FRANKFURT (dpa-AFX) - Until two or three weeks ago, the optimists dominated the stock markets, especially in the US. The boom in artificial intelligence (AI) as well as the foreseeable fall in interest rates and the associated economic hopes provided the fuel for the rally in recent months.
But clouds are gathering on the horizon. A second term in office for Donald Trump as US President is considered highly likely. Fears of new trade conflicts are spreading. The AI momentum has also slowed somewhat recently - investors are wondering how much further the trees can grow into the sky here.
Who will be president in the USA?
The question of whether the White House will remain in Democratic hands after Joe Biden's withdrawal thanks to the new candidate Kamala Harris or whether Trump will take the reins again after the assassination attempt on him will be decided in November. "From the perspective of the financial markets, the latest developments initially "only" mean a certain amount of uncertainty," comments Soren Hettler, Head of Investment Strategy and Private Clients at DZ Bank.
For the time being, investors are watching with bated breath as the tech giants Nvidia, Apple and Microsoft vie for the title of the world's most valuable company in the USA - driven by the expectation that AI applications will make the cash registers ring strongly and that German companies will also make a profit in the end.
AI wave is losing steam
Their earnings prospects appear more favorable now that the high inflation rates of 2022 are history. This creates scope for central bank interest rates to fall. Financing costs for governments, companies and private individuals could therefore fall - a good sign for corporate investment and consumption.
However, critics warn that good prospects are already being anticipated on the German stock market. And the AI wave, which had sent many tech stocks soaring, has also recently lost steam. One reason: in view of the increased chances of a Trump administration, major investors are increasingly focusing on more traditional industries, to the detriment of the technology sector.
The share price of the highly praised AI chip manufacturer Nvidia has now fallen a good 15 percent from its high in mid-June. Most recently, Google parent company Alphabet came under pressure on the market and electric car manufacturer Tesla plummeted after yet more disappointing quarterly figures.
As a result, Germany's leading index, the Dax, did not manage to climb back up to its May high of just under 18,900 points. Overall, Wall Street, which sets the tone worldwide, is showing signs of fatigue.
Economist sees air getting thinner
Edgar Walk, Chief Economist at Metzler Asset Management, for example, sees the air getting thinner. "It is likely to become increasingly difficult for companies to meet the high expectations", also because the global economy is only growing moderately. Investors have high expectations when it comes to AI in particular - many companies are already earning good money with this topic, but quite a few still have to prove it.
Looking ahead to the US presidential election on November 5, Felix Herrmann, Chief Economist at Aramea Asset Management, points out: "Contrary to popular wisdom, the political markets could have longer legs." This is because a mood of optimism is unlikely to be generated regardless of who wins the election. Instead, there is a threat of an even greater division in US society.
Michael Heise, chief economist at asset manager HQ Trust, is also cautious: "A Trump victory will at best bring a brief phase of economic recovery through tax cuts and deregulation. In the long term, however, the negative consequences for the global economy could be considerable. Europe would then be challenged by increased protectionism and a questioning of the rule-based order.
However, the majority situation in the US Congress after the election would also be important, says economist Alexander Buhrow from DZ Bank. After all, these will determine the president's room for maneuver. He will therefore very likely have to make considerable compromises. "Only with a clear Republican victory in the congressional elections could Trump implement some points of his agenda."/la/DP/zb
