FRANKFURT (dpa-AFX) – Optimism about further falling interest rates in the USA drove the German stock market on Thursday. In addition, there was a strong automotive industry, which gave the DAX a boost. The leading index rose by 0.79 percent to 23,882.03 points and is getting increasingly closer to the round mark of 24,000 points. The stock market barometer has been consolidating under this for three weeks now.
Even if the most important indices in the USA “only” remained stable that day, they still made up for the damage they suffered at the beginning of the week. The path to the record highs reached at the end of October and November is open again. According to strategist Jürgen Molnar from the broker Robomarkets, the tailwind for Wall Street & Co continues to come “from the interest rate side”. Bad economic news is currently good for the stock markets, as the probability of one Interest rate cut will rise a little higher in the coming week, he wrote.
However, DWS chief economist Christian Scherrmann sees the US Federal Reserve in a quandary. Because of the administrative shutdown that has now ended, the available data is limited and probably distorted. At the same time, however, consumer sentiment is subdued and weaker income expectations dominate. The result is likely to be disagreement about interest rates among members of the FOMC and difficulty in providing a consistent narrative. “Fortunately, central bankers may again argue that interest rates remain restrictive and a 25 basis point cut could support the labor market without spiking inflation.”
Scherrmann expects interest rates to rise in December, but would also understand if they waited until the meeting in January. The Fed will decide on interest rate levels next Wednesday.
At the close of trading, the MDAX gained 0.92 percent to 29,597.02 points and gains were also recorded across Europe. The EuroStoxx 50 rose by 0.41 percent to 5,718.08 points. Outside the euro region, the British FTSE 100 and the Swiss SMI rose./ck/mis