Weekly Outlook: “The outlook is brighter for the U.S. and emerging markets than for the DAX”
Hopes for an end to the Middle East conflict have been dashed once again. The Strait of Hormuz remains blocked, and oil prices remain high. This is also weighing on the DAX.
May 11, 2026. FRANKFURT (Deutsche Börse). There is still no sign of peace in Iran. According to U.S. President Trump, Iran’s response to the latest U.S. proposal is “completely unacceptable.” However, there are no major market declines. “It is astonishing how calmly the markets continue to react to the war and the resulting de facto blockade of the Strait of Hormuz,” comments Ulrich Kater of DekaBank.
In the U.S., the S&P 500 and Nasdaq rose to new record highs again on Friday. After a brief surge above 25,000 points last Wednesday, the DAX (DE0008469008) continues to trend sideways: On Monday morning, the index stands at 24,267 points, down from 24,396 at Friday’s close. At $106 per barrel of Brent, the oil price remains well above the $70 level seen before the outbreak of the war.
„DAX-Berichtssaison leicht enttäuschend“
Kater points to the “excellent earnings growth” posted by U.S. companies in the first quarter. The DAX earnings season, by contrast, has been slightly disappointing so far and lags noticeably behind that of the S&P 500 and the Stoxx 600 (EU0009658202). “The aggregate earnings surprise stands at minus 4.5 percent. Earnings growth of 0.7 percent is lower than forecasts at the start of the earnings season,” he notes. The consensus now expects 11 percent earnings growth for the current year and around 15 percent for 2027. “While these figures should generally support the DAX, other markets such as the U.S. and emerging markets currently have stronger fundamental support.”
“Stocks aren’t really cheap”
Markus Reinwand of Helaba is also taking stock of the earnings season. “In the case of the U.S., the strong numbers seem to justify, to some extent, the premature praise reflected in higher valuations—and the valuation discount here in Germany,” he notes. However, stocks are not really cheap on either side of the Atlantic. “The risk-reward ratio is not particularly attractive at the moment,” he says. The bank continues to recommend only “holding.”
Markus Reinwand
U.S.: Consumer Sentiment at Rock Bottom
But the economy is struggling in the U.S. as well: While the U.S. job market remains relatively robust, consumer sentiment has fallen to a new record low. “Households are more pessimistic about their current situation than they have been since the 2009 financial crisis,” notes Rolf Schäffer of LBBW, referring to the University of Michigan index released on Friday. The main reason: inflation. “The average price of gasoline is more than 50 percent higher than it was at the start of the Iran war.”
Earnings season is winding down in the U.S., but there is still plenty of activity here. Twelve DAX companies are reporting, including Siemens, Deutsche Telekom, Bayer, Munich Re, and Allianz. Also important: U.S. President Trump will visit China from Wednesday to Friday and speak with President Xi Jinping, among other things, about economic relations.
Key Economic Data
Tuesday, May 12
11:00 a.m. Germany: ZEW Economic Sentiment Index (May). Commerzbank expects a decline to -35 (from -17), which would mark a multi-year low.
2:30 p.m. U.S.: Consumer Prices for April. The war in Iran already caused U.S. inflation to rise significantly from 2.4% to 3.3% in March, as Commerzbank notes. The figures for April are now likely to show a further jump to 3.7%. The main reason is the sharp rise in oil prices.
Wednesday, May 13
11:00 a.m. Eurozone: March industrial production. Helaba expects a 0.5 percent increase from the previous month, but a 2.6 percent decline compared to the previous year.
Thursday, May 14
8:00 a.m. UK: First-quarter GDP. After two weak previous quarters, GDP is likely to have grown strongly in the first quarter, according to DekaBank. However, distortions caused by front-loading effects in the run-up to the Iran war could overstate the underlying growth momentum.
2:30 p.m. U.S.: April retail sales. Retail sales are expected to be solid and argue against the need for loose monetary policy in the U.S., explains Helaba.
Friday, May 15
U.S.: New Fed Chair. Kevin Warsh takes over as Chair of the Fed’s Board of Governors.
By Anna-Maria Borse, May 11, 2026, © Deutsche Börse AG
About the Author
Anna-Maria Borse is a finance and business editor specializing in financial markets, the stock market, and economic issues.
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