DAX looks to PPI inflation
DAX=> The index eases back from 14450
DELL =>The stock has fallen 20% this year
BTC/USD=> The cryptocurrency falls to 16k
DAX is edging lower, paring some gains from the previous week as investors continue assessing the economic outlook. The index eases back from a 5-month high amid record-high inflation in the eurozone and after ECB President Lagarde’s warned that the central bank could raise interest rates by more than initially expected to tame inflation. Today the German producer price index, which measures inflation at factory gate level, is expected to show prices cooling slightly to 41.5%. This is still extremely high by historical levels, and highlights how much work the ECB still has to lower inflation. Rising COVID cases in China add to the downbeat mood.
|German PPI Oct MoM||Expected: 41.5% (1.4%)||Previous: 45.8%|
Where might the DAX price head to?
The DAX has rallied just shy of 20% since the start of October, hitting resistance at 14450, last week’s high. The RSI is deep in overbought territory, so buyers should proceed cautiously. A rise over 14450 is needed to create a higher high and bring 14700 the Jube high into play. A rise above here could see buyers look towards 15000. Meanwhile, sellers could look for a move below 14100, last week’s low, to bring support at 13800, the August high, into play and 13575, the September high.
Dell Q3 earnings preview
Dell reports Q3 earnings as the share price has fallen over 25% across the past year, dropping to a 52-week low in mid-October before bouncing over 20%. Global personal computer sales fell by 15% in Q3 annualized. Dell’s sales fell by 20%. Expectations are for a sharp drop in earnings and revenue in the July to September period. Dell agreed to a $1 billion settlement related to shareholder claims that they were short-changed by billions on the purchase of EMC. This still requires the court’s approval. Wall Street expects a 13.3% YoY decline in revenue in Q3 to $24.62 billion. Adjusted EPS is forecast to drop 32% YoY to $1.61.
BTC/USD selloff continues
BTC/USD booked further losses across last week and is kicking this week off on the back foot, down some 2.8% over the past 24 hours. The ongoing investigation into the collapsed FTX and its founder Sam Bankman Fried is keeping the mood cautious. The full extent of the damage is still unknown amid a trail of over a million creditors. FTX owes its 50 largest unsecured creditors over $3 billion. Developments surrounding the saga will remain in focus. Cryptocurrencies diverged from equities last week, which is becoming increasingly frequent. While equities booked gains, BTC/USD declined, as traditional markets are unaffected by the fallout from FTX. A move below $15.5k could be significant and create a lower low and bring 13.8k support into focus.
Support can be found at 15.5k (November low) and 13.8 (Jube ’19 high)
Resistance for the pair can be seen at 17.3k (last week’s high) and 20k (psychological level).