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DAX ups and downs: Investors tremble after weak economic data!
The market report from November 22, 2024 analyzes the volatile DAX development and the effects of weak economic data on investor sentiment.
DAX ups and downs: Investors tremble after weak economic data!
The stock market is in turmoil! The DAX, the leading German index, is extremely changeable today and changes sign several times. After weak economic data from Europe, the index temporarily fell to 19,036 points before recovering with a strong upswing to over 19,300 points. Investors need to be prepared for a roller coaster ride as the mood is tense and uncertainty is high.
The cause of the sudden mood swings? Fresh economic data signaling an alarming decline in economic activity in the Eurozone. The Purchasing Managers' Index fell below the critical mark of 50 points, indicating an impending recession. The service sector is particularly concerned. “It could hardly have been much worse,” warns Cyrus de la Rubia, chief economist at Hamburg Commercial Bank. Political uncertainties in Germany and France as well as the election of Donald Trump as US President are increasing investor concerns.
Market reactions and interest rate hopes
Despite the bleak outlook, there is a silver lining: weak economic data is fueling hopes that the European Central Bank (ECB) will cut interest rates, giving markets a boost. Analysts expect the ECB to cut interest rates further to support the economy. While banks in the DAX are under pressure, real estate stocks are benefiting from the prospect of lower borrowing costs. Vonovia and other real estate stocks are increasing while uncertainty about economic developments continues to fray investors' nerves.
The weakening euro is causing excitement on the foreign exchange market: the exchange rate fell to $ 1.0339, its lowest level since the end of 2022. Investors are worried about geopolitical tensions and the economic prospects of the euro zone. In contrast, the dollar is showing strength as investors bet on possible inflation under the new US administration. The Bitcoin price also remains exciting and is approaching the $100,000 mark, while investors hope that the new US government will relax regulations.