German industry has digested the tariff shock. Current data from the ifo Business Climate Index for June show that the economic stabilisation process is underway and the economy is on a moderate recovery path. This also improves the outlook for the German stock market. This is particularly impressive when illustrated by the ifo Business Cycle Clock (Chart 1). The clock visualises the classic course of an economic cycle in the interplay between the business situation and business expectations. Expectations generally precede the situation. In the crisis quadrant, expectations initially improve, but the situation remains difficult. Once the economy reaches the recovery quadrant, expectations continue to rise. But now the business situation,...

On Monday, the capital market seismograph remained unimpressed despite the three-day sell-off on the stock markets. "The seismograph was not in panic mode. The start of a real, fundamental crisis that would lead to a bear market could not be deduced from the input factors at the time," recalls Oliver Schlick, who calculates the model every four days. Now that has changed. "All input factors have deteriorated further in the past few days. The increase in volatility was particularly extreme. From Thursday last week to Wednesday this week, we experienced five days on which the trading range of the S&P 500 was above five per cent - in some cases even significantly higher. This has only happened very rarely - for example in 1987 and 2008,‘...

As the economic component of the private wealth stock market indicator reacts very slowly - the data on ifo business expectations is only collected once a month - we rely on the capital market seismograph, which is calculated every four days by Oliver Schlick, Secaro, when the stock market weather situation changes between these dates. At the end of March, we wrote: ‘At the beginning of April, it will become clear how Donald Trump's ’reciprocal" tariffs are actually organised. We hope that the seismograph will put us in a position to react promptly if the worst comes to the worst." We have therefore been monitoring the development of the seismograph very closely over the past few days. What is remarkable is that despite the three-day sell-off...

A month ago, we pointed out a probable economic turnaround in Germany and a positive stock market reaction to the general election. We wrote at the time: ‘It is now clear that a CDU/CSU/SPD coalition is the most likely option for the new government. Together they can be trusted to achieve an economic turnaround, which both parties have already achieved once before - in 1982/83 and 2003 - under their sole leadership. In this political constellation, a reform of the debt brake also seems very likely. If done correctly, it could trigger the urgently needed boost in investment with corresponding multiplier effects. We therefore believe it is very likely that business expectations in the industry will continue to improve in the coming month.’That's...

The ifo business climate for February showed the improvement that we had expected last month. Four weeks ago, we pointed out that Germany had already achieved an economic turnaround twice - in 1982/83 under a CDU/CSU-led government and in 2003 under the leadership of the SPD. Why, we asked then, should it not succeed again? In the meantime, some economic leaders have apparently come to the same conclusion. The index of business expectations in industry, which is so important for the private wealth stock market indicator, improved significantly from minus 24.9 points to minus 18.7 points. This is an important first step. Three improvements in a row are considered a turnaround in the German industrial economy. This would also turn the economic...