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Germany’s economy is currently facing a myriad of challenges, casting a shadow of uncertainty over its outlook. Despite a brief recession at the beginning of the year, the German economy is still grappling with various factors that are impeding its growth prospects. These include elevated inflation, high interest rates, a sluggish recovery in its crucial export market of China, elevated energy costs, all of which are exerting downward pressure on economic activity.
The Ifo index has experienced a second consecutive monthly drop after six months of expansion. The decline in the index, now standing at 88.5 compared to 91.7 in May, is attributed to multiple factors such as the slower rebound of the Chinese economy, concerns of a looming recession in the United States, and ongoing monetary policy tightening.
The June disappointing reading of the Ifo index indicates that the anticipated recovery of the German economy may be nothing more than wishful thinking. Optimism is waning, and concerns about growth are mounting. It is important to note, however, that this does not imply an extended period of recession in the years to come. Rather, with a combination of short-term challenges and long-term structural issues, it is likely that growth will remain subdued at best.
It is evident that the initial optimism about the economy has given way to a more realistic perspective. A combination of factors including weakened purchasing power, reduced industrial order volumes, and the impact of the most stringent monetary policy tightening in decades, all point towards a period of weak economic activity.
Moreover, structural challenges such as the ongoing conflict in Ukraine, demographic shifts, and the ongoing energy transition will continue to pose long-term obstacles to Germany’s economic growth. However, amidst these challenges, there are glimmers of hope. The faltering rebound of the Chinese economy could still yield temporary positive surprises, while a decrease in headline inflation, coupled with declining energy and food prices, along with rising wages, should provide support to private consumption in the latter half of the year.
According to leading economic institutes, Germany’s growth prospects appear relatively lacklustre, with projections indicating growth of less than one percent in the coming years. This is compounded by persistent structural weaknesses, including bureaucratic inefficiencies, a low level of digitalization, and an aging population that could lead to labour shortages, all of which are impeding the country’s economic performance.
The Bundesbank, in its monthly report, suggests that the recession in Germany is expected to conclude in the spring quarter, with a modest increase in gross domestic product anticipated. This uptick is expected to be supported by the resilience of German industries in coping with declining demand, thanks to lower energy prices, alleviation of supply bottlenecks, and robust order books.
Looking ahead, the Bundesbank predicts a decline of 0.3% in GDP for 2023, followed by a gradual recovery with growth rates of 1.2% in 2024 and 1.3% in 2025.
Source: Tradingview
Despite the current macro backdrop, the leading German DAX 40 index has posted a fresh record high of 16,427 on the 16 th of June 2023. While at this juncture in time the sequence of higher highs and higher lows is intact, suggesting that the up trend is still in force, the medium-term up trend line has been breached recently showing that the trend is deteriorating.
The leading Relative Strength Index (RSI) has formed a quadruple bearish divergence on the daily chart, showing that internal momentum conditions are also deteriorating. Given the proximity of the new all-time high to the previous peak of the 2022 bear market and the formation of such a large bearish divergence, the current set up casts bearish light on the chart.
A double top pattern appears to be forming as well, showing that the bears are stepping into the market. While the pattern is not confirmed at this stage, a break below support of 15,629 would provide the required confirmation with the breakout targeting 15,000 initially.
Active traders looking for magnified exposure to the German share market may consider our +3x Long Germany 40 and -3x Short Germany 40 ETPs to take advantage of upcoming short-term moves.
Overall, ETPs have revolutionized the way investors gain exposure to a variety of asset classes, making investing more accessible, affordable, and transparent. These investment vehicles offer several benefits that make them an attractive choice for investors.
Our ETFs are designed to provide investors with a cost-effective way to diversify their portfolios and gain leveraged exposure to a wide range of assets, such as stocks, bonds and commodities that were once out of reach.
In summary, our ETPs provide a unique investment opportunity for investors looking for diversification, leverage, flexibility, cost-efficiency, and liquidity who seek to amplify profits in both rising and falling markets.
Your capital is at risk if you invest. You could lose all your investment. Please see the full risk warning here.
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The ETP securities are intended for sophisticated investors who (i) are able to monitor their investment in the ETP securities on a frequent basis in line with the recommended holding period; (ii) understand the risk of compounded returns and the increased risk of investment in leveraged products; (iii) can afford to risk losing their investment; and (iv) and have a very short investment horizon in line with the recommended holding period. Please ensure that you fully understand the risks involved. If in any doubt, please seek independent financial advice. Investors should refer to the section entitled “Risk Factors” in the relevant prospectus for further details of these and other risks associated with an investment in the securities offered by the Issuer. This material is not intended to be relied upon as a forecast, research or investment advice and is not a recommendation, offer or solicitation to buy or sell any financial instrument or product or to adopt any investment strategy. Any decision to invest should be based on the information contained in the relevant base prospectus after seeking independent investment, tax and legal advice.
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Risk Warnings
The value of an investment in ETPs may go down as well as up and past performance is not a reliable indicator of future performance. Trading in ETPs may not be suitable for all types of investor as they carry a high degree of risk. You may lose all of your initial investment. Only speculate with money you can afford to lose. Changes in exchange rates may also cause your investment to go up or down in value. Tax laws may be subject to change. Please ensure that you fully understand the risks involved. If in any doubt, please seek independent financial advice. Investors should refer to the section entitled “Risk Factors” in the relevant prospectus for further details of these and other risks associated with an investment in the securities offered by the Issuer.
This website is provided for your general information only and does not constitute investment advice or an offer to sell or the solicitation of an offer to buy any investment.
Nothing on this website is advice on the merits of any product or investment, nothing constitutes investment, legal, tax or any other advice nor is it to be relied on in making an investment decision. Prospective investors should obtain independent investment advice and inform themselves as to applicable legal requirements, exchange control regulations and taxes in their jurisdiction.
