Dow Jones & DAX 30 Forecasts for the Week Ahead

Dow Jones & DAX 30 Forecasts: Neutral

• The Dow Jones make struggle to keep pace with the Nasdaq 100 as value stocks lose their shine
• The DAX 30 awaits data that will offer useful insight into the German economy
• Stock Market Forecast for the Week Ahead: The Summer Doldrums Approach

Dow Jones Forecast for the Week Ahead

The Dow Jones has forfeited its leadership position among the US indices as value stocks lose their shine amid slipping US Treasury yields. Rising yields had proved troublesome for technology stocks with stretched valuations, but the pendulum has since swung back in favor of the tech sector which may leave the Dow Jones in a comparatively weak position – a theme already evidenced by its price chart.

Dow Jones Daily Price Chart: Daily Time Frame (January 2020 – June 2021)

While the broader backdrop for equities is encouraging, the Dow Jones appears to be the weakest of the three US indices and could struggle to push higher with added concerns from seasonal trends. That said, the Industrial Average and other indices will likely derive volatility from the coming non-farm payroll report due Friday.

Source: DailyFX economic calendar

Not only should the release spark price action, but it could also provide insight on the taper talk debate that is currently unfolding within the Fed and broader market participant pool. In the meantime, the Dow Jones may await further direction.

DAX 30 Forecast for the Week Ahead

DAX 30 traders will await similar data in the form of German unemployment figures and Euro Area inflation readings. Both data points are vital to the monetary policy discussion in the region and surprises in either direction could shake up price action. With a rather quiet week otherwise, the DAX 30 will likely take its lead from the Nasdaq 100, Dow Jones and S&P 500.

Source: DailyFX economic calendar

--Written by Peter Hanks, Strategist for DailyFX.com