Dear traders, dear stock market friends.
The DAX went into the weekend on Friday with a closing price of 23,837 points, which corresponds to a weekly gain of more than 3 % and almost neutralized the losses of the previous weak phase. After increasing uncertainty among investors in the first three weeks of November, risk appetite returned last week.
Thanksgiving rally provides positive impetus
Last week, the DAX received a tailwind primarily from the USA: in the shortened Thanksgiving week, the S&P 500 rose by around 3.7 %, the Dow Jones by 3.2 % and the technology-driven Nasdaq Composite by as much as 4.9 %.
In addition to the calendar effect, the rally was driven by
- the growing expectation that the US Federal Reserve will cut the key interest rate again at its December meeting,
- robust economic signals (including solid labor market data)
- as well as strong share price gains for AI and tech heavyweights such as Alphabet & Co.
In this environment, international investors increasingly turned to risk assets again and the DAX benefited directly from this global „risk-on“ sentiment through its export-oriented cyclicals, industrial stocks and the technology sector.
Macroeconomic environment
On the macro side, some important data was on the agenda last week: in Germany, the ifo business climate index for November, the preliminary inflation figures (CPI/HICP), the GfK consumer climate for December and new growth forecasts for 2025 were published.
At European level, sentiment indicators from the EU Commission were added, while in the USA inflation and labor market data additionally underpinned expectations of a further interest rate cut by the Fed in December. This resulted in a mixed picture for the DAX:
- Weak domestic economy and subdued sentiment indicators act as a brake.
- At the same time, the declining interest rate risk is supporting the valuation side and providing a tailwind for global risk appetite.
Economic indicators signal recessionary tendencies
The discrepancy between the financial market and the real economy was further exacerbated by the publication of the ifo business climate index last Monday. The index, which is regarded as the most important leading indicator for the German economy, fell to 88.1 points in November (previous month: 88.4), contrary to expectations of a slight recovery.
The decline in the expectations component is particularly alarming. Companies in Germany see "little hope of a recovery in the near future". The reasons for this are:
- High energy costs
- Bureaucratic burdens
- Uncertainty about future US trade policy.
Gross domestic product for Germany stagnates
The overall economic picture matches this skepticism: after two years without any significant growth, Germany's gross domestic product will effectively come to a standstill in 2025. International institutions such as the IMF, leading economic research institutes and the EU Commission expect real GDP growth in Germany to average only around 0.2 % in the current year; in other words, de facto stagnation. This is too little to trigger a noticeable upturn in investment and employment, but at the same time increases the pressure to push ahead with structural reforms and the investment program that has already been agreed. While the hard economic statistics hardly signal any momentum, the first, albeit tentative, positive impetus is coming from the consumer side.
The GfK consumer climate for December showed a slight improvement to -23.2 points (from -24.1). This indicates that private households are slowly abandoning their reluctance to spend thanks to real income growth (wage increases > inflation). This is a glimmer of hope for domestic consumption, but is of secondary importance for the export-heavy DAX.
Inflation data above expectations
The preliminary inflation estimates for November published on Friday caused some discussion. According to the Federal Statistical Office, consumer prices as measured by the national consumer price index (CPI) rose again by 2.3 % compared to the same month last year and thus remained at the same level as in October.
By contrast, the increase in the EU harmonized index of consumer prices (HICP) was much stronger: Here, inflation rose from 2.3 % to 2.6 %, exceeding consensus estimates of around 2.4 %.
Although this means that inflation remains close to the ECB's target overall, the jump in the HICP reminds the markets that the central bank cannot yet definitively declare victory over inflation; a point that is causing increased nervousness in the short term, particularly in interest rate-sensitive DAX sectors such as real estate, utilities and growth stocks.
| Indikator | Value November | Value previous month | Trend | Implication for DAX |
| CPI Inflation (YoY) | 2,3 % | 2,3 % | Neutral | Stabilizing |
| HICP Inflation (YoY) | 2,6 % | 2,3 % | Rising | Negative (interest rate fear) |
| Ifo Business Climate | 88,1 | 88,4 | Falling | Negative (economic cycle) |
| GfK Consumer Climate | -23,2 | -24,1 | Slightly rising | Neutral (domestic market) |
| GDP forecast 2025 | 0,2 % | - | Stagnation | Irrelevant for global players |
DAX defends 23,000-point mark
However, the long-term chart of the DAX has not changed very much. The index is still trading in the sideways range it has been in since June. It was important last week that the support at the round 23,000-point mark, including the daily EMA 200 (red), was defended.
Will we see another year-end rally?
After the recent rally of the last few days, hopes of a year-end rally have risen again. Statistically speaking, the chances of a friendly end to the year are good:
- Hit rate: In 71 % to 76 % of the years (depending on the period under review), the DAX closed December with a gain.
- Average yield: The average profit in December is 2-3 %.
- Santa Claus Rally: An analysis over 44 years shows that the period from December 15 to January 2 is statistically the strongest. In this time frame, the "win rate" is over 72 %, with an annualized return of around 2%.
Author Tobias Schmid
Date: 01.12.2025
