Dax starts June successfully, but loses momentum

The German benchmark index DAX recorded motivating gains at the beginning of the week, benefiting from positive impulses from New York and briefly approaching the 18,700-point mark. During early trading, the index also tested the 21-day moving average. However, the initial momentum did not last long: after a peak rise of about one percent, the gain shrank to just 0.59 percent, standing at 18,606.21 points by the end of the first trading hour. Other indices showed a similar pattern. The MDAX, comprising medium-sized German companies, recently rose by 0.52 percent to 26,854.61 points, thereby halving its daily gains. The EuroStoxx 50, the leading index of the Eurozone, also recorded a half percent increase. This upward trend was mainly fueled by a late rebound on Wall Street. Despite initial concerns about profitability in the burgeoning Artificial Intelligence (AI) sector, the S&P 500 closed significantly higher on Friday after initially dropping to a three-week low. The NASDAQ indices also managed to significantly reduce their losses towards the end. One trader noted that the late surge in the S&P 500 had sparked hope that other stocks could temporarily take over the role of AI companies as market drivers. This is significant amid renewed investor concerns about interest rate changes in the Eurozone and the US. Therefore, the European Central Bank’s (ECB) interest rate decision on Thursday is eagerly anticipated. Experts predict that after continuous rate hikes to combat high inflation since mid-2022, the ECB might lower rates for the first time. According to observations by Helaba, the main interest lies in the size of the potential rate-cutting cycle. Market analysts at eToro even speculate on a second cut in December and a more extensive round of cuts as early as 2025. The challenge remains finding a balance between fostering economic recovery and avoiding new inflation turbulences. On Monday, attention was initially directed towards various Purchasing Managers' Indices, including the ISM index for the US industry, which, according to Helaba, is just below the expansion threshold of 50 points. China delivered a positive surprise with an expanding Caixin Purchasing Managers' Index. In the German corporate landscape, it was largely quiet in the morning. Notable movement was seen in Borussia Dortmund shares, which fell by seven percent after the hoped-for victory in the Champions League final against Real Madrid was missed with a 0-2 result on Saturday. Influenced by analyst comments, Commerzbank shares fell by 0.6 percent as Citigroup withdrew its buy recommendation. Analyst Borja Ramirez Segura expressed concerns about earnings performance despite still-high interest rates. Positive development was seen in Hannover Re, which rose by 2.1 percent after an upgrade to "Neutral" by UBS. Analyst Will Hardcastle was optimistic that the reinsurer would weather the expected storm season well. Nemetschek gained two percent in the MDAX, thanks to good US leads. This was attributable to the convincing quarterly report of US competitor Autodesk, whose shares gained seven percent in after-hours trading on Friday.