Key Insights into the Shift in Sentiment
- Shift from Pessimism to Optimism: The latest survey documents a remarkable change from a more cautious or bearish stance to a more optimistic, bullish mood among investors. The Frankfurt Stock Exchange Sentiment Index among private investors has risen from 0 to +20, with about 10 percent of respondents directly shifting from the bear camp to the bull camp.
- Broad Participation in the Shift: This optimism is evident among both private investors and institutional investors alike. There is no significant sentiment gap between these groups, although institutional investors are somewhat more neutral in their outlook.
- Market Reaction and Price Development: In parallel with the improved sentiment, the DAX impressively recovered from its lows and was recently trading in the plus. However, the upward trend remains volatile: profit-taking is likely to provide headwinds, particularly in the area around 24,050 to 24,100 points.
Influencing Factors and Outlook
- Profit Buffers as a Basis for Optimism: Many investors have profit buffers from previous price increases, which has apparently made it easier for them to increase their positions or enter new engagements.
- Risks Remain: Despite the positive sentiment, significant risks persist, such as geopolitical tensions (e.g., Middle East conflict) and trade conflicts (tariff disputes). Nevertheless, many investors are relatively unfazed and are broadly investing in stocks.
- Homegrown Upswing Without Strong International Capital Inflows: The current upward momentum is mainly driven by domestic demand; international capital flows have played a subordinate role so far.
In summary, the new survey indicates a significant improvement in investor sentiment in the German stock market – a factor that could favor further price gains in the short term, but should also be viewed with caution given existing external uncertainties.
This development has been confirmed by behavioral economist Joachim Goldberg and documented through analyses at the Frankfurt Stock Exchange.