Weekly outlook: A quiet end to the year after a turbulent year
No major surprises are expected for the last trading days of 2025. But even if the rally fails to materialize, the DAX has gained more than a fifth since the beginning of the year. However, the issue of (too) high valuations remains, especially in the tech sector.
22 December 2025. FRANKFURT (Deutsche Börse). There is still no sign of a real year-end rally – despite support from Wall Street. “The few trading days remaining until the end of the year are unlikely to be enough to generate an upward breakout,” says chart technician Christoph Geyer. However, he points out that the DAX's performance for the year is quite impressive, with a gain of over 20 percent.
On Monday morning, the DAX (DE0008469008) stood at 24.309,6633 points after closing at 24,288 on Friday and reaching an all-time high of 24,771. The Stoxx Europe (EU0009658202) has already reached a new high. The US markets had gained on Friday. The Dow Jones, S&P 500, and Nasdaq 100 are now just below their record highs. The reason for the recent rise was once again speculation about interest rate cuts. US inflation in November was lower than expected at 2.7 percent, and the labor market was weaker than expected. Both factors make interest rate cuts more likely.
The price development of precious metals remains striking, with new all-time highs for silver and a gold price that is approaching its October peak again. Bitcoin, on the other hand, continues to struggle, with prices around 30 percent below its all-time high.
“Stock market will become broader and more stable in 2026”
However, the question of whether or not there is an AI bubble remains. “AI should be viewed less as a bubble and more as a structural change,” says Robert Halver of Baader Bank. He is convinced that AI will lead to significant productivity gains in all areas of the economy. Nevertheless, the general boom in the AI sector will increasingly shift toward selectivity. “Similar to the fairy tale Cinderella: the good ones go into the basket, the bad ones go into the crock.”
In addition, the acceleration of the global economy is benefiting economic indicators, especially in Germany – even in the second tier. And the emerging markets as “new industrialized countries” offer solid investment alternatives outside the traditional Western markets. “This will make the stock market broader and more stable in 2026, even if the magic of the Magnificent 7 wears off.”
Robert Halver
“European companies not highly valued”
Berenberg Bank expects US stocks to continue their rally in 2026. “At least on paper, there is no reason to believe that earnings growth on the US stock market will take a break next year,” says Ulrich Urbahn. The reasons: lower interest rates, a business-friendly Trump administration, and rising profit margins thanks to AI. However, very high valuations and structurally higher equity positioning by private investors suggest that at least part of this has already been priced in.
European companies, on the other hand, are not highly valued despite their strong performance since the beginning of the year. “Should the economy recover noticeably, there is further potential for catching up.” Overall, the bank expects the stock market boom to continue in 2026, but to be less pronounced than in previous years.
Important dates
Tuesday, 23 December
2:30 p.m. USA: Third quarter GDP. With a long delay, the US gross domestic product for the third quarter is now being published, as reported by DekaBank. Private consumption is said to have boosted economic growth even more strongly than in the previous quarter. In addition, foreign trade made a positive contribution to growth. However, the greatest attention is being paid to corporate investment, especially in areas relevant to AI.
3:15 p.m. USA: November industrial production. A slight increase of 0.1 percent compared to the previous month is expected.
Wednesday, 24 December to Friday, 26 December
Germany: Christmas holidays, no trading on the German stock exchange.
Tuesday, 30 December
8:00 p.m. USA: Minutes of the US Federal Reserve meeting on November 9/10. According to DekaBank, the minutes are likely to reveal considerable resistance to the interest rate cut.
2:00 p.m. Trading closes in Frankfurt and on Xetra, among others.
Wednesday, 31 December
Germany: New Year's Eve, no trading on the German stock exchange.
2:30 a.m. China: Purchasing Managers' Index for December. The official Purchasing Managers' Index for the manufacturing sector is likely to point to continued weakness in the industry, according to DekaBank. Despite stronger demand for exports from China as a result of a rapprochement in the tariff dispute with the US, domestic factors such as weak private consumption and ongoing problems in the real estate sector weighed on the index.
Thursday, 1 January
Germany: New Year's Day, no trading on the German stock exchange.
By Anna-Maria Borse, 22 December 2025, © Deutsche Börse AG
About the author
Anna-Maria Borse is a finance and economics editor specializing in financial markets/stock exchanges and economic issues.
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