The Sine Curve of the DAX and the Dance Around the 18,000 Points

Investors are looking for new guidance as the DAX has chosen the 18,000 point mark as its dance floor. The fluctuations in the myth of the stock market month May could lead to a trend reversal in the week of Ascension Day, should the DAX move significantly above or below the previous trading ranges. The Federal Reserve seems to be holding off on further interest rate hikes for the time being, but according to experts at Landesbank Hessen-Thüringen, inflation development remains a factor of uncertainty. Investors took encouragement from a moderate US labor market report, which has brought forward expectations of an easing of interest rates to September. A jump above the 18,000-point threshold could drive the DAX towards its record high of 18,567 points. However, given the current stock market development, such a significant increase seems rather unlikely. Chart technicians at HSBC point to an imminent decisive moment, with "Make or Break" as the current investment motto. The room for decline seems to be outlined with a boundary at 17,800 points. Breakthroughs above the recent highs could provide a revival. In contrast, Claudia Windt of Helaba does not foresee an exciting week ahead, in the absence of important inflation news. However, the upcoming reports on order intake and production, which could be an indicator of a turnaround in the German industrial economy, are receiving attention. Monetary policy-wise, the Bank of England is coming into focus, from which no interest rate cut is expected. The team at ING Bank around James Smith also sees no adjustment of forecasts that would support a rate cut in June. Smith reinforces his assumption of a first rate cut for August. The earnings season continues to provide momentum. According to DekaBank Chief Economist Ulrich Kater, it has so far been surprisingly positive, with significant earnings surprises in the US and Europe. The highlight of the coming days will be the forthcoming business reports from DAX companies. In particular, Tuesday, with insights from Siemens Healthineers, DHL Group, Heidelberg Materials, Zalando, and Infineon, as well as Wednesday, with data from Fresenius, Siemens Energy, BMW, and Munich Re, promise excitement. While many local investors might take a break during Ascension Day, although the stock market operation in Frankfurt is not interrupted, this may reduce activity in the markets.