- Dax stabilises after falling
After the latest market dip, the Dax stabilized on Tuesday morning. The German benchmark index rose by 0.80 percent to 17,477.75 points, crossing back above the 200-day moving average, which indicates the longer-term trend on the stock market.
The MDax of medium-sized companies gained 1.17 percent to 24,244.02 points. The Eurozone benchmark index EuroStoxx 50 also rose by 0.51 percent.
Concerns about an economic crisis in the USA had weighed on the German stock market at the start of the week. However, on Tuesday, the Nikkei-225 index, which had fallen more than 12 percent the previous day, was on a strong recovery path, closing up 10 percent. The situation in the USA also appears to be improving after a weak start to the week.
Analyst Jochen Stanzl from CMC Markets wrote that the situation had calmed down, although the specter of recession had returned. However, this fear of an economic downturn was currently only in the minds of investors, as there was no concrete evidence.
In Germany, attention is now turning back to the ongoing earnings season. Shares of Zalando, which are highly volatile, gained more than five percent at the top of the Dax.
Experts from Capital Economics also expressed optimism, stating that despite the recent weak jobs data in the United States, a "soft landing" of the economy was still the most likely scenario. If there are further market turmoils, the US Federal Reserve may be forced to ease monetary policy more quickly than expected.
The recent concerns about a recession were particularly sparked by weak jobs data from the USA, which caused a stir on Friday. However, these fears are exaggerated, and there is no reason to panic, wrote Robert Greil, chief strategist at Merck Finck Private Bank. "The July jobs report may indicate a slowing growth pace, but it was also influenced by some special factors," he said. Other indicators, such as the Institute for Supply Management's services sector purchasing managers' index, show positive developments in both employment and order intake.
In Germany, attention is now turning back to the ongoing earnings season. Shares of Zalando, which are highly volatile, gained more than five percent at the top of the Dax. The online retailer continues to benefit from its efficiency measures. According to RBC, the operating result was better than expected, and the gross margin development was encouraging.
Among the biggest winners in the MDax, shares of Rational, the large kitchen equipment supplier, rose by 4.6 percent. The second quarter was characterized by solid sales growth, wrote analyst Peter Rothenaicher from Baader Bank.
The Commission might need to closely monitor the economic situation in the USA due to the recent job data and market volatility. The concerns raised by the weak jobs data should be addressed by The Commission to prevent any potential economic crisis.
