Equity Bulls Risk Sleepwalking Into German Election-Fueled Drop
- Investors are betting on market-friendly coalition outcome
- Complacency risks a repeat of 2024 turmoil after EU vote
Election campaign posters line a boulevard in Berlin.
Photographer: John MacDougall/AFP/Getty ImagesThis article is for subscribers only.
Europe’s equity markets are priced for a near-perfect outcome from the high-stakes German federal election. For some investors, that raises the risk of a nasty surprise.
Germany’s benchmark DAX Index as well as the pan-European Stoxx 600 have notched record after record this year, partly on optimism that Germany’s new government would carry a robust voting majority in parliament, allowing it to push through much-needed reforms and kick-start the economy.