Overview
It was a bearish Tuesday for the DAX. Reversing a 0.46% gain from Monday, the DAX fell by 0.86% to end the day at 15,767.
Economic indicators from China set the mood. Industrial production increased 3.7% year-over-year in July versus 4.4% in June, with retail sales up 2.5% versus 3.1% in June. Economists forecast increases of 4.5% and 4.8%, respectively.
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Other indicators were also bearish. The unemployment rate increased from 5.2% to 5.3%, with fixed asset investments rising by 3.4% versus 3.8% in June. Economists forecast fixed asset investments to be up 3.8%.
The PBoC responded to the stats by cutting key policy rates unexpectedly to boost growth. However, the move was not enough to prevent a DAX reversal. Investors expect more aggressive support from Beijing to deliver a reversal of economic fortunes.
Late in the European session, US retail sales figures supported the soft-landing theory but also reignited fears of a September Fed rate hike.
The S&P 500 fell by 1.16% on Tuesday. It was also a bearish session for the Dow and the NASDAQ Composite, which saw losses of 1.02% and 1.14%, respectively. Fed rate hike jitters left the indexes in negative territory.
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