The unresolved tariff dispute between the world's two largest economies continues to pressure the DAX. The slight recovery seen at the start of the week was immediately negated yesterday, Tuesday, and the leading index closed firmly in the red. Although the index stabilized again in after-hours trading, making today's starting position ambiguous, a nerve-wracking trading day looms. It is feared that the up-and-down course observed on Tuesday will continue, confronting investors with high volatility.
Labor Market Worries as a Catalyst: Is the Next Rate Cut Looming?
Markets are once again turning their attention to the US. Reports of growing concern within the Federal Reserve (Fed) regarding a further interest rate deterioration in the labor market are fueling speculation. The investors' interpretation is clear: weakness in the job market could initiate the next round of interest rate cuts. This fundamental signal is viewed by investors as a positive impulse and could continue to support investment appetite in equity markets despite all geopolitical risks.
BASF and Continental Under Pressure: Analysts and Profit Warnings Shock
Yesterday's rollercoaster ride hit two heavyweights particularly hard: BASF stock lost 2.6 percent after the private bank Berenberg downgraded the paper to "Sell." It was worse for Continental stock, which plummeted by 4.3 percent. Here, a profit warning from competitor Michelin acted as an accelerant, dragging Continental down with it.
DAX on Standby: Volatile Wednesday Expected
Today, Wednesday, will be entirely dominated by the further development of the US-China tariff dispute. Technically, the movement in the DAX remains strongly defined by the existing trading range. Until clear de-escalation in the trade conflict emerges, investors must continue to expect sustained rollercoaster rides and rapid changes in direction during the trading day. Market participants' nerves will continue to be tested.
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.