FRANKFURT (dpa-AFX) - August has arrived and is living up to its reputation. As soon as the traditionally weak month for the Dax has begun, the index has taken off, falling below 18,000 points for the first time since mid-June. "Southwards" is therefore the motto for the coming trading week.

The German stock market is currently suffering from a toxic mixture of home-grown and international problems. Firstly, there is the correction in highly valued US technology stocks, which has received a new boost with the recent slumps in Amazon and Intel shares. The probability of further losses on the Nasdaq tech stock exchange and correspondingly negative conditions for the international financial markets is therefore high.

This would not be too bad if the profits from the expensive US technology stocks were shifted into cheaper stocks. However, this scenario has cracked after a series of weak US economic data. The latest US Purchasing Managers' Index for the US manufacturing sector has instead fueled concerns about the further development of the US economy. The data for July also showed that the weakness in the US labor market has arrived.

As a result, the previously favorable forecast for the stock markets could become a waste of time. "For a long time, it looked as if a golden scenario would materialize for equities: The economy is doing well and the central banks are cutting interest rates at the same time," say Helaba's experts. "Recently, doubts about this have increased." This means that fears that skeptics have been harboring about US monetary policy for some time could come true. "More and more people are saying that the Fed is already too late with its monetary easing," says Ulrich Kater, Chief Economist at Deka Bank.

The fact that the European Central Bank has already lowered interest rates and is at a more moderate interest rate level than the US Federal Reserve is little consolation. After all, the economic situation in Germany, Europe's largest economy, is anything but rosy. "The latest publication of gross domestic product data shows that the economic recovery is lagging and is therefore not progressing as expected," Helaba's experts note with regard to the contraction in economic output in the second quarter - especially as the forecast for the year as a whole is also cautious.

Added to this are growing political tensions. "In the Middle East, retaliation follows retaliation, which is why Israel and the USA are now preparing for a major attack from Iran," says capital market strategist Jürgen Molnar from the broker Robomarkets. "There has often been talk of an impending conflagration in the region, but the risk has never been as high as it is today."

Against this backdrop, it is not surprising that the DAX is now in difficult technical territory. "The leading German index is clearly back in short-term May downtrend mode," says Martin Utschneider, technical analyst at asset manager Donner & Reuschel. According to technical analyst Jorg Scherer from HSBC, there is a risk of a further decline below the low of June 14 at 17,951 points. Based on this, the risk is around 300 points to the support level of 17,619 points.

The numerous quarterly reports from German companies due in the coming week are unlikely to change the tense situation any more than the economic data. On the contrary: the Sentix economic index underlined the difficult situation on Monday. "In view of the unchanged political challenges and disappointing economic indicators, financial market analysts are likely to become more pessimistic once again," fears economist Kater./mf/gl/he

--- By Michael Fuchs, dpa-AFX ---