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The German economy contracted by 0.1% in Q3 vs. forecasts of a 0.3% contraction. Softer-than-expected German inflation figures supported the appetite for DAX-listed stocks. In October, the German annual inflation rate softened from 4.5% to 3.8%. Economists forecast an inflation rate of 4.0%.<\/p>\n
US economic indicators<\/a> tested the appetite for riskier assets. However, easing fears of a regional Middle East conflict and a pullback in Treasury yields supported a rebound across the US equity markets. WTI crude and Brent tumbled by 3.78% and 2.84%, respectively, on containment of the Middle East conflict. Containment would limit the impact of the conflict on supply.<\/p>\n On Monday, the Dow<\/a> gained 1.58%. The Nasdaq<\/a> Composite Index and the S&P 500<\/a> ended the session up 1.16% and 1.20%.<\/p>\n Siemens Energy AG<\/strong> rallied by 12.66%, on German government support. Bank stocks also made gains on better-than-expected GDP numbers. Deutsche Bank<\/strong> and Commerzbank<\/strong> saw gains of 0.02% and 0.95%, respectively.<\/p>\n However, Infineon Tech<\/strong> and Sartorius AG<\/strong> were a drag on the DAX, sliding by 6.35% and 5.43%.<\/p>\n The auto sector also struggled. Mercedes Benz Group<\/strong> saw more losses after disappointing earnings results. Mercedes Benz Group<\/strong> and BMW<\/strong> declined by 1.12% and 0.88%, respectively. Porsche<\/strong> and Daimler Truck Holding<\/strong> saw losses of 0.73% and 0.40%, with Volkswagen<\/strong> falling by 0.15%.<\/p>\n On Tuesday, German retail sales need consideration before the European opening bell. An unexpected fall in retail sales may raise bets on a prolonged German recession.<\/p>\n However, the Eurozone economy will also be in focus. GDP numbers for Q3 and October inflation figures will draw investor interest.<\/p>\n After market-friendly numbers from Germany on Monday, similar trends would support the appetite for DAX-listed stocks. Economists forecast the Eurozone economy to expand by 0.1% in Q3 vs. a 0.4% contraction in Q2.<\/p>\n However, economists forecast the Eurozone\u2019s core annual inflation rate to soften from 4.5% to 4.2%. Softer inflation and better-than-expected GDP numbers would support riskier assets.<\/p>\n Away from the economic calendar, corporate earnings also need consideration. BASF is among the big names to release earnings results.<\/p>\n Earlier in the day, PMI numbers from China could set the tone. The NBS Manufacturing PMI fell from 50.2 to 49.5, with the Non-Manufacturing PMI down from 51.7 to 50.6.<\/p>\n On Tuesday, US consumer confidence will be in the spotlight. A marked decline in consumer confidence would fuel bets on a slump in consumption, raising the threat of a hard landing. Economists forecast the CB Consumer Confidence Index to fall from 103 to 100. A drop below 100 would impact the appetite for riskier assets.<\/p>\n Employment costs for the third quarter also need consideration. An unexpected spike in employment costs could fuel demand-driven inflation, supporting a more hawkish Fed rate path. A more hawkish Fed rate path would weigh on riskier assets.<\/p>\n Other stats include house price figures and the Chicago PMI, which will likely play second fiddle to the key stats.<\/p>\n Beyond the economic calendar<\/a>, the US earnings calendar<\/a> will also move the dial. Pfizer Inc. and Caterpillar Inc. are among the big names releasing earnings on Tuesday.<\/p>\n The futures markets point to a mixed start to the Tuesday session. The DAX was up 23 points while the Nasdaq mini was down 52 points.<\/p>\n Eurozone GDP and inflation figures will be pivotal for the DAX ahead of the Fed interest rate decision. Better-than-expected GDP numbers and softer inflation figures could provide market relief. However, any cracks in the US economy could test the appetite for DAX-listed stocks.<\/p>\nThe Monday Market Movers<\/h2>\n
Eurozone GDP and Inflation in the Spotlight<\/h2>\n
US Consumer Confidence and Employment Costs in Focus<\/h2>\n
Short-Term Forecast<\/h2>\n
DAX Technical Indicators<\/h2>\n
Daily Chart<\/h3>\n