The DAX remains lethargic. Neither the agreement in the US-China trade dispute nor the interest rate decision by the ECB or the announcement of US nuclear tests could lure the German leading index out of its reserve. Investors appear to be running out of ideas on how the future of DAX companies could take a positive turn. Sentiment is depressed, and the index is stalled. On Thursday, the DAX closed almost unchanged with a loss of 0.02 percent at 24,118.89 points, and even declined further in after-hours trading.
ECB Let Hopes Dissipate: Rates Remain Stable
The European Central Bank (ECB) saw no reason for a rate adjustment. The interest rate level remains unchanged at 2 percent, as the inflation parameter critical for the ECB is nearly at its target level. Consequently, the central bankers could not provide any positive impulse to the DAX. The stalemate thus continues, and it remains uncertain whether the index can close the trading week positively.
The top performer on Thursday was Scout24 with a gain of 3 percent, followed by Airbus with a 2.1 percent increase.
Psychological Alarm: DAX Refuses to Engage the Forward Gear
The tension in the DAX is rising daily. The refusal to absorb positive impulses and engage the forward gear is becoming increasingly dangerous. The current sentiment, measured by the Put/Call Ratio, looks threatening, as investors are increasingly hedging against falling prices with puts. The longer this stalemate continues without the uptake of new positive impulses, the more likely the scenario that the bears will ultimately spoil the expected year-end rally for the bulls.
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