DAX at Key Test: Wall Street Pulls Back, Gold Hits Record

Wall Street & Fed

• Stocks pull back: US markets ended lower, breaking a three-day streak of record highs.
• Powell cautious: Balanced concerns over persistent inflation and a weakening labor market.
• Mixed Fed signals: Powell gave little guidance on rate cut timing; officials split on whether to prioritize jobs or inflation.

Market Movers

• Tech retreat: Nasdaq -0.9%, led by Nvidia (-2.8%); Amazon, Microsoft, Apple also fell.
• Dow resilience: Down only 0.2%, supported by Boeing (+2%) on an $8B Uzbekistan Airways order and hopes for a China deal.
• Micron earnings: Stock rose post-market on strong results, adding to a 1.1% regular session gain.

Asia-Pacific Reaction

• Asian stocks lower: Japan’s Nikkei -0.5%, Australia -1%.
• Drivers: Powell’s remarks + weak US PMI reignited growth concerns.

Eurozone PMIs

• Headline index: Rose to 51.2, signaling modest growth.
• Manufacturing: Fell from 50.7 → 49.5 (back into contraction).
• Services: Rose from 50.5 → 51.4, driven by Germany.
• Germany: Composite 52.4 (highest since May 2024), but manufacturing slumped to 48.5 on weak orders; services surged to 52.5.
• France: PMI stayed below 50 for 13th straight month amid political turmoil.
• Outlook: Overall moderate growth expected in coming months.

Stockholm Stock Exchange heating

• IPO hotspot: 3 of Europe’s 5 largest IPOs this year.
• Drivers: Strong retail investor base, robust local institutions, political stability.
• Performance: OMX30 +16% YTD (in EUR, incl. dividends), above 5-year avg. of 13%.
• Supportive factors:
  • Riksbank cut rate to 1.75% from 2.0%.
  • 2026 budget includes €7.3B fiscal stimulus.
  • Growth forecasts for 2026–27 raised to 2.7% and 2.5%.
  • Exporters may benefit from Eurozone recovery + German defense/infrastructure spending.

US Coffee Prices

• Record highs: Avg. $8.872/lb in August (St. Louis Fed).
• Causes:
  • Brazil supply hit by hot, dry weather.
  • US tariffs: 50% on Brazil, 39% on Switzerland.
• Impact: EU, Vietnam, Colombia coffee more competitive.
• Uncertainty: US may exempt coffee from tariffs.

US-China Trade & Boeing

• Aircraft order: Talks on a “huge” Boeing deal, possible centerpiece of trade pact.
• Scale: Boeing working on selling up to 500 planes to China (years in the making).
• Context: China buying Argentine soybeans, hurting US farmers.
• Other developments: Trump-Xi call confirmed TikTok US spinoff agreement; more meetings planned.

AI & Tech

• Huawei strategy:
  • Launched a 3-year campaign to challenge Nvidia in AI chips.
  • Focus on networking, policy support, and scale over raw performance.
• Nvidia investment:
  • Plans up to $100B investment in OpenAI.
  • Data centers to use 10 GW of power = 4–5M GPUs (double last year).

Gold

• New record: Gold prices hit fresh highs.
• China’s role:
  • Plans to act as custodian of foreign sovereign gold reserves via Shanghai Gold Exchange.
  • Could mean looser import rules and expanded gold role in financial services.
• Global impact: Strengthens China’s influence in bullion markets.

 

DAX Technical Analysis 4h

The index is consolidating within a descending triangle-like pattern, pressing against horizontal support just above 23,300, which has held multiple times since early August. This level is critical — a confirmed breakdown would likely signal more downside toward 23,000 or lower.

Indicators Overview

• Bollinger Bands: The price is oscillating tightly within a narrowing band, suggesting low volatility and a possible volatile move ahead.
• RSI (14): Currently near the neutral zone (~49), indicating no clear momentum bias. Not oversold or overbought — still room for movement in either direction.
• MACD: The histogram has turned slightly negative, and the signal lines are converging just below the baseline, suggesting weakened bullish momentum.

Outlook

As long as 23,300 holds, a bounce toward 23,800–24,000 remains possible. However, a daily close below that support could trigger a sharp breakdown toward 23,000 or even 22,800, especially if accompanied by expanding Bollinger Bands and rising bearish MACD momentum.