Stock Market Outlook: DAX Given China Boost, S&P 500 Signals Warning

By Justin McQueen

DAX | ENCOURAGING CHINESE DATA SPARKS A REBOUND

A strong week for the DAX thus far, which has gained over 3.5% with the index underpinned at the beginning of the week following encouraging data out of China whereby the manufacturing sector moved back into expansionary territory. As a reminder, German companies and in particular the auto sector have a large exposure to China. Alongside this, upbeat PMI figures throughout the Eurozone alleviated fears that the weakness in the manufacturing sector is spreading the whole economy as the services sector picked up. However, with the DAX approaching the top of the channel and the relative strength index is nearing overbought territory, which in turn may see the psychological 12000 out of reach in the near-term.

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