It should come as no surprise that German stocks are under pressure on Friday.
On Thursday afternoon we politely suggested (because we’re nothing if not polite) that it was worth watching the DAX, as it had fallen below its 50-day moving average:
Well this morning, Deutsche Bank is exacerbating an already shaky situation, as the bank falls the most six months after disappointing investors (again). This is weighing on the DAX which is down for a fifth straight day.
This is worst weekly drop since November of 2016:
And it means that the DAX has now wiped out its entire 2018 gain which at one point stood at more than 5%:
If you think of the DAX as the bellwether for the rest of Europe, well then watch out. Also, continued euro strength or anything that causes the ECB to turn more hawkish won’t help this situation.