Is the Dax set for gains?

The Dax is approaching a strong time of year. With a large stimulus package planned for the US, global vaccine optimism, and a reflationary narrative there is an argument for higher prices in the Dax ahead. However, one perspective against DAX gains is the relatively slow vaccination program in the Eurozone. Economic data will be key to see how the eurozone is managing.

Over the last 33 years, the DAX has gained 22 times. The Dax usually has a strong time of year between 09 March and 01 May gaining an average of +3.69%. Last year the DAX fell -1.49% during this period. The largest loss was in 2002 with a -7.04% loss.

Trade Risks:

  • A sharp rise in US 10 year yields could cause the US and global stock sell-off.
  • A spike higher in bond volatility would flag the danger of a stock sell-off in advance. Remember, this is about the speed of the bond yield rise. Too fast, and stocks will fall.