“A certain crisis familiarization effect has set in on the stock exchanges,” says Robert Halver, Head of Capital Market Analysis at Baader Bank. This applies above all with a view to further escalation levels by the Kremlin boss Wladimir Putin in the Ukraine war, such as the annexation of the Russian-occupied areas of eastern Ukraine and the partial mobilization of Russian armed forces. These measures would be interpreted more as an act of desperation by Kremlin chief Vladimir Putin.
The record-high inflation rates in Europe and the USA, on the other hand, have recently caused stockbrokers greater concern. These are putting pressure on central banks around the world and putting pressure on share prices.
When looking at the course of the DAX in recent months, optimism is difficult. The recovery rally after the Corona crash had lifted the stock market barometer to a record high of a good 16,290 points in November, but so far this year there has been great sadness on the stock market. The leading index recorded a minus of a good five percent on Friday for the third quarter in a row.
Since the beginning of January, the DAX has lost almost 24 percent. The biggest turning point for the stock market this year was Russia’s invasion of Ukraine, which began on February 24. In addition to the human suffering, the economic consequences of this are gradually becoming more and more visible and noticeable: According to the analyst Volker Sack from the Landesbank NordLB, in addition to disrupted supply chains, energy prices have skyrocketed in the course of the sanctions against Russia, which are associated with a considerable dynamic of inflation accompanied. This means that the situation on the stock market remains tense even after seven months of the Ukraine war.
Investors are currently primarily concerned with the historically high level of inflation, which is also a consequence of corona restrictions and the associated delivery bottlenecks. Because sharply rising prices are considered an alarm signal for economic development and call on the central banks, which have to counteract this with significant interest rate hikes.
The US Federal Reserve has been particularly aggressive so far and has already made it clear that in the fight against inflation it will also accept growing unemployment and a slight recession – which is not good news for Europe as an important trading partner of the USA . After much hesitation, the European Central Bank has meanwhile initiated a turnaround in interest rates in order to restore price stability. However, rising interest rates can slow down the economy because they make consumer credit more expensive and inhibit corporate investment. In addition, equities are becoming less attractive compared to fixed-income securities.
Nevertheless, analysts such as Frank Wohlgemuth from the Essen National Bank expect moderately rising share prices over the next few months. Because unlike in earlier times of crisis, many companies are currently in a much better state in terms of liquidity and debt, so that, according to the expert, they should be able to navigate the current energy crisis reasonably well. In particular, the soaring gas and electricity prices are causing headaches for the company leaders. It is difficult or almost impossible to pass these costs on to customers, who are themselves suffering from high inflation.
From the point of view of the optimists, things can hardly get any worse on the stock market after the month-long slide. “A lot of recession worries or loss of profits are already priced into the current DAX levels,” says analyst Sven Streibel from DZ Bank. In addition, the stock market lives on expectations. These are currently very bad and this in turn offers potential for positive surprises, for example from the company or economic side, which could then drive prices.
Streibel and also the expert Markus Reinwand from the Landesbank Hessen-Thüringen trust the DAX to be able to crawl towards 14,000 points by the end of the year. Compared to the current status, that would be an increase of almost 16 percent. At first, however, the interest rate fears persisted, Baader Bank expert Halver dampened excessive hopes: “Since around 85 percent of the global central banks are now in monetary tightening mode, a sustained recovery in the stock markets is being hampered.”/la/jsl/zb/ hey
— By Lutz Alexander, dpa-AFX —
FRANKFURT (dpa-AFX)
Image sources: Julian Mezger for Finanzen Verlag, KenDrysdale / Shutterstock.com