DAX Could Face a Correction
Yesterday, on Whit Monday, quieter trading was expected, but it quickly became apparent that the DAX's momentum towards an all-time high was limited. As US trading began, the DAX continued to lose buying impetus, ultimately dropping by 0.54 percent by the end of the trading day, closing at 24,174.32 points. For trading today, Tuesday, this means that if yesterday's daily lows are breached, it could lead to a more extended correction, which currently appears to be driven by profit-taking. The potential for this correction is initially seen between 300 and 500 points, equivalent to a price decline of 1.5-2 percent.
US-China Trade Talks Nearing Breakthrough?
Fundamentally, the current market situation is strongly driven by discussions surrounding US-China foreign trade talks. Markets are currently reacting to these talks with a strong US dollar and rising oil prices. This combination is causing stock markets to hold their breath until further clarity emerges and a breakthrough is ultimately achieved. The ongoing tense geopolitical situation also contributes to current market risks.
Even though the DAX declined yesterday, the stock of semiconductor manufacturer Infineon Technologies took first place in the DAX daily ranking with a 1.4 percent gain, followed by BASF with a 1.1 percent increase, and Adidas stock, which rose by 1 percent. Siemens Energy, on the other hand, a stock that has only known records, had to give up 2.2 percent yesterday, without, however, endangering its strong upward trend. Reversal signals in this stock could entice investors to use the brief setback for further purchases.
Today's events will therefore be dominated by the talks between representatives from the USA and China in London. Should a mutually positive breakthrough occur, it could provide a strong impulse for the stock markets. However, the latent risk of a correction setting in remains.
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