New Record High With a Bitter Aftertaste: Stubborn Inflation Triggers DAX Consolidation!
The DAX marked another historic all-time high on Wednesday, but had to surrender its price gains in late trading. At the Xetra close, a slight deficit of 0.23 percent to 26,331.07 points was recorded, suggesting that the weekly high has likely been reached for now. While strong corporate reports supported the benchmark index in the morning despite high energy prices, inflation concerns took the helm in the afternoon. Inflation remains at an elevated level in both Germany and the US. Consequently, fears of a more restrictive stance by the US Federal Reserve are intensifying across financial markets—market participants promptly utilized the record levels for consistent profit-taking.
Disappointment at E.ON and Crude Oil Near $90: Pressure on the Real Economy is Growing!
Among the individual equities, shares of E.ON in particular came under heavy selling pressure. Despite solid business figures and a confirmation of its annual forecast, the stock lost 3.2 percent and became the laggard of the index—investors simply missed a positive element of surprise. In parallel, the Middle East conflict remains the dominant macro risk. The ongoing stalemate surrounding the opening of the Strait of Hormuz is keeping Brent crude oil prices just below the critical mark of $90 per barrel. With every day that a reliable diplomatic solution is delayed, the fundamental cost pressure on the global economy noticeably increases.
Bulls Under Pressure: Is There Enough Momentum to Defend the 26,000-Point Mark?
For today, Thursday, the central question focuses on whether the benchmark index can sustainably defend its trading range above the psychologically important mark of 26,000 points. If the trend of further rising consumer prices solidifies, the probability of an overdue technical consolidation increases. A temporary shakeout following such a dynamic rally is absolutely standard market behavior and does not call the overarching upward trend into question for the time being. However, should the price of oil remain at its current level or rise further, the air for the bulls in Frankfurt trading will become increasingly thin.
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