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Gino Bruno D’Alessio•Wednesday, January 29, 2025•2 min read
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MARKETS TREND
Germany’s main stock index hits a new all-time high, shaking off DeepSeek’s disruption and weak consumer confidence data.
- GfK NIM Consumer Confidence drops more than expected
- DeekpSeek’s disruption of the AI fueled rally overcome in one day
The DAX opened higher this morning, touching a new ATH at 21,555 before retreating. Siemens Energy, which was hit hard by the DeepSeek revelation, has gained another 3% this morning after dropping nearly 20% on Monday.
Consumer Confidence Continues to Wane
The DAX showed little reaction to the weak consumer confidence data as it manages to stay in the green.
GfK and NIM data showed a larger drop in consumer confidence from -21.6 last month to -22.4 today.
The main causes of concern were job prospects and rising inflation, both weighing heavily on consumer sentiment.
The market consensus for today’s number forecast a slight improvement to -20. The adds to significant weak economic data that we have been receiving throughout 2024.
Breakdown of Consumer Confidence Data
| Consumer climate | -22.4 | -21.4 | -29.6 |
| Consumer climate components | Jan 2025 | Dec 2024 | Jan 2024 |
| – willingness to buy | -8.4 | -5.4 | -14.8 |
| – income expectations | -1.1 | 1.4 | -20.0 |
| – business cycle expectations | -1.6 | 0.3 | -6.6 |
2024 showed that Germany’s economy contracted for a second year in a row. The decline in activity cemented Europe’s largest economy as a laggard compared to its peers.
In recent months some of Germany’s largest companies have announced jobs cuts, including Bayer, Volkswagen, and ThyssenKrupp.
A number above zero indicates an expansion in private consumption in the following month. While a number below zero indicates contraction compared to the same period in the previous year.
The willingness to buy component is assessed from the question “Do you think now is a good time to buy major items?”.
The income expectations index indicates household expectations on incomes. Both sub-indexes show a deterioration in consumer’s outlook for February compared to January.
DAX Live Chart
DAX
Gino D’Alessio is a professional Forex trader with 20+ years of experience in the financial markets as a broker-dealer. Having worked in New York and London, Gino is regularly featured on Seeking Alpha. He completed the CAIA program in 2015, which also gave great insight into global macro factors. His main focus is FX majors, indices and commodities.
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