Germany's DAX 30 Index: German Stocks jump for a fourth day, longest winning streak since February

• DAX jumps for a fourth day.
• German stocks hopes for vaccine and economy recovery.
• Fresenius rises after Morgan Stanly upgrade.

The DAX is extending its winning streak. It rises for the fourth day in a row, even though Wall Street was under a lot of pressure yesterday. But also Wall Street is rising strongly today. The Dow Jones and S&P 500 are up by more than 1.5%.

German stocks hopes for vaccine and economy recovery

Investors are betting on a rapid economic recovery despite poor economic data, as there is still hope for a corona vaccine although recent doubts about progress on the development of a Covid-19 drug by U.S. biotech company Moderna have been raised.

On Wednesday, Inovio Pharmaceuticals reported progress regarding a vaccine. The US pharmaceutical company said the treatment against Covid-19 has shown promising results in an animal study. The first human test results are expected in June. The share price jumped by more than 9%.

Although US health expert Fauci does not expect a drug against the coronavirus until 12 to 18 months from now. But with every day that passes, a vaccine is approaching, which is probably what the markets are pricing in at the moment.

The European stock markets were also able to profit from the German-French push for a 500 billion euro recovery fund, whose money the EU member states are to receive not as loans but as grants. This increased risk appetite on the equity markets, which is particularly evident in the narrowing of spreads between German and Italian bonds. The risk-on rally was also evident in the Bloomberg Barclays Emerging Markets Local Bond Index.

Meanwhile, euro-zone consumer confidence rose in May, but it remains extremely depressed. „So the pick-up in consumption now that lockdowns are being lifted is likely to be quite gradual“, said Capital Economics in a note.

DAX jumps for a fourth day

The DAX rose for the fourth day in a row. Its the longest winning streak since February. On Wednesday the German stock index gained 1.34% to 11,223.71 points. It thus closed near its daily high of 11,247 points. This is usually seen as a sign that the bulls are likely to stay in control. The next relevant resistance comes in the form of the 100-day moving average at 11,687.10 points.

The MDAX, which includes medium-sized German companies, rose by 1.16% to 24,478.88 points and the SDAX closed 1.29% up at 10,992.36 points. The TecDAX gained 1.81% and closed the trading day at 3,140.79 index points.

Fresenius rises after Morgan Stanley upgrade 

On the corporate side, the focus was on the stocks of Fresenius and Fresenius Medical Care. Both shares rose strongly after the U.S. bank Morgan Stanley expressed optimism about the outlook for the health care group. The shares were upgraded from "Equal-weight" to "Overweight". The price target for Fresenius is 48 euros. 

The shares of Infineon, Wirecard and Deutsche Bank were also favoured by investors.

MTU Aero Engines shares closed down strongly. They fell by 2.19%. Deutsche Börse and Bayer lost 1.55% and 1.40% respectively.

PMIs in focus

Tomorrow the focus will be on numerous purchasing manager indices from Europe and the United States. After the historic lows in April, economists mostly expect the sentiment indicator to recover. 

"Having reached new historical lows in April, we think the European PMIs have troughed and-consistent with the high-frequency data-we look for a notable increase in the flash readings for May," Goldman Sachs analysts wrote in a note. "We expect the Euro area composite PMI to increase by 16.6 points in May to 30.2 from its new historical low of 13.6 in April, above consensus expectations," he added
The initial U.S. Unemployment Claims and the Philly-Fed Index, both of which will be released on Thursday afternoon, are also likely to help drive price action.

German DAX 30 key technical levels

From a technical perspective, the outlook remains bullish. The technical indicators such as RSI and MACD signal rising DAX prices on a daily basis. Resistances are located at 11,340.37 (R2), 11,477 (R3) and 11,687.10 (100-day moving average). Support is found at 11,069.29 (pivot), 10,935 (S1) and 10,725.32 (20-day line).