High-Level Consolidation: The DAX is Running Out of Steam in Record Territory!
At the start of trading, the German benchmark index attempted to reach its recent record marks once again, but had to abort the bull run over the course of the day. With a closing price near the daily low at 26,299.74 points and a slight loss of 0.12 percent, the DAX is showing unmistakable signs of fatigue. Equity markets are currently stuck in a fundamental dilemma: With the domestic earnings season rapidly drawing to a close, the trading floor lacks fresh, company-specific momentum. At the same time, the geopolitical tug-of-war in Iran is not yielding any new insights, and solid but unspectacular producer prices are missing the necessary "wow effect" for further price jumps. The historic rally is pausing in a holding pattern.
Contrasting Fortunes Among Individual Equities: SAP Weakens, Vincorion and Sixt Shine
Beneath the surface of the index, a highly heterogeneous picture is emerging. Tech heavyweight SAP recorded significant profit-taking for the second consecutive day, dropping by 2.6 percent. Vincorion presented a significantly more positive picture: The former Jenoptik subsidiary rewarded investors with a double-digit price jump following an optimistic forecast upgrade. Mobility service provider Sixt also impressed with a robust second quarter. Energiekontor, on the other hand, sent a mixed signal; while the company reported rising revenues, it was burdened by declining operating profits. Without the broad support of the heavyweights, the overall market currently lacks the necessary traction.
Macro Data Takes the Helm: US Consumption as the Tipping Point
Today's focus is shifting massively from the corporate side to the macroeconomic side. In the morning, a concentrated data package from the Eurozone is on the agenda, including Q2 GDP. However, the actual direction is likely to be determined in the afternoon on Wall Street: At 2:30 p.m., US retail sales will follow, closely trailed by the University of Michigan consumer sentiment index. From a chart perspective, the roadmap for the DAX is now clearly defined: If the index can hold its ground above the critical support of 26,168 points, the upward trend remains intact, and a renewed attack on the all-time high at 26,573 points is possible at any time. However, a sustained downward breach would drastically increase the risk of a sharp consolidation for the overbought index.
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