The DAX experienced a notable pullback following the long weekend. By the close of trading on Xetra, the index was calculated at 23,991 points, representing a drop of 1.2% compared to Thursday’s pre-holiday reading. After starting the day positively, the DAX abruptly turned negative midday, and subsequently continued to shed losses throughout the afternoon session.
Meanwhile, oil prices rose sharply. On Monday evening, a barrel of North Sea grade Brent crude cost $114.00, marking a 5.4% increase from the previous day’s closing price.
Andreas Lipkow, Chief Market Analyst at CMC Markets, noted that trading volume remains below average, causing investors to recall the old market adages like “Sell in May”. He observed that investors are currently in a difficult spot, needing to weigh whether corporate data or macroeconomic indicators should carry more weight in their investment decisions.
Lipkow explained that Wall Street is expected to be particularly active this week, as roughly 20% of S&P 500 companies are due to release their earnings. He contrasted the current situation with the US reporting season-which was reportedly much stronger than many investors had anticipated-versus Germany’s current reports, which were somewhat less robust. This indicates a general widening disparity between European and American corporate performance.
Consequently, attention this week is heavily focused on the US job market and future US monetary policy, especially given scheduled speeches by 11 central bankers. The higher energy costs are not expected to glide past the real economy smoothly, and the fertilizer market situation could also trigger price turbulence in the food sector. These complex, downstream effects make it challenging for many investors to piece together a full picture that integrates quarterly earnings with consumer behavior.
In currency terms, the Euro weakened on Monday evening, costing $1.1686. The dollar, in turn, could be acquired for 0.8557 Euros.
