30 AM – a slight increase of 0..1% compared to Thursday’s closing level.
According to Jochen Stanzl, Chief Market Analyst at CMC Markets, the DAX has returned to its trading range from the beginning of the month, coinciding with options expiry. He characterized the index’s overall trend as “shallowly downward” noting a lack of momentum for new record highs while preventing a significant correction. Stanzl attributed some stability to positive performance on Wall Street.
U.S. markets are experiencing a period of record highs, fueled by the Federal Reserve’s recent interest rate cuts. Thursday saw all four major U.S. stock indices reach new peaks simultaneously – an unusual occurrence. Concerns about inflated valuations have not dampened investor enthusiasm.
The concentration of gains within a small group of companies, often referred to as the “Magnificent Seven” is not currently impacting the market’s positive trajectory. Investors are factoring in further growth potential based on the Fed’s monetary policy and the continued strong performance of these companies is mitigating concerns about concentrated risk.
Today, frequently called the “witching day” – a term referring to options expiry – introduces additional uncertainty to the market. Predicting market movements based on options strike prices is challenging and large open positions are considered only one element within a broader range of factors.
Despite its evocative name, “witching day” is largely a myth. While the event receives considerable attention, the resulting insights are often limited. The multitude of other factors influencing market development preclude any definitive analysis based solely on options expiry.
The Euro was slightly weaker this morning, trading at $1.1777, with one U.S. dollar costing €0.8491.
