DAX Trending South: Bears Tighten Their Grip – Can US Jobs Save the Weekend?
That certainly wasn’t to the liking of traders and investors this past Thursday: for the third consecutive day, the German blue-chip index had to book a loss. The DAX bid farewell to the session with a decline of 0.46%, closing at 24,491.06 points. Despite stable industrial capacity utilization, fundamental facts currently seem to be taking a backseat to psychology. Market uncertainty remains palpable, and the violent swings in the precious metals markets are doing their part to undermine confidence.
Human Emotion in an Algorithmic Market?
Interestingly, the current phase demonstrates once again that despite all the high-tech trading, stock markets react in deeply human ways. Emotions like fear and skepticism are presently overshadowing rational data. Even the ECB was unable to calm the waters with its latest interest rate decision on February 5, where it held the deposit rate steady at 2.00%. Investors are largely ignoring the solid performance of the core industry, staring instead at the volatility in gold and silver. It appears the floor is virtually waiting for the next negative impulse rather than seizing existing opportunities.
Bayer as a Beacon of Hope: Pharma Breakthroughs Revive Spirit
A completely different picture emerged on Thursday for Bayer. With a robust gain of 3.3%, the Leverkusen-based company secured the top spot for the day. The sigh of relief under the "Bayer Cross" is almost audible: on one hand, the chronic glyphosate litigation in the US is showing signs of easing; on the other, the pharma pipeline is finally delivering positive headlines with its hopeful drug Asundexian, which significantly reduces stroke risk. Bayer currently leads the 3-month performance rankings with a staggering 70.9% return, leaving even high-flyers like Siemens Energy (38.8%) far behind.
Showdown This Afternoon: Focus on US Labor Market Data
How the DAX signs off into the weekend today will depend heavily on the US Non-Farm Payrolls (scheduled for 2:30 PM CET). These are considered a "hot indicator" for the Federal Reserve's future stance on interest rate cuts.
Technical Summary: Visually, the chart remains battered, yet a small glimmer of hope persists: the bears have not yet been able to break Monday's low on a closing basis. If today's US data is interpreted positively, it could provide the necessary strength for a conciliatory end to the week. If not, the "train to the south" may pick up speed again on Monday.
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades (“AT”). The information does not contain a record of AT’s prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk. Forecasts are not guarantees. Rates may change. Political risk is unpredictable. Central bank actions may vary. Platforms’ tools do not guarantee success.