Market sentiment: “Against international capital flows”

17 September 2025. FRANKFURT (Goldberg & Goldberg). It took around two weeks for the DAX to break out of its trading range of September 2 yesterday. Until then, trading had been very calm at times, marked by several futile attempts to break through the upper limit. In fact, however, the DAX level of 23,870 points at the time of the last sentiment survey was not to be exceeded.

The recent weakness of the DAX comes at a time when a particularly significant meeting of the US Federal Reserve's Open Market Committee is coming to an end this evening (CEST), which is considered an important event risk. An interest rate cut is widely expected, with the only question being whether it will be 25 or 50 basis points. Meanwhile, the fund manager survey published yesterday by Bank of America (BoA) has provided an indication of why the DAX has not really made any headway on the upside in recent weeks. Only 15 percent of international fund managers said they were overweight in eurozone equities, down from a four-year high of 41 percent in July. In other words, there have been significant capital outflows, probably primarily toward the US.

Bought at the lower limit

While international fund managers are increasingly turning their backs on the eurozone, the mood among the institutional investors we surveyed with a medium-term trading horizon has improved noticeably. Our Frankfurt Stock Exchange Sentiment Index rose by 20 points to a new level of +13. The 19 percentage point increase in the bull camp comes almost exclusively from investors who were previously neutral and who took advantage of the DAX's weakness – in the best case in the zone we last mentioned between 23,300 and 23,350 points – to make purchases. The bear camp has only shrunk by one percentage point.

Less spectacular at first glance, but nevertheless noteworthy, was the situation among private investors. Our Frankfurt Stock Exchange Sentiment Index rose by 5 points in this panel to a new level of +7. The polarization between bulls and bears increased asymmetrically (bulls +7, bears +2 percentage points). However, when comparing the private investors we survey via social media with the rest, it is noticeable that the former are now less optimistic than before. Among the other private investors, however, the trend is moving in the opposite direction: similar to institutional investors, the group of neutral investors has decreased significantly by 14 percentage points, with almost 80 percent of those willing to change sides moving to the bulls.

Clear warning signs

Today's survey shows that there is a significant gap in sentiment between private and institutional investors, with the latter now significantly more optimistic than their private counterparts, in contrast to last week. It is quite possible that the young bulls among institutional investors based their buying decisions on the assumption that the above-mentioned trading range of September 2 will continue in the future. However, it is puzzling that despite this strong growth in the bull camp, the DAX has not risen week-on-week and has lost 1.7 percent in value from this perspective alone.

If we also take into account the change revealed by the aforementioned BoA survey, today's survey results give pause for thought: the bullish commitments of domestic investors are offset by capital outflows from international investors. But the DAX is not only under pressure because young optimists are likely to be ready to sell (probably more so at 23,750/800) in the event of price gains, thus standing in the way of a significant rise. Things will get really uncomfortable for the bullish majority if the DAX comes under further pressure. Then the emergency brake would have to be pulled here and there in the form of stop-loss sales – an unfavorable starting position for the DAX that should not be taken lightly.

by Joachim Goldberg

17 September 2025, © Goldberg & Goldberg for boerse-frankfurt.de

The Frankfurt Stock Exchange Sentiment Index ranges between -100 (total pessimism) and +100 (total optimism), with the transition from positive to negative values marking the neutral line. 

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