FRANKFURT (Dow Jones) – What ’s going on on the German stock market? In recent days, a disturbing pattern has emerged .
Despite good , some even excellent company figures , the DAX of the outbreak to the top is not so far succeeded. An outbreak in the coming week is also not in sight.
Although lay with Metro, Linde , German Post or BMW still some heavyweights their quarterly reports. But for most investors, the reporting season is already over. For after some 300 companies in the S & P 500 universe have submitted their figures , the general trend is clear , with high expectations are met and in many cases even exceeded.
And still remain , the stock markets in their continuing sideways movement for months . The reason , of course, the uncertain economic outlook for the global economy. In addition to the R- word ( recession) makes more and more , the D- word ( deflation) the round. James Bullard, president of the Federal Reserve of St. Louis warns , before Japanese relations and calls for the increased use of the printing press .
Deflation would be the nightmare of every banker that can hardly imagine anything worse than falling prices in a world suffering under the debt of the excesses of recent decades. In order to reduce the debt burden is needed , ideally one thing , namely, growth.
But here, ring the alarm bells: Because, it points out the strategist Jim Reid of Deutsche Bank , the economic recovery in the U.S. is one of the weakest since the Second World War. According to the attention of investors will therefore follow the announcement of the ISM index on Monday and Wednesday.
While it is expected in both cases is that these have moved in July, still comfortably above the expansion threshold of 50. However, it is unlikely that this will reassure investors can , given the fact that about a lot of attention again recently ECRI leading indicator fell to recession level .
The biggest problem child remains the ailing U.S. labor market. Keep the pundits are right, the unemployment rate in July rose slightly to 9.6 %. If the data are released next Friday , but investors will first pay attention to the development of employment in the private sector. Analysts expect this to rise by 110,000 jobs .
In addition to the U.S. might in the coming weeks and ensuring the data from China for movement. It is still unclear whether it will succeed in the local government to generate a soft landing. A reference to it will provide the purchasing managers’ indices announced for Sunday .
this , as feared by some economists should actually fall under the threshold of 50 Affliction threatens the financial markets , which would also export the high expectations of the German economy put a damper.
As always turn out the data in the coming days will be clear is that they question whether the world will once again slip into recession or not, can not be answered . Optimists still hope that will turn out in 2010 as a repeat of 2004. Even then, the mood was marked by cyclical uncertainty , which ultimately dissolved positive upwards.
Whether history repeats itself , or keep the pessimists are right, we will know only in a few months . In the meantime, the uncertainty in the equity markets will remain high and thus the probability that the DAX will continue to move in its broad trading range 5700-6300 points.
DJG / mpt / hru / cln / voi
