VÖB banks expect a moderate end-of-year rally in the DAX – take advantage of opportunities to expand equity positions

VÖB banks expect a moderate end-of-year rally in the DAX – take advantage of opportunities to expand equity positions

According to a report by www.boersen-zeitung.de, the analysts of the member institutes of the Federal Association of Public Banks (VÖB) expect a restrained end-of-year rally for the DAX despite economic weakness and geopolitical risks. They expect a significant recovery in the coming year. The forecasts for the end of the year for the Dax fluctuate between 15,500 and 17,000 points, although the ratings are considered moderate.

Analysts largely agree that the current weakness of the market should be used to specifically expand equity positions. The low valuations and the pricing of weak growth as well as the low points in economic expectations and investor sentiment are seen as an opportunity. The risk premiums of the Dax compared to federal bonds are considered to be above average.

Manfred Bucher from BayernLB is somewhat more skeptical and sees the weak global economy and the monetary conditions as having a negative impact on the stock market. Nevertheless, he expects price setbacks to be limited, as the stock markets have already priced in some of the negatives. Joachim Schallmayer from DekaBank is also cautiously optimistic and predicts moderate upward movements in shares.

Berndt Fernow from Landesbank Baden-Württemberg expects the DAX to rise at the end of the year and in the coming year and emphasizes the importance of a cautious approach due to investors' small profit margins. Despite the cautiously optimistic view, he points out that global conflicts still pose risks.

With regard to economic expectations, the VÖB member institutes are assuming a recession in Germany in the coming year, but expect a return to restrained economic growth in 2024. Expectations for American economic growth in the coming year are between 0.5 and 1.5%.

Given these forecasts, there could be an increase in buying interest or a cautious attitude from investors in the stock market based on their respective risk aversion and willingness to benefit from low valuations. Despite the uncertainties and risks, financial experts remain cautiously optimistic about the long-term prospects of the stock market.