DAX Outlook for the Week Ahead: Cautious Investor Sentiment and Key Economic Indicators
Important Developments Ahead Featuring DAX, Trump, China, Rheinmetall, Allianz, and Other Key Players This Week
The upcoming trading week is set to be significant for the German stock market, with the DAX (WKN: 846900) expected to face a series of potential challenges and opportunities.
A Cautious Market
Currently, the DAX is hovering below the psychologically important 24,000-point level, with a slight recovery to around 23,846 points but struggling to break higher. This cautious investor sentiment is due to ongoing trade tensions and economic indicators such as the weakening Purchasing Managers' Index (PMI) in the service sector. These factors contribute to market fragility, as the market remains sensitive to economic data and geopolitical developments.
Seasonal Weakness
Historically, August tends to be a weak month for the DAX, with an average decline of around 2.2% and finishing in positive territory only about 47% of the time. Major German stocks, such as Thyssenkrupp, BMW, and Volkswagen, often see significant downward pressure during August, reflecting broader seasonal volatility.
Key Economic Factors
This week, attention is likely to turn to the German industry's order intake in June, which will be announced mid-week. Additionally, the June data on industrial orders in the US, to be released on Monday, could provide insight into economic development and US monetary policy.
Medium to Long-term Forecasts
Despite the near-term challenges, longer-term forecasts suggest a generally positive trend for the DAX through the rest of 2025, with predicted levels rising from about 23,600 in early August to average monthly values around 23,700–25,400. Year-end predictions for 2025 foresee the DAX approaching or exceeding 25,000 points, with potential growth continuing toward 30,000 by 2027. These projections assume no major adverse shocks to the global economy or trade relations.
Potential Correction Factors
Zoll issues are seen as a potential correction factor in the German leading index, according to Chief Market Analyst Christian Henke from broker IG. New trade deals announced by Trump will impose new tariffs of 15 to 40 percent on around 70 countries, including the European Union, starting from Thursday. These developments could potentially slow exports and weigh on the DAX.
Upcoming Reports from DAX Companies
Several DAX companies are set to report their figures this week, including Rheinmetall (WKN: 703000), Infineon, Commerzbank, Siemens, Siemens Energy, Zalando, Allianz, DHL, and Deutsche Telekom. The news about Rheinmetall is derived from dpa-AFX.
Watch Out for Export Figures
The German industry's export figures due out on Thursday are likely to be in focus this week. Economist Ralph Solveen at Commerzbank believes the higher tariffs are slowing exports to the US, and expects another minus for June.
Investors should monitor trade tensions and economic indicators closely this week, as these remain the main drivers of near-term volatility and trend direction.
The caution in the market, influenced by ongoing trade tensions and economic indicators, poses challenges for investing in the stock-market, specifically the DAX, subsequently impacting the business sector.
The upcoming reports from DAX companies and the German industry's export figures could provide key insights for finance professionals, potentially influencing the near-term direction of the stock-market.
