Bull Market Reloaded? DAX in All-Time High Fever – Fed Decision as the Tipping Point.
The past trading week accentuated a sustained optimistic underlying sentiment in global stock markets. In particular, the US indices recorded robust price gains, preventing profit-taking, which would typically occur after a phase of significant upward movement. For the leading German index DAX, this resulted in another significant surpassing of the psychologically relevant mark of 23,000 points. At the close of trading, the DAX stood at 23,086 points, representing a weekly gain of 2.62 percent. Reaching a new all-time high in the current month of May thus appears within close reach, with the current positive momentum from the United States potentially fueling this development further.
An interesting aspect in this context is the recently published economic data from the US, which indicates a contraction of the US economy by an annualized -0.3 percent. This development could increase concerns about an impending recession among some investors, potentially leading to considerations of selling. But precisely here lies the explosive thesis: Could this unexpected economic downturn actually prompt the Federal Reserve to ease its monetary policy stance, i.e., implement interest rate cuts? This speculative interpretation seems to be anticipated by the markets and could explain the continued price gains in the stock markets, including European ones. The upcoming meeting of the Federal Open Market Committee (FOMC) under the chairmanship of Jerome Powell next Wednesday will therefore be followed with the utmost attention by market participants. While the current consensus estimate anticipates a retention of the key interest rate, the verbal communication (the "tone") of the Board of Governors will be considered a crucial indicator for the future direction of monetary policy.
Airbus the New High-Flyer of the DAX?
The analysis of individual stocks in the DAX reveals the persistent dominance of established heavyweights. Namely, the shares of Siemens Energy and Rheinmetall continue to be among the top performers and do not yet seem to have fully exhausted their growth potential. A notable movement was shown last Friday by the stock of the aircraft manufacturer Airbus, which experienced a significant upward movement with a price increase of 5.3 percent. The positive business figures of the company appear to be priced in here, and the impression is growing that the Airbus stock has undergone a turnaround, sustainably overcoming the previous downward trend. Is Airbus now rising to become the new high-flyer of the DAX?
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