The German Stock Index (DAX) is consolidating in the immediate vicinity of its historical all-time high and requires renewed impetus to sustainably overcome this significant resistance level. The latest monetary policy decision by the Federal Reserve failed to provide the hoped-for initial spark. Contrary to some expectations, the members of the Federal Open Market Committee left key interest rates unchanged – a first since the last rate cut in December. The US central bank's rationale, citing persistent inflation risks and potential labor market weakness resulting from the Trump administration's protectionist trade policies as continuing latent dangers, led immediately to a strengthening of the US dollar and a corresponding, albeit moderate, reaction in global equity markets.
Bullish Fundamentals Continue to Fuel Price Fantasies
However, the initial price reaction to the Fed decision is likely to prove a temporary phenomenon, as a rate cut was not widely anticipated by market participants anyway. After the initial volatility subsides, a resumption of the overarching upward movement is expected. This continues to imply tailwinds for the DAX to attack its all-time high and ideally climb to new price plateaus.
In parallel, the newly appointed Federal Chancellor Friedrich Merz has begun his diplomatic efforts, undertaking initial state visits to France and Poland. He was immediately confronted with criticism of current German asylum policy, particularly from the Polish government, which views Germany's unilateral approach critically. The potential implications of the new government policy on the capital markets remain the subject of close observation.
On yesterday's trading day, Fresenius, Infineon, and Porsche presented themselves as the three top-performing stocks in the DAX. Fresenius deserves particular attention: the dialysis specialist impressed with excellent results, largely based on realized cost savings. The stock has already recorded a remarkable performance of 17% in the previous month and is poised to cross the €50 mark in the current trading week. From a technical chart perspective, the next price target opens up in the region of €60, which attests to significant further upward potential for the stock.
Conclusion: Between Fed Pause and Political Realignment – Eyes on the Weekend
In summary, the Federal Reserve delivered no monetary policy surprises, Federal Chancellor Merz has launched his foreign policy agenda after a bumpy election start, and a transatlantic economic cooperation between the US and the UK may be on the horizon. Against this backdrop, and despite the DAX's temporary "altitude sickness," we view the upcoming weekend with cautious optimism.
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.