24.02.25 - German election - what is so positive?

On the weekend, German election took place. The results do not show big surprises. The question was rather on numbers and percentage changes.

Markets: German stock index and euro show positive reaction with Dax index up 1%.

My View: I have some doubts that the most probable outcome, the big coalition, will be able to make the big changes and economic reforms needed. Without a political statement, the second partner in the coalition, SPD, was in the driving seat during the last government period, which completely failed. Should this coalition become reality, more than a fifth of German voters are ignored, the second largest party with by far the most gains during this election. Not the best conditions for a future stability in this country.
Therefore I doubt that the German and also European economy is set for a quick economic recovery, to gain back which the market is pricing in at the moment. My view remains that after this positive momentum since the beginning of the year, markets are vulnerable for setbacks.

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