Dax Index News: Today’s Market Analysis as Investors Eye US Jobs Report

Market Overview

On Thursday, October 3, the DAX fell by 0.78%, following a 0.25% loss from the previous session, closing at 19,015. Significantly, the DAX extended its losing streak to four consecutive sessions.

Concerns about an Israeli attack on Iranian oil facilities impacted market risk sentiment.

Auto Stocks Extend Losing Streak

Auto stocks extended their losing streak to four sessions. Fading bets on aggressive Fed rate cuts, concerns about the Middle East conflict, and the recent revision to forecast impacted demand. News that Stellantis is considering cuts to its dividend and share buybacks also fueled the pullback.

Porsche slid by 3.57%, while Volkswagen and BMW saw declines of 1.57% and 1.55%, respectively.

SAP declined by 1.45% on news of US prosecutors widening their investigation into alleged price fixing.

Euro Area Services PMIs Disappoint

On Thursday, the Eurozone’s Services PMI drew interest, falling from 52.9 in August to a 7-month low of 51.4 in September. Significantly, new orders fell for the first time since February, casting a gloomy outlook of the Eurozone economy. Spain topped the Eurozone’s Composite PMI table while Germany sat at the bottom.

Expert Views on the Eurozone Economy

Frederik Ducrozet, Head of Macroeconomic Research at Pictet Wealth Management, commented on the September PMIs, stating,

“Largest gap ever between Spanish and German composite PMIs.”

Middle East Conflict and Riskier Assets

On Friday, October 4, investors should monitor updates from the Middle East. Increasing expectations of an Israeli attack on Iran’s oil facilities could send the DAX below 19,000.

US Services PMI and Jobless Claims Impact Fed Rate Cut Bets

On Thursday, US jobless claims and services sector data eased bets on a 50-basis point Fed rate cut. Initial Jobless Claims increased from 219k (week ending September 21) to 225k (week ending September 28). The modest increase highlighted a resilient US labor market ahead of Friday’s US Jobs Report.

Furthermore, the ISM Services PMI increased from 51.5 in August to 54.9 in September, supporting expectations of a soft US economic landing. Notably, the services sector accounts for nearly 80% of US GDP.

US Market Trends

On Thursday, October 3, the US equity markets faced losses as investors monitored updates on the Middle East conflict. The Dow dropped by 0.44%, while the Nasdaq Composite Index and the S&P 500 saw declines of 0.04% and 0.17%, respectively.

US Economic Calendar: The US Jobs Report

On Friday, the crucial US Jobs Report could impact market risk sentiment. Economists expect nonfarm payrolls to increase by 142k in September after rising by 140k in August. Additionally, economists forecast the US unemployment rate to hold steady at 4.2%.

Positive US labor market data may further reduce expectations of aggressive Fed rate cuts, possibly easing demand for DAX-listed stocks.

Conversely, softer labor market data, including a higher unemployment rate, could raise expectations of a 50-basis point Fed rate cut. A more dovish Fed rate path could push the DAX toward 19,250. However, a significant deterioration in labor market conditions may retrigger fears of a hard US landing, possibly sending the DAX toward 18,750.

Near-Term Outlook

Near-term DAX trends will likely hinge on news from the Middle East, the US Jobs Report, and central bank commentary. A weaker US labor market could boost expectations of a 50-basis point Fed rate. However, dire jobs data could reignite fears of a hard US landing.

The futures markets signal a positive start to the Friday session, with the DAX and the Nasdaq mini up by 21 and 25 points, respectively.

Investors should stay alert to updates on the Middle East conflict, central bank chatter, and economic indicators. Stay informed with our latest news and analysis to manage your risks effectively.

DAX Technical Indicators

Daily Chart

Despite the four-day losing streak, the DAX remains above the 50-day and 200-day EMAs, confirming bullish price trends.

A return to 19,150 could signal a move toward 19,250. Furthermore, a breakout from 19,250 could give the bulls a run at September 27’s all-time high of 19,492.

Investors should focus on the Middle East, US labor market data, and central bank commentary, which may influence near-term market sentiment.

Conversely, a fall through 19,000 could signal a drop to 18,750. A break below 18,750 would bring the 50-day EMA into play.

The 14-day RSI at 54.73 indicates a climb to 19,500 before entering overbought territory.