Breather Following the Recovery Rally: DAX Remains Paralyzed in Sideways Trend!
Following the brilliant relief rally at the end of the week, the German benchmark index took a noticeable breather at the start of the new trading week. In a low-impulse sideways market, the DAX closed with a minimal gain of 0.06 percent at 25,246 points. During the day, the stock market barometer bounced off the hurdle of 25,325 points, ending trading below the closely watched 100-day moving average for the second consecutive day. The market simply lacked the follow-through impulse to continue Friday's dynamic rally. Instead, stubborn headwinds quickly choked off the buying mood again: a high oil price level of over 100 US dollars for Brent crude, climbing bond yields in Europe, and simmering political uncertainties in Germany, France, and Spain consistently kept investors on the sidelines.
Rheinmetall Shines in a Gloomy Environment: Technical Chart Hurdles Remain High
At the corporate level, selected stocks defied the general lethargy. Defense contractor Rheinmetall took the lead in the DAX with a strong gain of 2.4 percent to 980 euros, followed by Fresenius Medical Care and Volkswagen. At the same time, all eyes were on Deutsche Telekom, which catered to the industry's current technology focus with its AI investor day in Bonn. From a technical chart perspective, the situation remains tense: the benchmark index will only generate a valid initial signal of relief with a sustainable recapture of the 100-day moving average at around 25,398 points, while a clear buy signal requires a jump above the previous week's high. On the downside, the 200-day moving average at the previous week's low of 24,832 points continues to provide support.
Stress Test for the Economy: German Orders and US Labor Market in Focus
For tomorrow, Tuesday, the fundamental macroeconomic picture rapidly moves to center stage. Early in the morning, German factory orders for August will deliver the first hard data point of the week. Should the forecast decline of 1.0 percent turn out to be more drastic, economic worries for domestic industry threaten to deepen. In parallel, the auction of German treasury notes at noon will reveal exactly how strong the current yield pressure in the bond market truly is. In the US afternoon, the next critical touchstone follows with the ADP employment report. The all-decisive core question is: Will the ADP report confirm the cooldown and thus continue to nourish the rate-cutting logic that bad job data is good equity news, or will the mix of domestic industrial weakness and high interest rates spark renewed selling pressure?
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