Dax current: Dax is moving away from the 27,000 point mark – will the year-end rally still follow?

The leading index has so far been able to defy the negative signs from the USA. However, at the end of the trading week, investors are running out of steam.

Dusseldorf. At the end of the trading week, reality returns to the German stock market – at least for a short time. As a result of the latest signs from the USA surrounding former Nvidia boss Jensen Huang, the DAX is trading at 26,720 points and has therefore hardly changed.

On Thursday, the leading index briefly reached the 27,000 mark and set a record of 27,001.67 points. This means that the DAX has temporarily gained more than ten percent since the beginning of the year. The index ultimately ended trading 0.4 percent higher at 26,771 points.

From a chart perspective, HSBC analysts expect that the year-end rally could follow on the German stock market. “As a result, the 27,000 mark reached yesterday should not yet mark the end of the flagpole,” says the analysis.

Thomas Altmann noted on LinkedIn that November tends to be a strong month for the stock market anyway. “With the first jump above 27,000, the Dax has confirmed its long-term seasonal pattern,” wrote the QC Partners portfolio manager. “November is the best month of the year with an average increase of 0.89 percent,” says Altmann.

The leading index has ended the four trading days of the current trading week in positive territory. The Dax last recorded more closing prices with a positive sign in a row at the end of June.

“What we are seeing is that the DAX is trying to swap its trendless phase for a new direction of movement, and that is pointing upwards,” writes Jochen Stanzl, chief market analyst at Consorsbank. In November, the index fluctuated in a range between 25,600 and 26,600 points and has now established itself above.

The signs were rather stressful. The change in leadership at chip manufacturer Nvidia put global technology stocks under pressure. Since the Dax is not a tech-heavy index, the German stock markets remained positive overall, thanks to economic data, strong company balance sheets and falling oil prices.

However, oil prices also came under pressure, at least briefly. US President Donald Trump said on Thursday that the US does not need an agreement with Iran. Meanwhile, oil prices are not finding a consistent direction at the weekend.

North Sea oil Brent rose in price for delivery in January by 0.5 percent to $96.34 per barrel. The price for US oil WTI is just in the red at $88.68 per barrel. On a weekly basis, prices for Brent and WTI have fallen by more than two percent.

Investors are likely to continue to look at the company even after Huang's resignation from Nvidia. According to insiders, Huang had an intimate relationship with another employee. This was told by two people familiar with the matter to the Reuters news agency. This is the second relationship with an employee and the third extramarital affair that became known in the wake of his resignation.

“Nvidia doesn’t have a demand problem, but rather a leadership crisis,” says analyst Stanzl. According to Stanzl, the Huang affair is unlikely to have initially changed the demand for AI chips. The group will present its quarterly figures next week.

In addition, interest rate expectations are likely to play a greater role for investors again. In view of high inflation, US central banker John Williams promised further interest rate increases. The economy is strong and the job market continues to gain strength, but inflation remains high, said the head of the New York Fed District on Thursday. The Federal Reserve (Fed) must take measures to bring inflation back to the two percent target in a timely and sustainable manner.

According to data from the Fed Watch tool on the futures exchange CME, the markets are pricing in an interest rate hike by the US Federal Reserve of at least 25 basis points for December. US producer prices could at least provide indications of inflation in the USA this Friday. They are an indicator of inflation.