In a continuous climb, the Dax interest rate has set yet another record-breaking high.
Investors were caught off-guard by fresh consumer price data, making it highly probable that the Fed will implement additional interest rate cuts. This surge in buying activity has been evident on trading floors worldwide, with major exchanges like Frankfurt's DAX reaching new record highs. The DAX reached 20,630 points, while the MDax and EuroStoxx 50 also saw impressive gains.
Bond yields fell, and favorable bank financials provided additional support for stock prices. Sector leaders in real estate, such as Vonovia, LEG, and Aroundtown, saw significant increases in value. Meanwhile, US banks, including JP Morgan, Goldman Sachs, Citigroup, and Wells Fargo, reported favorable earnings, spurring further positive market sentiment.
Market participant reactions to Bayer's stock recovery were noteworthy, with the company gaining 5.8% as Goldman Sachs reduced its risk assessment of Bayer facing further lawsuits over Monsanto products. The stock market's turbulence was exemplified by the BVB's 6.2% fall, making it the biggest loser in the SDAX, despite the club’s decision to keep its coach.
The overall trend of global stock markets shows mixed performance, driven by concerns about inflation and the Fed’s interest rate decisions. Despite solid corporate earnings and declining oil prices, analysts predict moderate market growth in 2025, balancing concerns about fiscal and monetary policy, valuation, and potential inflationary pressures. However, now that the Fed seems more inclined to lower interest rates, 2025's market outlook might experience a shift in favor of investors.
Investors monitoring Wall Street's movements would be interested to know that US banks, including JP Morgan, Goldman Sachs, Citigroup, and Wells Fargo, reported favorable earnings. The volatile stock market, as evident on Wall Street, could potentially see a positive shift in 2025's outlook with the Fed's increasing inclination towards lower interest rates.
