Concerns about the economy and interest rates: German stock markets have fallen appreciably in the last week. Two main factors have weighed on the mood: On the one hand, China again reported weak economic data and news of further problems in the important property sector. The property group Evergrande has filed for protection from creditors in the USA under Chapter 15. This has made investors more pessimistic about China’s economic development and the consequences for the global economy. On the other hand, robust economic data from the US has provided arguments in favour of continued and prolonged monetary tightening by the US Federal Reserve. The minutes of the Fed’s last council meeting also made it clear that the Fed is keeping its options open for further interest rate increases.

Bonds: Manageable fluctuations: Prices on the German bond markets have fluctuated within manageable limits during the past week. While concerns about the global economic trend have supported the prices of German government bonds, speculation about further interest rate rises in the USA have put them under pressure. Rising yields on US bonds have also weighed on the prices of German government bonds. Finally, the yield on the benchmark ten-year German government bond remained unchanged at 2.62 per cent at the end of the trading week compared to the previous week’s closing level. By contrast, current yield rose from 2.58 to 2.63 per cent.

USA: Scepticism about China US stock markets have recorded losses in the past week. Concerns about further rising and prolonged high interest rates and Chinese economic development have made investors noticeably more sceptical. The Dow Jones index has fallen by 2.2 per cent week-on-week to 34,500.66 points. The broader S&P 500 index has fallen by 2.1 per cent to 4,369.71 points. The Nasdaq 100 index, which is dominated by technology stocks, has fallen 2.2 per cent to 14,694.84 points.

Outlook: After the gloomy previous week, many analysts have become more cautious when it comes to the coming days on German stock markets. In the notoriously weak stock market month of August, burdens are currently increasing, according to reports. Specifically, reference is made to concerns about further interest rate increases in the USA and the Chinese economy.

With regard to monetary policy, market participants are likely to focus their attention on the meeting of international central bankers in Jackson Hole in the US state of Wyoming, which begins this Thursday. Fed Chairman Jerome Powell will be in attendance, and his comments are likely to be closely analysed for possible signals as to how the US central bank will proceed. Although generally no concrete statements are expected, observers assume that Powell will declare that the fight against inflation is not over and will keep the door open for further interest rate rises.

In addition, further developments in the Chinese property sector are likely to be followed with interest. After Evergrande filed for creditor protection in the USA last week, fears are growing that the crisis will spread from the property sector to the financial sector, say observers.

In terms of economic data from Germany and the Eurozone, the Ifo business climate and the purchasing managers’ indices in particular could have an effect on market developments. Incoming orders for durable goods, consumer confidence and inflation expectations are among the indicators from the US which are likely to be analysed in particular for their potential impact on the Fed’s actions.

Companies in Germany have only announced quarterly reports below the top tier of the stock market. However, the figures from chip manufacturer Nvidia in the USA are expected to have a greater general impact. The company’s share price has risen considerably this year in the wake of the boom in artificial intelligence and has had a knock-on effect on a number of sector stocks. This could also apply to the quarterly results due to be published on Wednesday.