Improvement at German and US Stock Markets Expected for 2009

The leading indices of the German and US stock markets, Dax and Dow Jones, will recover somewhat next year. This is the result of a survey among 250 financial market experts conducted by the Centre for European Economic Research (ZEW), Mannheim.

Generally, the surveyed experts predict the Dax to note around 5,400 points by the end of 2009, as compared to the 4,500 points it noted in early December. They expect an average increase of the Dow Jones to 9,500 points until the end of next year. Given the high risks induced by the financial market crisis, this is a good outlook, even though the indices will not reach their levels of the end of 2007.

The financial market experts were also asked about the role government bonds will play in their portfolios next year. The turmoil of the past months has caused more and more investors to seek refuge in the safe haven of government bonds. For 2009, 45 percent of the experts surveyed are planning on maintaining the current amount of government bonds. Almost one third of the experts, however, will invest less in government bonds. German government bonds are experiencing the most trust from investors.

The survey showed that the majority of experts (77 percent) are currently holding only five percent of natural resources, such as gold or oil, in their portfolio. A majority of the experts states that this is not to change until the end of 2009. Almost one third of the experts surveyed, however, is planning on investing more in natural resources.

For further information please contact

Dr. Sandra Schmidt, E-mail: s.schmidt@zew.de