In addition to geopolitical risks, monetary policy uncertainties were the main cause of concern for investors this trading week. The Middle East conflict between Iran and Israel remains a serious risk factor. Meanwhile, hopes of interest rate cuts in the USA in the near future are likely to have given way to a more sober approach in view of hawkish comments by Jerome Powell.
The DAX 40 initially fell sharply by 0.90 percent to 17,681 on Friday morning. The Dow Jones Industrial Average Index closed 0.1 percent higher at 37,775 units on Thursday evening. While the Nasdaq fell by half a percent to 15,601 points, the S&P 500 lost 0.2 percent to 5,011 points.
DAX 40 Chart
Source: Tradingview
US data stronger than expected - China GDP fuels hopes for global economic recovery
In the first half of the week, stronger-than-expected US retail sales data underpinned the robustness of the US economy. China's gross domestic product (GDP) also developed better than expected in the first quarter of the new year, which can also be seen as a sign of recovery for the global economy.
The ZEW index on Tuesday also signaled confidence in economic development for both the eurozone and the Federal Republic of Germany.
However, Jerome Powell caught investors on the wrong foot by dampening rate cut fantasies. "The recent data clearly have not given us greater confidence, but instead suggest that it will likely take longer than expected to achieve that confidence," Powell said during an event at the Wilson Center in Washington.
EU inflation falls as expected - ECB interest rate cuts remain alive
On Wednesday, however, new figures on EU inflation trends underpinned hopes of interest rate cuts in Germany in June, which at 2.9 percent in March were as high as expected and thus significantly lower than the previous month's figure (3.1 percent).
US media report on military operation by Israel in Iran
According to US media reports, Israel is said to have carried out a military operation against Iran during the night from Thursday to Friday. The geopolitical risks had already flared up again last Saturday after Iran launched a drone and missile offensive against Israel.
In principle, geopolitical risks always have the potential to catch investors on the wrong foot. However, the legs of geopolitical stock markets could once again be shorter than expected. Only in the event of a total escalation of the conflict is there an obvious threat of greater potential negative impact.
Mixed results for the reporting season - Sartorius shares under pressure
In the reporting season, the figures from Goldman Sachs were convincing at the start of the week. There were also positive surprises in the ranks of Morgan Stanley. However, declining interest income weighed on Bank of America's business.
The Sartorius share price plummeted on Thursday after the publication of the figures. According to the report, the Group is struggling with persistently weak demand from China.
