.

With economic data and corporate earnings in focus, the US Presidential Election is another consideration. A Trump victory could lead to punitive tariffs on EU goods, exposing the DAX to the election polls.

Near-Term Outlook

In the near term, DAX trends will hinge on corporate earnings, key economic data, and central bank commentary. Crucial data, including Euro area/US inflation, and the US Jobs Report, could influence ECB and Fed rate paths and market risk sentiment.

Futures indicate a negative start to the Thursday session. DAX mini futures were down by 88 points, and Nasdaq mini futures by 128.5 points, respectively.

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

DAX Technical Indicators

Daily Chart

Despite two consecutive days in negative territory, the DAX remains above the 50-day and 200-day EMAs, sending bullish price signals. However, a significant drop below these levels could shift sentiment to a bearish outlook.

A breakout from 19,350 could signal a return to $19,500. Furthermore, a break above 19,500 may allow the bulls to test the all-time high of 19,675.

Investors should consider today’s crucial economic data and corporate earnings, which will likely affect market sentiment.

Conversely, a DAX drop below the 50-day EMA and 19,000 could support a fall toward 18,750.

The 14-day RSI at 49.49 suggests a DAX fall to 18,750 before entering oversold territory.