European Equity Analysis and NewsDAX The outlook for the DAX is somewhat fragile with the index trading at its lowest level in 5 months after last week’s breach through the July lows. Eyes will be on for a weekly close below the 12000, which could see the index make a test for the rising trendline support from the 2016 low. A break through the trendline opens the door for a move to 11800. However, the DAX may be offered some slight reprieve with the RSI indicator moving closer to the oversold area, suggesting there is scope for a possible retracement of the recent losses.

Global equities have held up fairly well in light of the generally negative news flow, entirely driven by the United States, where stocks are up 9.6% year to date, while the euro area, Japan and emerging markets have underperformed. Broader style and sector leadership remains intact with cyclicals and growth outperforming defensives and value. In this context, the Research team from AXA IM points that earnings momentum remains “robust” with the second quarter earnings season posting “positive growth” and “surprising” on the upside across most major regions.