DAX Index Today: Eyes on German Business Climate and US Core Durable Goods

The Overview of the DAX Performance

The DAX rallied 1.55% on Tuesday (April 23). Following a 0.70% gain on Monday (April 22), the DAX ended the session at 18,138.

Service Sector Activity Fueled a Breakout Session

On Tuesday (April 23), service sector PMI numbers for Germany and the Eurozone drove buyer demand for DAX-listed stocks.

The German HCOB Services PMI rose from 50.1 to 53.3 in April. Moreover, the Eurozone HCOB Services PMI increased from 51.5 to 52.9 in April.

Corporate earnings results contributed to the Tuesday gains for the DAX. SAP was among the big names to release earnings results.

US Services PMI Raises Investor Bets on a September Fed Rate Cut

On Tuesday, the US S&P Global Services PMI influenced investor bets on a September Fed rate cut. The S&P Global Services PMI fell from 51.7 to 50.9 in April.

Services sector firms reduced employment for the first time in four years, with input prices rising at the second-lowest pace in three-and-a-half years. Investors raised bets on a September Fed rate cut in response to the employment and input price trends.

Corporate earnings also needed consideration. General Motors (GM), PepsiCo (PEP), Tesla (TSLA), United Parcel Service (UPS), and Visa (V) were marquee names to release earnings results.

On Tuesday, the Nasdaq Composite Index rallied 1.59%. The Dow and the S&P 500 advanced by 0.69% and 1.20%, respectively.

The Tuesday Market Movers

Tech stocks had a mixed session. Infineon Technologies ended the session flat. However, SAP rallied 5.27%. Investors reacted to the Q1 surge in cloud revenue figures.

Bank stocks extended their gains from Monday. Commerzbank and Deutsche Bank advanced by 2.78% and 1.56%, respectively.

Auto stocks had a mixed session. BMW and Porsche saw gains of 0.57% and 0.55%, respectively. Volkswagen rose by 0.04%. However, Mercedes Benz Group declined by 0.19%, with Continental AG ending the session flat.

German Business Sentiment, the ECB, and Earnings

On Wednesday, German Ifo Business Climate figures will warrant investor attention. A larger-than-expected increase in the Index could fuel buyer demand for DAX-listed stocks.

Economists forecast the Ifo Business Climate Index to increase from 87.8 to 88.9 in April. Beyond the headline numbers, investors should consider manufacturing and services sector trends and the Expectations Index.

With the German economy in focus, investors should track ECB commentary. ECB Executive Board members Piero Cipollone, Anneli Tuominen, Elizabeth McCaul, and Isabel Schnabel are on the calendar to speak. Reactions to the PMI numbers and views on interest rate cuts would move the dial.

However, investors must also consider corporate earnings results.

US Core Durable Goods Orders and Corporate Earnings

On Wednesday, US durable goods orders will be in focus. After the disappointing private sector PMIs, weaker-than-expected figures could test bets on the US avoiding a recession. An increasing risk of a US recession may impact buyer demand for DAX-listed stocks.

Economists forecast core durable goods orders to increase by 0.3% in March after rising by 0.5% in February. Furthermore, economists expect durable goods orders to advance by 2.5% after a 1.3% increase in February.

On the earnings calendar, Boeing (BA), Meta (META), and Ford (F) are among the big names to release earnings results on Wednesday.

Near-Term Outlook

Near-term trends for the DAX will hinge on corporate earnings, the US Personal Income and Outlays Report, and ECB forward guidance. Sticky inflation amidst rising investor fears of a US economic recession could test the demand for riskier assets. Nevertheless, corporate earnings could influence DAX trends more.

On the Futures markets, the DAX and the Nasdaq mini were up 59 and 121 points, respectively.

DAX Technical Indicators

Daily Chart

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

A DAX breakout from the 18,200 handle would bring the 18,350 handle into play.

Investors should consider German business sentiment, US core durable goods, the ECB, and corporate earnings.

However, a fall through the 18,100 handle could signal a DAX drop to the 50-day EMA. A break below the 50-day EMA would bring the 17,615 support level into view.

The 14-day RSI at 56.23 suggests a DAX return to the 18,350 handle before entering overbought territory.

4-Hourly Chart

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

A DAX return to the 18,200 handle would support a move to the 18,350 handle.

Conversely, a break below the 18,100 level would give the bears a run at the 50-day EMA. A fall through the 50-day EMA would bring the 17,615 support level and the 200-day EMA into view.

The 14-period 4-hour RSI at 61.62 indicates a return to the 18,350 handle before entering overbought territory.