DAX turns positive despite another US inflation shock

US producer prices have delivered another inflation shock for investors. With prices rising by 1.3% month on month and 6.3% year on year, inflationary pressures at the corporate level are significantly stronger than feared. Following yesterday's unexpectedly high consumer inflation figures, the evidence is mounting that inflation in the US is regaining momentum.

Particularly concerning is the fact that companies appear not to have fully passed on higher energy and transport costs to their customers. This means that some of the inflationary pressure may only reach consumers in the coming months. Today's surge in producer prices could therefore be a warning of further unpleasant surprises in consumer inflation. The pressure on the Federal Reserve to tighten its already restrictive monetary policy stance is consequently increasing.

At the same time, the US economy is proving remarkably resilient. Retail sales rose by 0.8%, significantly exceeding expectations, while the Empire State Manufacturing Index impressed at 25.5 points. Initial jobless claims, at 198,500, were also in line with expectations. Only the Philadelphia Fed Index disappointed, coming in at 20.9 points.

The US economy has so far withstood the headwinds, but this very resilience also gives the Federal Reserve greater scope to take more decisive action against inflation.

In the DAX, technology-related stocks such as Infineon and Siemens Energy came under selling pressure today. At the same time, however, investors took advantage of weaker share prices to make selective purchases in defensive sectors.

Investors are still willing to maintain their equity exposure, but their appetite for risk is clearly diminishing. The autumn trading season is only just beginning to live up to its reputation for turbulence.