The DAX is expected to put some distance between itself and the 26,000-point mark at the start of today’s session, having successfully defended this key level yesterday. The German equity market therefore remains remarkably resilient in the face of mounting uncertainty and a series of potentially market-moving events ahead.
Alongside the familiar risk factors of the US-Canada trade dispute and the war in Iran, renewed tensions are emerging between the world’s two largest economies. The United States is now planning to impose additional tariffs on a number of Chinese products.
Meanwhile, investors continue to await Nvidia’s quarterly results, with caution ahead of the highly anticipated earnings release weighing on semiconductor stocks. Expectations are elevated, prompting some investors to reduce their exposure to the sector before the numbers are published. At the same time, rising bond yields are becoming an increasing challenge for highly valued equity markets, with yields in some cases now significantly exceeding the dividend yields offered by many S&P 500 companies.
Germany’s latest growth figures, meanwhile, are keeping hopes of an economic recovery alive. The Federal Statistical Office revised second-quarter GDP growth higher from 0.2% to 0.3%, extending the recent positive trend. Attention will now turn to today’s Ifo Business Climate Index, which could provide further evidence of an improving economic outlook, followed by US consumer confidence later in the day.
The DAX continues to show signs of decoupling from developments on Wall Street. From a technical perspective, the index is expected to trade within a range of 26,050 to 26,300 points during today’s session.
