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News from the editorial

  • Klaus Meitinger

No fear of record share prices.

(Reading time: 2 - 4 minutes)
The ifo Business Climate Index for May continues to point upwards in industry, which is so important for the private wealth stock market indicator. The index for business expectations in the manufacturing sector improved from minus 8.3 points to just minus 5.7. On balance, the number of company bosses who expect a more favourable business trend is now roughly equal to the number of those who anticipate a less favourable trend over the next six months. This underpins the positive assessment of the private wealth stock market indicator for the German stock market, which has been valid since October. In October 2023, the stock market indicator gave a buy signal when the DAX fell below 15,000 points. The equity allocation was initially raised...

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  • Klaus Meitinger

Economic recovery ‘on track’.

(Reading time: 3 - 5 minutes)
We wrote here a month ago that the German economy should have bottomed out in February. The ifo Business Climate Index data for April supports this assessment. Sentiment among companies continued to improve last month, and the stabilisation process of the economy is still proceeding according to the textbook. This can be seen most clearly in the ifo Business Cycle Clock. The German economy is still in the crisis quadrant. However, in April the indicator made a big leap towards the recovery quadrant (Chart 1). The improvement in industry, which is so important for the private wealth stock market indicator, is particularly impressive. The index for business expectations in the manufacturing sector made a big leap upwards (chart 2). In the...

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  • Klaus Meitinger

Germany is turning the corner.

(Reading time: 3 - 6 minutes)
You will probably be startled by the headline "Germany in recession" in the next few days. This is because there is indeed a high probability that the German economy will have contracted slightly in the first quarter of 2024. The official definition of a recession - two negative quarters of GDP in a row - would then be fulfilled. Don't be confused. That is the past. The economic low point should have been reached in February. This is indicated by the business climate survey conducted by the Munich-based ifo Institute. The mood among companies improved considerably in March. The current situation is now viewed more favourably than in the previous month. Above all, however, company bosses' expectations for the next six months were significantly...

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  • Klaus Meitinger

Industrial economy may have bottomed out - continue to invest in equities.

(Reading time: 3 - 5 minutes)
The stabilisation process of the German economy is almost textbook. According to the ifo Business Climate Index, the situation has deteriorated continuously since mid-2022 and has now reached a level in February 2024 where positive and negative reports from the boardrooms roughly balance each other out. That looks like zero growth. Will it stay that way in 2024? Will the economy improve in future? Or will it continue to deteriorate? The business expectations for the next six months provide an insight into this. Although these are still pessimistic, the degree of scepticism is slowly decreasing. The ifo therefore writes that the economy is stabilising at a low level. In our view, there is even justified hope that this could result in a slight...

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  • Klaus Meitinger

Stabilisation phase in industry.

(Reading time: 2 - 3 minutes)
At the end of 2023, the mood in the German economy had deteriorated again according to the ifo Business Climate Index. At first glance, this negative trend continued in January. The business climate index continued to fall and expectations in the economy as a whole were more pessimistic. The ifo Institute concludes that the German economy is stuck in recession. Nevertheless, there is hope for equity investors. The deterioration in the climate is due to significant setbacks in the service sector, in trade and above all in the construction industry. In industry, on the other hand, both the business situation and the business expectations, which are decisive for the private wealth stock market indicator, have improved again following the decline...

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