DAX ups and downs: Investors tremble after weak economic data!

DAX ups and downs: Investors tremble after weak economic data!

market report

As of: November 22, 2024 4:28 p.m

The stock market is a real rollercoaster of emotions! The DAX, which rose by around one percent to over 19,300 points in the afternoon, has had a wild roller coaster ride. Following weak economic data from Europe, the index initially fell to 19,036 points before recovering with a tailwind from Wall Street. Investors have a lot to be prepared for in this volatile phase!

The latest economic data is alarming: the purchasing managers' index shows that the euro zone is on course for recession in November, as the overall indicator fell below the critical mark of 50 points. The service sector is particularly affected, which worries experts like Cyrus de la Rubia, chief economist at Hamburg Commercial Bank. “It could hardly have been much worse,” he warns, pointing to the political uncertainty in Germany and France and the election of Donald Trump as US President.

Weak prospects and interest rate hopes

The gloomy economic outlook is putting pressure on the banks in the DAX, which are at the bottom of the index. The likelihood of higher loan provisions weighs on profit forecasts. But not all is lost: the weak economic data has also fueled hopes of interest rate cuts, which could give the markets a new boost. Analysts stress that the European Central Bank (ECB) could cut interest rates further to support the economy.

While the US indices build on their previous day's gains and the Dow Jones rose by almost 0.7 percent, the euro appeared weak and fell to $ 1.0339 - the lowest level since the end of 2022. Investors are betting on a possible increase in inflation due to the policies of the new US President Trump, which will strengthen the dollar. The Bitcoin price also continues to climb and is approaching the $100,000 mark, fueling hopes of an easing of cryptocurrency regulations.