Black Monday in the DAX: Year-End Rally on the Brink – Is the Dream Over?
A deeply red start to the week caught investors off guard. After a brief positive morning, the DAX knew only one direction: down. With a loss of 1.2 percent on Monday and no relief from the also weak US exchanges, the question arises: Was this the final rejection of the hoped-for year-end rally? US markets suffered from fears that a further interest rate cut would fail to materialize this year. The Dow Jones also fell by 1.2 percent, the S&P 500 lost 0.9 percent, and the Nasdaq corrected by 0.8 percent.
DAX Caught in Fed Disappointment: Confidence Wanes
Although the probability of another interest rate cut by the Federal Reserve technically did not change yesterday (still a 46% probability according to the Fed Watch Tool), the market reaction clearly shows how much confidence has dropped. In such scenarios, the German exchange quickly catches the "flu" when the US exchange "catches a cold."
Siemens stocks remain heavily pressured after the spin-off announcement: Siemens AG fell by 2.8 percent, and Siemens Healthineers lost 2.5 percent. Commerzbank placed itself in the middle of the biggest losers with a decline of 2.7 percent on yesterday's black Monday.
Moment of Truth at 23,270 Points: Is a Major Correction Looming?
The DAX is now directly facing an existentially important support level at 23,270 points. This price level marked the low in September and also withstood a sell-off in June. Should this value break sustainably, the long-thought-dead major correction would be more alive than it has been in weeks. For today, Tuesday, it will be crucial whether buyers can defend this support to once again avert the downward spiral.
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