At Extreme Investor Network, we pride ourselves on providing valuable insights and analysis for the savvy investor. Today, we are focusing on key events and trends in the stock market that are shaping the investment landscape.
German Private Sector PMIs in Focus
The private sector PMIs from Germany are set to be released on Monday, September 23, and investors need to pay close attention. The Services PMI is particularly important as it can impact the ECB rate path and contribute significantly to inflation. Economists are forecasting a modest drop in the HCOB Services PMI from 51.2 in August to 51.0 in September. A larger-than-expected decline could lead to increased bets on a Q4 2024 ECB rate cut. It is crucial for investors to also monitor employment and price trends for additional insights into inflation.
US Market Trends
In the US, the equity markets had a mixed end to the week with the Nasdaq Composite Index and the S&P 500 experiencing losses, while the Dow advanced slightly. The upcoming private sector PMIs from the US on Monday will be closely watched by investors, with the Services PMI having a significant impact on market risk sentiment. Economists are predicting a slight decrease in the S&P Global Services PMI from 55.7 in August to 55.2 in September. Any significant decline could bolster bets on Q4 2024 Fed rate cuts. Additionally, investors should pay attention to job creation and input price trends, as well as comments from the Fed, as they can influence demand for DAX-listed stocks.
Near-Term Outlook
The near-term trends for the DAX will be influenced by the Services PMIs and central bank commentary. A modest decline in the US Services PMI could support a DAX return to 19,000, while a significant slide could lead to fears of a hard US landing and push the DAX below 18,500. Futures markets are indicating a potential rally, with DAX and Nasdaq mini futures showing gains. It is essential for investors to stay informed on central bank chatter and economic indicators to effectively manage risks in their investment portfolios.
DAX Technical Indicators
Looking at the technical indicators for the DAX, the index is currently hovering above the 50-day and 200-day EMAs, indicating bullish price trends. A move towards the September 19 all-time high of 19,045 could be on the horizon, with the possibility of reaching 19,200 if the bullish momentum continues. However, a break below 18,600 could signal a decline towards the 50-day EMA. The 14-day RSI suggests a potential return to 19,045 before entering overbought territory.
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