DAX Index Today: Manufacturing PMIs from China, Germany, and the US in Focus

The Overview of the DAX Performance

The DAX advanced by 0.01% on Friday (May 31). Following a 0.13% gain on Thursday (May 30), the DAX closed the session at 18,498. Significantly, the DAX rose by 3.16% in May despite a three-week losing streak. In the week ending May 31, the DAX fell by 1.05%.

China PMIs and German Retail Sales Disappoint

On Friday, China NBS Manufacturing and Non-Manufacturing PMI numbers fell short of forecasts. Significantly, the NBS Manufacturing PMI fell from 50.4 to 49.5, signaling a contraction midway through Q2 2024.

Early in the European session, German retail sales suggested a softer inflation outlook. Retail sales slid by 1.2% in April after surging 2.6% in March.

However, Eurozone inflation numbers for May affected buyer demand for DAX-listed stocks. The annual inflation rate increased from 2.4% to 2.6%, with core inflation up from 2.7% to 2.9%. The hotter-than-expected inflation figures tested investor bets on multiple post-June ECB rate cuts.

US Jobs Report Offers Little Market Relief

On Friday, US inflation numbers failed to spark a late breakout. The US Core PCE Price Index increased 2.8% year-on-year in April after advancing by 2.8% in March. Sticky inflation numbers could influence the Fed rate path.

Nevertheless, personal income and spending saw less marked increases, limiting the impact of the Personal Income and Outlays report on the DAX.

The Nasdaq Composite Index slipped by 0.01%. However, the Dow and S&P 500 saw gains of 1.51% and 0.80%, respectively.

The Friday Market Movers

Siemens Energy AG slid by 4.39%, with SAP and Infineon Technologies seeing losses of 1.55% and 0.70%, respectively.

Bank stocks also ended the session in negative territory. Commerzbank declined by 1.05%, with Deutsche Bank falling by 1.32%.

However, auto stocks had a positive session. Porsche rose by 0.84%. Mercedes Benz Group and BMW advanced by 0.71% and 0.63%, respectively. Volkswagen ended the session up 0.44%.

German and Eurozone Manufacturing in Focus

On Monday (June 3), finalized German and Eurozone Manufacturing PMI numbers need consideration.

According to the preliminary surveys, the German Manufacturing PMI increased from 42.5 to 45.4 in May. Furthermore, the Eurozone Manufacturing PMI advanced from 45.7 to 47.4.

Revisions to the preliminary numbers could influence buyer-demand for DAX-listed stocks.

Earlier in the Monday session, PMI numbers from China set the tone. The Caixin Manufacturing PMI increased from 51.4 to 51.7 in May.

US Manufacturing PMIs in Focus

Later in the Monday session, the ISM Manufacturing PMI will attract investor attention. Economists forecast the ISM Manufacturing PMI to increase from 49.2 to 49.8 in May. A manufacturing sector return to expansion could boost buyer demand for riskier assets.

Other stats include finalized S&P Global Manufacturing PMI figures. However, the ISM Manufacturing PMI will likely impact market risk sentiment more.

Near-Term Outlook

Near-term trends for the DAX will hinge on US and Euro area Services PMIs and the US Jobs Report. Hotter-than-expected Services PMIs and US labor market data could impact investor bets on multiple 2024 ECB and Fed interest rate cuts.

On the Futures markets, the DAX and the Nasdaq mini were up 170 and 55 points, respectively.

DAX Technical Indicators

Daily Chart

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

A DAX break above the 18,500 handle would support a move toward 18,650. A break above the 18,650 handle could signal a return to 18,700.

Manufacturing sector PMIs need consideration.

However, a DAX drop below 18,400 could give the bears a run at the 50-day EMA.

The 14-day RSI at 50.35 suggests a move to 18,800 before entering overbought territory.

4-Hourly Chart

The DAX remained below the 50-day EMA while holding above the 200-day EMA, sending bearish near-term but bullish longer-term price trends.

A DAX break above the 50-day EMA would support a move toward the 18,650 handle.

Conversely, a DAX drop below the 18,400 handle could give the bears a run at the 18,200 handle.

The 14-period 4-hour RSI at 36.74 suggests a DAX fall below the 18,400 handle before entering oversold territory.