After facing losses last Friday, the DAX is starting the week on a positive note. However, large jumps in the index are not expected.
The DAX opened the XETRA main trading session on Monday up by 0.22% at 24,725.81 points. In contrast, it closed the trading session on Friday 1.29% lower at 24,671.22 points.
Analysts Remain Cautious
Following a lackluster past week, analysts predict that the DAX may not see significant movements in the coming days. According to DZ Bank’s weekly outlook, there seems to be a lack of enthusiasm for price increases at the moment. Additionally, the seasonal summer slump, coupled with overheated U.S. markets, is expected to provide no short-term impulses.
Andreas Lipkow, Chief Market Analyst at CMC Markets, echoes this caution. He noted, “Every negative news item is currently being utilized as an opportunity for profit-taking, and this is a sign that the stock market may be poised for a consolidation phase,” reflecting on the recent weakness.
What Moves the Market This Week
The economic agenda has several potentially market-moving announcements in store. The most noteworthy is likely to be the monthly U.S. jobs report, given its significant implications for American monetary policy. This report is typically released on the first Friday of the month; however, due to the upcoming National Day on July 4th falling on a Saturday, it will be published a day earlier this month, resulting in closed U.S. markets on Friday.
Starting Tuesday, various purchasing manager indices will be released globally, providing insights into business expectations. Additionally, on Wednesday, stricter EU regulations on steel imports, primarily targeting Chinese competition, will come into effect.
Important corporate announcements in Germany appear to be limited at this time.
Middle East War Remains a Focus
The ongoing conflict in the Middle East continues to be a source of uncertainty. Reports indicate that the U.S. and Iran plan to pause mutual attacks related to the dispute over the Strait of Hormuz and continue negotiations. According to informed sources in Washington, “Both sides will refrain from further measures for the time being.” Ships are expected to navigate freely, while technical discussions regarding the framework agreement are set to continue.
DAX Record Last Set in January
The gap to record levels remains a focal point for the German stock market. On January 13, the DAX reached an all-time high of 25,507.79 points. Ultimately, it concluded trading that day at 25,420.66 points, marking a record close as well.
While the DAX shows slight signs of recovery, the cautious stance among analysts and external economic factors suggest that investors should maintain vigilance as the summer progresses.
By remaining informed on upcoming economic indicators and geopolitical events, market participants can better navigate the complex landscape ahead.
