Well below 13,700 points: The DAX is expected to be weaker

On the stock market, prices are likely to drop slightly at the start of trading. The weekly balance of the DAX could therefore be negative.

According to calculations by banks and brokers, the indications on the DAX in early trading before the start of the electronic trading system Xetra are in the range of 13,645 points and thus 0.4 percent lower than yesterday. The meanwhile mixed weekly balance would be clouded even further: So far, the leading German index has lost 0.7 percent in the past few days.

Patchy development in New York

US stock markets lacked a clear direction in yesterday’s trading. The Dow Jones closed 0.1 percent higher at 33,999 points, just below the much-noticed 34,000 point mark. The broad S&P 500 gained 0.2 percent to 4283 points. The Nasdaq composite index advanced 0.2 percent to 12,965 points.

Cisco on top

From a corporate perspective, shares of Cisco took the spotlight as the Dow Jones’ top performer, jumping 5.8 percent. The network supplier performed better than expected in the past quarter thanks to easing problems with the chip supply and gave a positive sales forecast for the current quarter. Analysts of large investment houses then increased the price targets for the Cisco papers.

Bad news from the retail industry

Kohl’s shares fell after the retailer lowered its full-year sales and earnings guidance. The papers slipped by almost eight percent. Competitor Target had already reported a disappointing business development yesterday.

Economic data fizzle out

Fresh US economic data had little impact on prices. Existing home sales fell more than expected in July. The leading indicators fell slightly less than forecast in July. Even before the start of the stock exchange, it had been announced that the business climate in the US region of Philadelphia had brightened up surprisingly in August. The number of initial jobless claims fell in the previous week, while analysts on average had expected a clear increase.

Rise before the next low?

After the race to catch up in the past few weeks, the stock exchanges are running out of breath, traders said. “We’ve had big gains, the market is digesting that at this point. Right now we’re in a holding pattern and some people are worried we’ll see another bottom,” said Joe Saluzzi, senior manager of trading at broker Themis Trading.

“The recent rally has clearly been driven by a combination of better than feared economic data and earnings,” said Art Hogan, chief markets strategist at wealth manager B. Riley Wealth. Since mid-June, the S&P 500 is up 17 percent, helped by positive results from American companies. At the same time, the Nasdaq gained 22 percent.

Euro still under pressure

On the currency market, the euro is quite weak on the last trading day of the week. The shared currency fell as low as $1.0070 against the US dollar. The inflation outlook has not improved since the July meeting, central bank governor Isabel Schnabel told Reuters news agency.

With the German government’s decision to reduce VAT on gas, economists forecast that the inflation rate, currently at 7.5 percent, will not rise above the ten percent mark, as previously feared.

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