Despite numerous geopolitical conflicts and weak economic outlooks, stock market experts from the institutions of the Association of Public Banks (VÖB) hold a cautiously optimistic view concerning the future of the German stock market. They expect the Dax to end the year between 15,500 points (estimated by BayernLB) and even 17,000 points (Landesbank Hessen-Thüringen). "We advise using the current weakness to selectively expand stock positions," says Markus Reinwand, Helaba's equity strategist.

It will be crucial that the rise in yields, as anticipated by Helaba, comes to an end and long-term interest rates stabilize. If this happens, there is a good chance that the Dax will continue its upward trend. Currently, valuations are low, growth weaknesses are factored in, and economic expectations and investor sentiment seem to have reached their lowest point. Reinwand sees more opportunities in the domestic market. While the risk premium of the S&P 500 has shrunk to less than one percentage point, the Dax still maintains a relatively high risk premium of almost 7 percentage points compared to ten-year German government bonds.

Manfred Bucher, Senior Analyst for Equity and Interest Rate Strategy at BayernLB, is somewhat more skeptical. He is convinced that over the next few months, the weak global economy, murky monetary conditions, a significant contraction of the M1 money supply, and central banks' continued adherence to higher interest rates will weigh on the stock markets. However, in the soft landing scenario anticipated by BayernLB, any setbacks in stock prices would be limited and temporary. This is especially true given that the stock markets have already factored in much of the negativity with the correction of valuation that occurred in 2022. Bucher anticipates a market recovery in the second half of 2024, although limited potential for upward movement is expected due to sluggish corporate earnings.

Joachim Schallmayer, Head of Capital Markets and Strategy at DekaBank, predicts that the German stock index will reach 16,500 points by the end of the year. By the end of the following year, the index is forecasted to climb to 17,500 points. According to him, the global economy appears stable, albeit not very dynamic. The same applies to corporate earnings, even though the energy sector significantly weighed down third-quarter results. Inflation continues to decline, and core rates, excluding the highly volatile energy and food prices, are anticipated to decrease significantly in the fourth quarter and the next year. Furthermore, central bank monetary policies in both the United States and the Eurozone have reached their peak. As for valuations, price-to-earnings ratios are receding and are attractive, particularly in the US stock market. Schallmayer expects stocks to move moderately upward with fluctuations. Therefore, he emphasizes the importance of regular and countercyclical investing, as well as dividend collection.

Berndt Fernow, Head of the Research Group for Private and Corporate Customers at Landesbank Baden-Württemberg (LBBW), anticipates a rise of the Dax by the end of the year to 16,000 points. Based on his analysis, the Dax could climb to 17,500 points by the end of the following year. He does not expect a strong year-end rally because investors, at best, have only small profit margins on their positions which they have acquired throughout the year and will act cautiously until the end. For the coming year, he sees more potential for stock prices, particularly for the domestic stock market. Fernow believes that the central banks will start to ease monetary constraints by mid-year. "This should also have an impact on the long end of the capital market, making stocks more attractive compared to bonds," states the expert. Currently, stock risks, especially in the United States, are not adequately compensated.

Fernow emphasizes that this cautiously optimistic view represents the bank's primary scenario, to which he assigns a 55% probability. "In the present situation, which is marked by global conflicts, there are substantial risks," he warns. A disruption in the global oil supply due to an escalating Palestinian conflict is one such risk, and the Russian aggression in Ukraine could also hold negative surprises.

While the member institutes of the VÖB anticipate a recession for Germany at the end of the year, they expect a return to modest economic growth in 2024. BayernLB and LBBW predict a 0.5% increase in the gross domestic product, DekaBank foresees a rise of 0.9%, and Helaba an even more optimistic 1.3%.

The analysts are certain that the growth prospects in the United States are also limited. Projections for the American economic growth next year range from 0.5% to 1.5%.