DAX reaches record high – experts warn of impending risks!

DAX reaches record high – experts warn of impending risks!

The German stock index (DAX) recently hit a new record high, despite continued warnings from economists about the risks associated with this rise. Robert Halver from Baader Bank expressed optimism about the German stock market and made a clear comparison to American indices. Particularly noteworthy is Halver's view that Donald Trump is capable of learning and that the announced tariffs, which represent great uncertainty for investors, will not be as severe as initially feared. He also highlights that there is a revival of the goods cycle worldwide.

However, Halver emphasizes that it is important to separate economic policy from the stock markets. In an interview with Manuel Koch at the Frankfurt Stock Exchange, he expressed his concerns that necessary economic changes are not being adequately addressed by politicians like Merz. These critical voices come at a time when the stock markets are in the red three times in a row following interest rate increases in the USA and the corresponding reactions on the international financial market.

Worries about trade conflicts

On Monday, the DAX fell by 10 percent right at the start of trading, after it had already lost a lot of value in the previous days due to tariff announcements from Trump. According to reports from the South German newspaper The decline was temporarily 21 percent since the peak at the beginning of March. The 40 largest German stock corporations have now lost over a fifth of their value. At the end of the trading day, the DAX closed with a loss of 4.3 percent and the Japanese stock exchange also fell by eight percent, a sign of the growing uncertainty among international investors.

Investors are worried that an ongoing trade war will raise inflation and trigger a global recession. Trump has currently announced tariffs of 20 percent for the EU, 34 percent for China and up to 50 percent for other Asian countries, which has already led to counter-tariffs from China.

All about economic development

Manfred Schlumberger from Fürstlich Castell’schen Bank emphasizes that there is currently no institution that can counter market movements. Jerome Powell, the head of the US Federal Reserve, indicated that he would like to wait and see developments. In addition, many countries are not prepared to compensate for the damage resulting from punitive tariffs. Investors currently see no signs of prices stabilizing, which increases concerns about the economic situation.

In addition, experts warn that a trade war could increase the likelihood of a recession in Germany. The German economy already shrank by 0.3 percent in 2023 and it is forecast that it will decline by a further 0.2 percent in 2024. Government spokesman Steffen Hebestreit has announced that Chancellor Olaf Scholz is closely monitoring developments on the financial markets. A possible way out could be a temporary suspension of tariffs by Trump, but it is already known that these tariff revenues are firmly planned into the national budget. During this turbulent time, the EU is also offering the USA an agreement to mutually eliminate all tariffs on industrial goods.