DAX at the Gates of Eternity: The 25,000 Milestone Within Reach
The record-breaking frenzy on the German stock market shows no signs of slowing down. On Tuesday, the DAX seamlessly built upon its impressive performance from the start of the week, cementing yet another historic all-time high at 24,969.17 points. This leaves the leading index just 31 points shy of breaking the prestigious psychological barrier of 25,000 points. It appears to be only a matter of hours or days until this milestone falls. Interestingly, the market barely reacted to the slight dip in German inflation—a clear sign that investors have already shifted their focus toward other global catalysts.
Interest Rate Hopes vs. Geopolitics: Where Will the Next Impulse Come From?
However, caution is advised: historically, reaching such record levels often triggers a wave of profit-taking. It would not be unusual to see a sharp correction after a brief "overshoot" of the 25,000 mark. As the initial New Year euphoria gradually reaches its peak, fundamental aspects are returning to the forefront.
On Wednesday morning, the financial world will be watching the Eurozone inflation data with bated breath. Market consensus expects a value of exactly 2.0%. Since this lands precisely within the ECB's target corridor, it is unlikely to spark new fantasies of aggressive rate cuts. Far more "fuel" may be provided by the US labor market data from ADP. Should the situation in the US job market show further signs of cooling, the market could interpret this as a signal for the Federal Reserve to cut rates sooner than planned—the perfect propellant for the DAX to soar past the 25,000 threshold.
Oil Price Volatility Amid Venezuela Crisis: A Risk for Energy-Intensive Stocks
A shadow is currently being cast over the trading floor from the geopolitical side. The tense situation in Venezuela, following the recent US military intervention, has caused crude prices to fluctuate, fueling fears of rising energy costs. This cost pressure could dampen the enthusiasm in the equity markets. In particular, energy-intensive DAX heavyweights such as BASF or the automotive supplier Continental could come under pressure if the supply situation tightens or oil prices see a sustained spike. Investors should therefore keep a very close eye on the commodity markets despite the ongoing hunt for records.
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