Market sentiment: “Got away with it once again”

With hopes for a resolution to the US budget dispute, stock market fears have disappeared, and investors are clearly banking on a year-end rally.

12 November 2025. FRANKFURT (Goldberg & Goldberg).  It was probably the hope of an agreement in the US budget dispute and thus also the end of the shutdown last weekend that led to a significant recovery on the stock markets on both sides of the Atlantic. Any fears of a bubble bursting in the tech sector, especially in the field of AI, have once again been pushed into the background. Of course, the warning voices have not disappeared, but in some places they have perhaps become a little quieter. A bubble-o-meter, a reliable measuring device for stock market bubbles, has not yet been invented, let alone a related timing instrument that announces the bursting of such bubbles in good time. And so, after an initial setback of just under 1.5 percent last week, the DAX has recovered strongly and is even up 2.2 percent compared to last Wednesday's sentiment survey.

The significant recovery of the DAX has been accompanied by a sharp improvement in sentiment among the institutional investors with a medium-term trading horizon that we surveyed. Our Deutsche Börse Sentiment Index rose by 21 points compared with the previous week to a new level of +35 – the highest index level in two years. Overall, the bear camp has shrunk by 20 percentage points, with 95 percent of these investors ultimately shifting to a neutral stance. In other words, very few have ventured directly into the bull camp. This hesitant attitude is an indication that the previously bearish positions were closed out relatively late, possibly only at the beginning of the week.

Not boundlessly bullish

We are seeing a similar trend among private investors. The Deutsche Börse Sentiment Index in this panel rose by 19 points to a new level of +35. As with institutional investors, this is the highest level since November 2023. However, the shift between the individual groups is quite different here. In this panel, the bull camp gained 11 percentage points, with just under three-quarters of this increase attributable to the reduction of previous bearish positions and the rest coming from investors who were previously neutral. In other words, many former bears (presumably with profits behind them) have turned their position 180° to bullish. Could this be a sign that hopes for a year-end rally are already spreading?

If we distinguish between those we surveyed via social media and the other investors, this shift is quite similar in both subgroups. The sentiment index of the latter subgroup has also risen significantly to a new level of +27 in this context.

Year-end rally with obstacles?

Today's survey shows that sentiment among private and institutional investors is on a par and similarly optimistic. Too optimistic? Although we do not want to talk about euphoria at this point – a look at the relative sentiment levels for the next three and six months (still) suggests otherwise – the current mood represents an obstacle in the event of a further rise, especially in the 24,900/950 DAX range.

On the other hand, the downside is relatively poorly protected, especially since bearish institutional investors – who account for 18 percent of all respondents, the lowest level since the end of November 2018 – are not expected to generate much demand from profit-taking. In the event of another sell-off, the DAX would therefore be dependent on demand from long-term capital flows (primarily from abroad). Capital flows from which the DAX is also likely to have benefited in recent days.  

by Joachim Goldberg

12 November 2025, © Goldberg & Goldberg for Deutsche Börse

The Deutsche Börse 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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