After yesterday's record high, the DAX lacked momentum at the end of the week. In view of yesterday's record high, profit-taking is a constant temptation, while on the other side nobody wants to miss out on a possible continuation of the rally. Investors on both sides of the Atlantic are currently torn between hopes of new highs and growing concerns about an overdue consolidation.
DAX
Carelessness on the stock markets should prompt caution - Between AI hype and concerns about US government debt
The current marked lack of concern is likely to be a constant reminder to exercise caution. Greed for the next AI winner often overshadows the sober assessment of the fundamental data. In addition, structural risks are increasingly casting their shadows. The historic US national debt and the associated interest burden are beginning to erode confidence in fiscal stability.
Whether the current lethargy is just the calm before the next price rally or a warning signal for a correction remains to be seen.
France worries quickly fade into the background - German industry weakens
From a political perspective, events in France came thick and fast at the beginning of the week. Prime Minister Sebastien Lecornu surprisingly resigned on Monday after just four weeks in office. Overall, however, the stock markets' political legs were extremely short. Although the situation could remain politically volatile, it may be predictable in economic terms.
In August, German industrial production slumped more sharply than at any time since the outbreak of the war in Ukraine (March 2022). The automotive industry recorded a drop of 18.5%. The industry, construction and energy supply sectors together produced 4.3% less than in the previous month, according to the Federal Statistical Office.
Fed minutes provide no clear impetus - interest rate cuts possible later in the year
The „FOMC Minutes“ published late on Wednesday evening brought the realization that ideas about the policy course diverge. „Some participants stated that it made sense to leave the policy rate unchanged at this meeting, or that they could have supported such a decision,“ the transcripts said. The new Fed Director Stephen Miran, who is considered a close confidant of Donald Trump, argued for a rate hike of 50 basis points.
According to the report, most members were of the opinion that a further easing of monetary policy would probably be appropriate in the current year.
On Thursday, the President of the San Francisco Federal Reserve, Mary Daly, said that a weakening job market and declining inflation were the reasons for last month's interest rate decision.
„The rate cut we made - and we predicted that we could make more - was for risk management purposes,“ says Daly.
Last but not least, investors can look forward to the preliminary consumer sentiment data from the University of Michigan at the end of the week (16:00).
Dow Jones Industrial Average Index
