DAX Index Today: Eurozone Stats, US CPI Report, Earnings, and 19,000

The Overview of the DAX Performance

The DAX fell by 0.14% on Tuesday (May 14). Following a 0.16% loss on Monday (May 13), the DAX ended the session at 18,716.

German Inflation, ZEW Economic Sentiment, and Earnings

On Tuesday (May 14), finalized German inflation numbers and the German ZEW Economic Sentiment Index drew investor interest.

According to finalized figures, the annual inflation rate stayed at 2.2% in April. The numbers had a limited impact on investor expectations of a June ECB rate cut. ECB commentary continued to signal a June rate cut following the release of the preliminary numbers.

The German ZEW Economic Sentiment Index jumped from 42.9 to 47.1 in May, aligning with expectations of an improving macroeconomic environment. Better-than-expected figures drove buyer demand for DAX-listed stocks before the US session.

US Producer Prices and Fed Chair Powell

Later in the Tuesday session, US producer prices attracted investor attention, rising 2.2% year-on-year in April. However, downward revisions to March numbers limited the impact of the report on the DAX. Producer prices increased 1.8% in March, down from 2.1%.

Significantly, Fed Chair Powell focused on the March numbers during a highly anticipated speech. Powell considered the report mixed. While suggesting interest rates should be higher for longer, the Fed Chair poured cold water on speculation about a Fed rate hike.

Easing fears of a Fed rate hike drove buyer demand for riskier assets. On Tuesday (May 14), the Nasdaq Composite Index advanced by 0.75%. The Dow and S&P 500 ended the session up 0.32% and 0.48%, respectively.

The Tuesday Market Movers

Brenntag AG tumbled 8.26% as investors reacted to lower earnings forecasts for 2024. Rheinmetall AG declined by 2.72% after missing earnings forecasts.

However, auto and banking sector stocks ended the session in positive territory.

Volkswagen rallied 2.61%. Investors responded to news of Volkswagen planning to offload Traton SE shares. Mercedes Benz Group and Porsche ended the session up 1.42% and 1.04%, respectively. BMW advanced by 0.78%.

Commerzbank and Deutsche Bank saw gains of 3.21% and 1.44%, respectively. News of French President Macron supporting consolidation of the European banking sector and the sale of French banks to European rivals fueled buyer appetite for bank stocks.

Eurozone GDP, Industrial Production, and Earnings

On Wednesday (May 15), GDP and industrial production numbers for the Eurozone will warrant investor attention.

According to preliminary numbers, the Eurozone economy expanded by 0.3% in Q1 2024 after contracting by 0.1% in Q4 2023. Revisions to the first estimate numbers could impact market risk sentiment.

Nevertheless, industrial production numbers also need consideration. Economists forecast industrial production to increase by 0.5% in March after rising by 0.8% in February.

While the stats will draw investor interest, corporate earnings also need investor attention.

Allianz, Commerzbank, Merck, and Thyssenkrupp AG are among the big names to release earnings results.

US Economic Calendar: US CPI Report, Retail Sales, and FOMC Member Speeches

On Wednesday, the all-important US CPI Report will influence market risk sentiment. Economists forecast the US annual inflation rate to ease from 3.5% to 3.4% in April. Furthermore, economists expect the core inflation rate to fall from 3.8% to 3.6%.

Softer-than-expected inflation numbers could raise investor bets on a September Fed rate cut. A less hawkish Fed rate path could drive buyer demand for riskier assets.

However, US retail sales figures may influence the Fed interest rate trajectory. Economists forecast retail sales to increase by 0.4% in April after rising by 0.7% in March. Weaker-than-expected retail sales figures could signal a softer inflation outlook and a less hawkish Fed rate path.

Beyond the numbers, FOMC member speeches also need monitoring. FOMC members Neel Kashkari and Michelle Bowman are on the economic calendar to speak. Reactions to the US CPI Report, the retail sales figures, and comments about the Fed rate path could move the dial.

Near-Term Outlook

Near-term trends for the DAX will hinge on the US CPI Report, central bank commentary, and corporate earnings. However, a hotter-than-expected US CPI Report could impact investor bets on multiple ECB rate cuts and buyer demand for DAX-listed stocks.

On the Futures markets, the DAX and the Nasdaq mini were up 64 and 9 points, respectively.

DAX Technical Indicators

Daily Chart

The DAX sat comfortably above the 50-day and 200-day EMAs, affirming the bullish price signals.

A DAX break above the Friday (May 10) all-time high of 18,846 could signal a move to 19,000.

Economic indicators for the Eurozone, corporate earnings, US inflation numbers, US retail sales figures, and FOMC member chatter need consideration.

However, a drop below 18,700 could signal a fall toward the 18,500 handle. A break below 18,500 could give the bears a run at the 18,350 handle.

The 14-day RSI at 66.77 indicates a DAX move to the Friday all-time high of 18,846 before entering overbought territory.

4-Hourly Chart

The DAX remained well above the 50-day and 200-day EMAs, confirming the bullish price trends.

A DAX break above the all-time high of 18,846 could support a move to 19,000.

Conversely, a DAX drop below the 18,700 handle could give the bears a run at the 18,500 handle.

The 14-period 4-hour RSI at 72.70 shows the DAX in overbought territory. Selling pressure may intensify at the all-time high of 18,846.