Dax Index News: Key GDP Data and Earnings Loom as DAX Faces Mixed Market Sentiment

DAX Ends Three-Day Winning Streak

On Tuesday, October 29, the DAX declined by 0.27%, partially reversing a 0.35% gain from the previous session to close at 19,478. Earnings results and economic data influenced the session.

Major Stock Movers: Auto Stocks Leave the DAX in the Red

Auto stocks extended their losses further on Tuesday as investor concerns grew about strikes affecting German car manufacturers. Volkswagen and Porsche both tumbled by 3.20%, while BMW declined by 1.62%. Mercedes-Benz Group ended the session down by 0.84%.

However, Adidas led the gains, rallying 3.8% on upbeat sales data from China.

German Consumer Climate Survey Sends Mixed Signals

On Tuesday, October 29, Germany’s Gfk Consumer Climate survey signaled a pickup in consumer confidence. Rising income expectations and willingness to buy supported an increase from -21.0 for October to -18.3 for November.

However, sentiment toward the economic outlook deteriorated, aligning with the German government’s forecast of a 0.2% contraction for 2024.

German and Eurozone GDP in Focus

On Wednesday, October 30, German and Eurozone GDP numbers will draw interest. Economists expect the German economy to contract by 0.1% in Q3 2024 after contracting by 0.1% in Q2 2024. Meanwhile, economists predict the Eurozone economy will expand by 0.2%, mirroring growth of 0.2% in Q2.

Weaker-than-expected GDP numbers could raise investor bets on a 50-basis point December ECB rate cut. However, slower growth across the Eurozone could fuel fears of weaker demand, potentially dragging the DAX toward 19,350.

Other economic indicators include German unemployment and inflation data. A higher unemployment rate could overshadow a pickup in inflationary pressures, supporting a 50-basis point December ECB rate cut. Economists expect Germany’s inflation rate to remain below the ECB’s 2% target.

US Labor Market and Consumer Confidence on Diverging Paths

On Tuesday, US labor market data raised bets on a 25-basis point (bps) December Fed rate cut. JOLTS job openings fell from 7.861 million in August to 7.443 million in September. The marked decline in job openings may signal a pullback in consumer spending, potentially dampening inflation.

The weak labor market data overshadowed a pickup in the CB Consumer Confidence Index, which rose from 99.2 in September to 108.7 in October.

According to the CME FedWatch Tool, the probability of a 25-bps December Fed rate cut increased from 69.9% on October 28 to 78.3% on October 29.

US Equity Market Overview

On Tuesday, October 29, US equity markets had a mixed session. The Dow declined by 0.36%, while the Nasdaq Composite Index and the S&P 500 advanced by 0.78% and 0.16%, respectively.

Cadence Design Systems (CDNS) led the gains on the Nasdaq after raising its 2024 profit outlook. Alphabet Inc. (GOOGL) rallied 5.88% in after-hours trading after beating earnings estimates.

US ADP Employment and GDP in Focus

In Wednesday’s US session, ADP employment change and GDP numbers will require consideration. Economists expect the ADP to report a 115k increase in employment in October, down from 143k in September. Furthermore, economists forecast the US economy to grow by 3.0% in Q3 2024, mirroring growth in Q2 2024.

Stronger-than-expected numbers could temper bets on a December Fed rate cut, potentially pulling the DAX toward 19,350. Conversely, weaker employment change and a softer GDP number could fuel speculation about a 25-basis point December Fed rate cut. A more dovish Fed rate path and expectations of a soft US economic landing could drive the DAX toward its all-time high of 19,675.

Corporate Earnings Crucial for DAX Price Trends

While the economic indicators will influence DAX trends, corporate earnings will likely impact the DAX more. Airbus Group, BASF, Caterpillar, Microsoft Corp., Meta Platforms Inc., and Volkswagen are among the big names that will announce earnings results.

Near-Term Outlook

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

Futures signal a positive start to the Wednesday session. DAX mini futures were up by 3 points, and Nasdaq mini futures by 71 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 Tuesday’s loss, the DAX sits comfortably above the 50-day and 200-day EMAs, confirming bullish price trends.

A return to $19,500 could support a move toward the all-time high of 19,675. A break above 19,675 could allow the bull to target 19,750.

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

Conversely, a DAX drop below 19,350 could bring the 50-day EMA and 19,000 into play. Buying pressure may intensify at 19,000 as the 50-day EMA is confluent with it.

The 14-day RSI at 58.39 indicates a DAX return to the all-time high of 19,675 before entering overbought territory.