DAX Slowed by Wall Street Ahead of U.S. Inflation Data Next Week

Two steps forward and one step back - this is how the DAX has been moving upwards bit by bit since its brilliant rally at the beginning of the year. This week's new high for the year is 15,658 points, around 600 points short of the all-time high at this moment. Even though many indicators suggest that the market is overbought, the bull market continues to feed the bull market.

Rising prices force investors who are not yet positioned or even on the wrong side to jump on the moving train, regardless of any indicators. The good mood is contagious and fundamental conditions fade into the background. Not so on Wall Street, where the fear of rising interest rates just won't go away. No wonder, since the latest economic data all point to a robust economy in the US, which speaks for a further restrictive monetary policy by the Fed.

The Coming Week Will Be Dominated by Us Inflation

In his mid-week speech to the renowned Economic Club in Washington, Fed Chairman Powell still let the stock markets have their way and continued to see positive progress in terms of inflation. Although he did not hold out the prospect of interest rate cuts at the end of the year, he did not clearly reject them either.

Whether this remains, the case will be determined by the data on price developments in the USA, which will be released next week on Tuesday, initially in the form of consumer prices. Further declines are expected in the overall rate, but also in the core rate, which is more relevant for monetary policy.

If the downward trend on the price front is confirmed, after the news of a booming US labor market in January, this would definitely be a factor that could make the Fed's worry lines, and thus also those of investors, somewhat smaller again. If the figures come in stronger than expected, Wall Street in particular is likely to go into reverse gear again, as the indices here left their upward trend last week for the time being. Producer prices will follow on Thursday.

Ionos Stumbles Onto the Stock Exchange

The first major IPO of the year in Frankfurt was not exactly supposed to be a positive omen for the further course of the year. The web hosting provider Ionos, a subsidiary of United Internet, which is already listed in the MDAX, went public at 18.50 euros, already at the lower end of the price range.

And even in the hours that followed, investor interest in the share remained rather restrained, to say the least. On closer inspection, however, it was indeed an interesting company that came to the stock market. Above all, the operating margin of 30 percent should make some investors sit up and take notice. So even if the share did not immediately belong in the portfolio for many, one could perhaps put it on the watch list after a discount of ten percent. 

At Bayer (OTC:BAYRY) the CEO Goes, at Adidas (OTC:ADDYY) the Rapper

While the joy over the change in leadership at the pharmaceutical company Bayer lifted the stock into double-digit positive territory, the end of the partnership with the controversial rapper Kanye West tore a deep hole in the Adidas AG (ETR:ADSGN) balance sheet and sent the stock into double-digit decline as well. Bayer manager Baumann was criticized above all for the Monsanto (NYSE:MON) takeover, which, after numerous legal disputes, cost much more than the mere purchase price of an impressive 63 billion euros.

Whether the new CEO can now get the ship back on course remains to be seen. One thing is clear, however: the share has a lot of catch-up potential. The same applies to the Adidas share, whose price has more than halved since its high in the summer of 2021. If the business with the products from the Yeezy collection has to be completely written off, a loss of around 700 million euros is imminent this year. Even if this does not sound very positive, the recent decline in the share price could be a good opportunity for long-term investors.

Only a few want to get into the DAX before the weekend. However, there are still no major swings to the downside. On the upside, however, a sustained breakout above 15,500 points is also likely to be difficult. The Fear and Greed Index of the news channel CNN also shows that the air is getting thinner on the upside. It is currently at its highest level of the year with 77 out of a maximum possible 100 points, indicating extreme optimism. Investors are "greedy" - often a signal of an imminent correction.
 
DAX - current supports and resistances

Supports: 15,300/15,250 + 15,200/15,150 + 15,100/15,050

Resistances: 15,500/15,550 + 15,650/15,700 + 15,800/15,850