DAX Hits Record High as Bitcoin Breaks $100K Milestone

Market Overview and Key Updates

1. Political Uncertainty in South Korea

• KOSPI Index: The KOSPI dropped 2.3% intraday, closing with a 1.4% decline, following significant political developments:
• President Yoon Suk-yeol reversed martial law under parliamentary pressure and assured market stabilization measures if needed.
• Speculation of impeachment is growing, with potential new elections taking up to six months, prolonging uncertainty.
• Investor Sentiment: Despite political instability, recent rate cuts by the central bank and a buyback program from South Korea’s largest tech company had bolstered the market. The KOSPI remains 2% above its yearly low, hinting at possible bottoming.
• Outlook: The low P/E ratio of 8.7 for South Korean tech-heavy equities could make Seoul’s market attractive for mid- to long-term investors, despite near-term volatility.

2. Robust US Economic Data

• JOLTS Report (October):
• Job openings rose by 372,000 to 7.74 million, exceeding market expectations of 7.48 million.
• Voluntary resignations hit a five-month high at 3.33 million, signaling confidence in the labor market.
• Retail Sales Growth:
• The Johnson Redbook Index climbed 7.4% YoY for the week ending November 30, indicating robust consumer spending.
• Market Impact:
• U.S. Treasury yields ticked higher across maturities.
• The USD strengthened, with EUR/USD dipping below 1.05, reflecting positive sentiment toward the U.S. economy.

3. Corporate Highlights

• Salesforce:
• Reported Q3 revenue of $9.44 billion, beating estimates of $9.35 billion, and posted an adjusted operating margin of 33.1%.
• Optimism around Salesforce’s AI-driven strategy pushed shares toward record highs.
• Volkswagen Strikes: Nearly 100,000 workers participated in a one-day strike, underscoring labor unrest across major industries.
• Bitcoin Breaks $100,000:
• Surpassed this key psychological milestone, fueled by post-election optimism for crypto.
• President-elect Donald Trump nominated Paul Atikins, a pro-crypto figure, to lead the SEC, signaling a major shift in U.S. crypto policy.

DAX Overview

• Leaders:
• Commerzbank: +2.31%
• Zalando SE: +1.72%
• MTU Aero Engines: +1.43%
• Deutsche Post: +1.18%
• Laggards:
• BASF: -0.87%
• Airbus Group: -0.44%
• SAP: -0.39%
• Henkel AG: -0.42%

Upcoming Earnings

• Premarket:
• Kroger (KR)
• Dollar General (DG)
• Aftermarket:
• Lululemon Athletica (LULU)
• Hewlett Packard (HPE)

Agenda Today (GMT)

• 13:30: USD Initial Jobless Claims – Key labor market data to assess employment trends in the U.S.

DAX Technical Analysis - 1 Day chart

• Following Wednesday’s record high of 20,261, the DAX remains in a strong bullish trend, trading well above the 50-day and 200-day EMAs, confirming upward momentum.
• The 14-day RSI at 72.82 indicates the index is in overbought territory, suggesting the possibility of increased selling pressure near the recent high.

Key Levels to Watch

Upside Resistance:

• 20,350: A break above this resistance level could enable bulls to target 20,500 in the short term.
• 21,350: A breakout above the all-time high of 20,261 could set the stage for a longer-term rally to this target.

Downside Risks:

• 20,000: A move below this psychological support level could signal a retracement toward 19,750.
• 19,750: Breaking below this level would increase bearish momentum, potentially bringing 19,500 into focus.

Factors Influencing DAX Trends

1. Economic Data:
• German Factory Orders: Strong data could support continued gains, while weaker numbers might trigger selling pressure.
2. US Labor Market Data:
• Positive job data could boost global equity sentiment, supporting the DAX, while weak data might weigh on the index.
3. Central Bank Commentary:
• Any hints of further rate cuts from the ECB or Fed could provide additional support to equities.
4. US Tariff News:
• Updates on tariffs could directly impact Germany’s export-heavy economy, influencing DAX performance.

Outlook

• Bullish Scenario: If the DAX holds above 20,000 and breaks through 20,261, it may continue its rally, with 20,500 and 21,350 as key upside targets.
• Bearish Scenario: A sustained drop below 20,000 could signal a deeper correction, with 19,750 and 19,500 acting as key support levels.

Conclusion

• South Korea’s KOSPI faces short-term challenges due to political turmoil but holds mid-term opportunities in its tech-driven market.
• US Economic Strength: Positive labor and retail data reinforce the robust outlook, supporting the USD and equity markets.
• Crypto Milestone: Bitcoin's surge reflects optimism over policy changes and potential regulatory clarity in the U.S.
• DAX Focus: European equities remain mixed, with strong gains in financials and tech offset by declines in industrials like BASF and Airbus.
  
  
  
• --Written by Philip Papageorgiou – Market Analyst
  -Follow me on  X ex Twitter: PhilipForexCom