DAX Breaks 27,000: Record High, Rates Weigh
DAX hits 27,001 for the first time, closes at 26,816. Siemens helps, US yields above 5% weigh. What matters on Friday.
Key Takeaways
- The DAX hit an all-time high of 27,001 points and closed at 26,816.
- Three forces collide: corporate earnings, capital rotation and rising rates.
- US producer prices and the zone around 27,000 will decide the next move.
An index at a record high, and yet investors are not buying blindly: the DAX (Germany's main blue-chip index) pushed through 27,000 only to give back much of the jump by the close. At 26,816 points, it ends the day up 0.6 percent. The market is celebrating and hesitating at the same time.
Why the DAX Is Rising: Orders and Rotation
Two drivers sit on the plus side. First, Siemens: the Munich-based group reports a record order backlog and announces a larger payout, according to Finanzmarktwelt. Second, capital is moving from richly valued US tech stocks into Europe's industrial and blue-chip names. The DAX benefits from both.
That Wall Street did not drag the DAX down is a surprise. Nvidia CEO Jensen Huang's departure sent the stock more than 13 percent lower in premarket trading. By the close, only a little over 4 percent of that was left. The Nasdaq 100 recovered quickly as well, with AMD and Broadcom moving higher. The shock fizzled; buyers were waiting.
The Brake Is Yields
On the other side is the bond market. Ten-year US Treasuries now yield more than 5 percent. That makes richly valued equities less attractive and also weighs on gold, which hit a new yearly low, and on Bitcoin (BTC), which slipped below $68,000.
Yields follow the central bank. After Tuesday's inflation report came in above forecasts, more Fed officials want to push further. Waller envisions 0.25 percentage points in December, 0.50 if necessary. Logan sees at least two steps of 0.25 percentage points each. Hammack laments stalled progress. The policy rate currently stands at 3.75 to 4 percent; the Fed meets again on December 9, as Finanzmarktwelt notes.
Friday: Two Data Points, One Level
First, at 11:00 a.m. CET, the second estimate of eurozone growth for the third quarter. Then, at 2:30 p.m. CET, US producer prices for October: expectations are 0.4 percent month over month and 0.3 percent in the core rate. An upside surprise would feed rate worries.
Scenarios
If the DAX manages a sustained break above the zone from 26,955 to 27,000 points, 27,089 points would be the next target, according to Finanzmarktwelt.
If it fails, the first support zone sits at 26,670 to 26,630 points, Thursday's intraday low. If that breaks, 26,500 and 26,370 points follow. In a deeper correction, the open gap at 26,267 points comes into view.
This article is for informational purposes only and is not investment advice.