The RoboMarkets Weekly Review and Outlook – DAX With New High for the Year

Even on the stock market, there are instances when you just hear what you want to hear. At least, this is the sense one gets from seeing how the stock market responded to the US Federal Reserve and the European Central Bank raising interest rates. The interest rate-sensitive US technology companies in particular are thought to have gotten a boost from Jerome Powell's remarks that were a little less "hawkish" following the 25 basis point rate rise.

The next day, ECB president Lagarde also makes it clear that her 50 basis point rate rise was not the last, and most likely not the final either. Only the markets don't think she's real. Despite all the protestations, they believe that interest rates will be reduced in the second part of the year as long as inflation rates continue to decline. Investors were not significantly alarmed by the more than 500,000 new jobs added to the US labor market in January.

Bears continue to flee as a result of bulls

As a result, the bears, who have been in pain since October, must relinquish control of the DAX after a brief battle to achieve the previous year's high of 15,270 points. It is sufficient if a US central bank does not alter its path, but investors start to want to hear slightly softer tones from the Fed head and start buying shares if the skepticism about the present stock market advance is still so strong. The brief crush that follows pushes the others in front of them, and the image we've been seeing all week begins to take shape. Euphoric bulls continue to outperform the bears, as if Powell and Lagarde had announced interest rate reductions.