The German DAX index opened marginally unchanged this morning, hovering around 23,960 points- mirroring its previous day’s closing value. Gains were led by Zalando, Heidelberg Materials and Airbus, while Merck, Commerzbank and Bayer concluded the early trading session at the bottom. This subdued performance follows a notable breach of the psychologically significant 24,000-point threshold yesterday, ending an eight-day streak above that level.
According to Thomas Altmann of QC Partners, the DAX’s recent trajectory is directly linked to a discernible shift in risk appetite on Wall Street. “We’re observing profit-taking activity” Altmann stated, highlighting a growing inclination among investors to secure annual gains through selling. While 2025 is poised to be recorded as a robust year for the DAX, a deeper analysis reveals a concerning distribution of returns. Despite the overall positive performance, only 24 out of 44 companies – those that have been present, albeit sometimes temporarily – contributed to the annual gains, with 18 actually detracting from the overall index performance. This disparity underscores a potential lack of broad-based growth and hints at vulnerability within the index’s constituent companies.
The market remains keenly awaiting the release of the US inflation data for November, a central event expected to heavily influence market sentiment. Current consensus forecasts anticipate a slight increase in the annual inflation rate, edging up from 3.0% in September to an estimated 3.1%. This upward tick further distances the rate from the Federal Reserve’s target of 2%, complicating the prospect of imminent interest rate cuts and potentially fueling concerns regarding inflationary pressures. The European Central Bank’s latest interest rate decision, due later today, will also be scrutinized for signals regarding the Eurozone’s economic outlook.
The euro weakened slightly this morning, trading at $1.1736 – a reflection of broader risk aversion and potentially, anticipation of the ECB’s policy stance. Simultaneously, oil prices have risen, with Brent crude fetching $60.09 per barrel, marking a 0.7% increase from yesterday’s close. This rise contributes to the ongoing concerns surrounding energy costs and their potential impact on European economies and corporate profitability.
