DAX 30 Rejected Again at 15,800; ZEW Sentiment Slumps on Gloomy Outlook

DAX 30 Rejected Again at 15,800; ZEW Sentiment Slumps on Gloomy Outlook

Key Talking Points:

DAX 30 battling to find direction as buyers and sellers go head to head

The ZEW economic sentiment indicator drops more than expected to 40.4

The tantrum we saw yesterday in commodities hasn’t really helped settle the mood in the markets, keeping equities subdued. The DAX 30is struggling once again to build gains above 15,800 having being rejected for a third time since mid-June, with the drop in gold and oil likely spooking sentiment away from consolidating higher.

DAX 30 Daily chart

The daily chart is showing again a clear picture of indecision, with yesterday’s candlestick having no body at all and today’s set up following the same pattern so far. Momentum indicators are showing willingness on behalf of buyers with the RSI sitting comfortably on the 60 mark whilst the stochastic is settling above 80, but sellers remain strong around 15,800 and it is likely going to take a big build-up in momentum to break above this area, so we’re likely to see the DAX trading lightly between 15,780 and 15,720 in the next few sessions in the absence of a catalyst.

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One of the reasons behind the weakness in commodities in the last few sessions is concern about rising cases of the Delta variant in both the US and China, which is causing demand to weaken. Cases in the US have risen to a 6-month high whilst China is also dealing with the effects of recent devastating flooding, which is making it more difficult to contain the new outbreaks.

In Europe, we had the ZEW economic sentiment index out this morning, dropping more than economists had forecasted and painting a rather gloomy picture. The index was expected to fall further to 56.7 in August against a 63.3 reading seen in the previous month, but the actual figure came in at 40.4, the worst reading since November 2020.

ZEW President Achim Wambach said, “expectations have declined for the third time in a row. This points to increasing risks for the German economy, such as from a possible fourth covid-19 wave starting in autumn or a slowdown in growth in China.”

The reaction in the DAX 30 has been very limited but it isn’t uncommon that the equity space reacts a little slower than other assets, so it may be the case that this negative reading builds on top of the already dampening sentiment and will then take the index lower in the next few days.

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— Written by Daniela Sabin Hathorn, Market Analyst

Follow Daniela on Twitter @HathornSabin

SENTIMENT/DAX-Anleger sitzen still

Die derzeitige Ruhe an den Börsen spiegelt die Stimmung der DAX-Anleger wider. Wie der jüngsten wöchentlichen Sentimenterhebung der Deutschen Börse zu entnehmen ist, bleiben die professionellen Anleger bei ihrer Positionierung. Weiter sind 32 Prozent optimistisch, 39 Prozent pessimistisch und 29 Prozent neutral gestimmt. Bei den Privatanlegern gibt es zumindest ein wenig Bewegung: Hier beschreiben sich 35 Prozent (-2 Punkte) als Bullen, 39 Prozent (+ 3 Punkte) als Bären und 26 Prozent (-1 Punkt) als Neutrale.

Obgleich der DAX zum Erhebungszeitpunkt nun das sechste Mal hintereinander einen Anstieg verbuchen konnte, der in der Summe immerhin 4,4 Prozent betrug, hat sich am Stimmungsbild der institutionellen und privaten Investoren damit während dieser Zeit per Saldo praktisch nichts geändert. Nach Einschätzung von Sentiment-Analyst Joachim Goldberg ist auf der Oberseite mit erhöhtem Angebot zwischen 16.150 und 16.200 Zählern zu rechnen. Die Unterseite dürfte im Bereich um 15.550/15.600 Punkte durch Nachfrage heimischer Investoren ordentlich abgesichert sein.

Etwas unternehmenslustiger zeigen sich die US-Anleger. Laut der wöchentlichen Erhebung der American Association of Individual Investors (AAII) sind 43,4 Prozent der US-Anleger nun zuversichtlich gestimmt nach 39,6 Prozent in der Vorwoche. Als Bären bezeichnen sich 33,3 Prozent nach glatt 33 Prozent. Damit verbleiben 23,2 Prozent im neutralen Lager, nach 27,5 Prozent in der Vorwoche.

DJG/mpt/gos

(END) Dow Jones Newswires

September 02, 2021 03:44 ET (07:44 GMT)

European Stocks Have Record in Sight on Hopes Stimulus Will Stay

(Bloomberg) – European equities rose on Monday, boosted by optimism that curbs to central bank stimulus will be delayed, while traders focused on new additions to Germany’s benchmark.

The Stoxx 600 Index ended 0.7% higher, within 0.1% of a record high reached in mid-August, though a closed U.S. market saw thinner volumes than usual. Germany’s DAX Index advanced 1% after gaining new members Zalando SE and HelloFresh SE as part of a revamp of the benchmark.

European stocks are trading within a whisker of a recent record level as attention turns to the outlook for stimulus. Sebastien Galy, macro strategist at Nordea Fund, said that prospects of a delay to tapering by the U.S. Federal Reserve were supporting equity markets, a sentiment he expects to persist.

“The mentality of ‘buy on dip’ is as robust as ever taking negative news such as U.S. nonfarm payrolls as good news, which is typical of an advanced carry,” Galy said, referring to Friday’s U.S. jobs data. A weaker-than-expected jobs print suggests that the Fed could delay scaling back its asset purchases at its meeting later this month.

On Monday, the region’s equities were bolstered by the technology sector as shares in heavyweight Prosus NV rose and TeamViewer AG and Nordic Semiconductor ASA also rallied. Separately, Norsk Hydro ASA jumped 3.4% amid a spike in aluminum prices, while an earnings update and an analyst downgrade weighed on Dechra Pharmaceuticals Plc, which fell 3.3%.

Norsk Hydro Up Amid Guinea Unrest, Spie Down: EMEA Equity Movers

Thursday’s European Central Bank decision will be a key focus for investors, with recent hawkish comments from some speakers prompting concerns that it could be looking to pare back its support measures.

Despite these worries, strategists at JPMorgan Chase & Co. remain positive on the direction of global equities, recommending investors keep using any periods of weakness to add risk.

More specifically on Europe, Esty Dwek, head of global market strategy at Natixis Investment Managers, said that she sees a lot of potential for the region’s equities into the year-end.

Story continues

“We think that growth is going to hold up better than expected into the third and fourth quarter,” Dwek said on Bloomberg TV. “It’s just being delayed by the delta variant. But hopefully we’re starting to see peaks in cases across Europe and the U.S., which means growth can hold up, the European recovery can continue to unfold.”

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