DAX Impervious to AI Selloff and Weak Consumer Confidence
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.
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