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Reasons to stay bullish as German confidence plummets

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Investor confidence in Germany has plummeted to its lowest level since 2012. It’s perhaps no surprise given increasing tensions in Ukraine, combined with other geopolitical events, and the slowing growth in the Eurozone. But despite a general sell-off in the markets of late, Saxo’s Peter Garnry says he’s remaining positive.

Garnry points to the global Purchasing Managers Index figures which he says show the world economy will grow 3%. He admits that Europe is weaker than expected. The Zew Center for European Economic Research says German investor confidence fell from 27.1 to 8.6 in July. But Garnry believes most of the bad news out of the Eurozone is temporary. He also points to China where the stock market has broken to the upside partly down to positive PMI figures in manufacturing. 

To those who say it’s time to play it safe and punt for fixed income, he says he remains bullish. Although the sell-off was perhaps necessary he says there are good opportunities in the market. In the short-term he would be a buyer of the DAX, up to 9,500.