This website complies with the regulatory requirements of the United Kingdom. There may be laws in your country of nationality or residence or in the country from which you access this website which restrict the extent to which the website may be made available to you.
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The information provided on this site is not directed to any United States person or any person in the United States, any state thereof, or any of its territories or possessions.
Persons accessing this website in the European Economic Area
Access to this site is restricted to Non-U.S. Persons outside the United States within the meaning of Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”). Each person accessing this site, by so doing, acknowledges that: (1) it is not a U.S. person (within the meaning of Regulation S under the Securities Act) and is located outside the U.S. (within the meaning of Regulation S under the Securities Act); and (2) any securities described herein (A) have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction and (B) may not be offered, sold, pledged or otherwise transferred except to persons outside the U.S. in accordance with Regulation S under the Securities Act pursuant to the terms of such securities. None of the funds on this website are registered under the United States Investment Advisers Act of 1940, as amended (the “Advisers Act”).
Exclusion of Liability
Certain documents made available on the website have been prepared and issued by persons other than Leverage Shares Management Company. This includes any Prospectus document. Leverage Shares Management Company is not responsible in any way for the content of any such document. Except in those cases, the information on the website has been given in good faith and every effort has been made to ensure its accuracy. Nevertheless, Leverage Shares Management Company shall not be responsible for loss occasioned as a result of reliance placed on any part of the website and it makes no guarantee as to the accuracy of any information or content on the website. The description of any ETP Security referred to in this website is a general one. The terms and conditions applicable to investors will be set out in the Prospectus, available on the website and should be read prior to making any investment.
Leverage Investment
Leverage Shares exchange-traded products (ETPs) provide leveraged exposure and are only suitable for experienced investors with knowledge of the risks and potential benefits of leveraged investment strategies.
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Leverage Shares Management Company may collect data about your computer, including, where available, your IP address, operating system and browser type, for system administration and other similar purposes (click here for more information). These are statistical data about users’ browsing actions and patterns, and they do not identify any individual user of the website. This is achieved by the use of cookies. A cookie is a small file of letters and numbers that is put on your computer if you agree to accept it. By clicking ‘I agree’ below, you are consenting to the use of cookies as described here. These cookies allow you to be distinguished from other users of the website, which helps Leverage Shares Company provide you with a better experience when you browse the website and also allows the website to be improved from time to time. Please note that you can adjust your browser settings to delete or block cookies, but you may not be able to access parts of our website without them.
This website is maintained by Leverage Shares Management Company, which is a limited liability company and is incorporated in Ireland with registered offices at 2 Grand Canal Square, Grand Canal Harbour, Dublin 2.
By clicking you agree to the Terms and Conditions displayed.
Terms and Conditions
Notice
If you are not classified as an institutional investor, you will be categorised as a private/retail investor. At this time, we cannot send communications directly to private/retail investors. You are welcome to view the contents of this website.
If you are an ‘Institutional investor’, you affirm either that you are a Per Se Professional Client, or that you wish to be treated as an Eligible Counterparty Client, both as defined under the Markets in Financial Instruments Directive, or an equivalent in a jurisdiction outside the European Economic Area.
Risk Warnings
The value of an investment in ETPs may go down as well as up and past performance is not a reliable indicator of future performance. Trading in ETPs may not be suitable for all types of investor as they carry a high degree of risk. You may lose all of your initial investment. Only speculate with money you can afford to lose. Changes in exchange rates may also cause your investment to go up or down in value. Tax laws may be subject to change. Please ensure that you fully understand the risks involved. If in any doubt, please seek independent financial advice. Investors should refer to the section entitled “Risk Factors” in the relevant prospectus for further details of these and other risks associated with an investment in the securities offered by the Issuer.
This website is provided for your general information only and does not constitute investment advice or an offer to sell or the solicitation of an offer to buy any investment.
Nothing on this website is advice on the merits of any product or investment, nothing constitutes investment, legal, tax or any other advice nor is it to be relied on in making an investment decision. Prospective investors should obtain independent investment advice and inform themselves as to applicable legal requirements, exchange control regulations and taxes in their jurisdiction.
This website complies with the regulatory requirements of the United Kingdom. There may be laws in your country of nationality or residence or in the country from which you access this website which restrict the extent to which the website may be made available to you.
United States Visitors
The information provided on this site is not directed to any United States person or any person in the United States, any state thereof, or any of its territories or possessions.
Persons accessing this website in the European Economic Area
Access to this site is restricted to Non-U.S. Persons outside the United States within the meaning of Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”). Each person accessing this site, by so doing, acknowledges that: (1) it is not a U.S. person (within the meaning of Regulation S under the Securities Act) and is located outside the U.S. (within the meaning of Regulation S under the Securities Act); and (2) any securities described herein (A) have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction and (B) may not be offered, sold, pledged or otherwise transferred except to persons outside the U.S. in accordance with Regulation S under the Securities Act pursuant to the terms of such securities. None of the funds on this website are registered under the United States Investment Advisers Act of 1940, as amended (the “Advisers Act”).
Exclusion of Liability
Certain documents made available on the website have been prepared and issued by persons other than Leverage Shares Management Company. This includes any Prospectus document. Leverage Shares Management Company is not responsible in any way for the content of any such document. Except in those cases, the information on the website has been given in good faith and every effort has been made to ensure its accuracy. Nevertheless, Leverage Shares Management Company shall not be responsible for loss occasioned as a result of reliance placed on any part of the website and it makes no guarantee as to the accuracy of any information or content on the website. The description of any ETP Security referred to in this website is a general one. The terms and conditions applicable to investors will be set out in the Prospectus, available on the website and should be read prior to making any investment.
Leverage Investment
Leverage Shares exchange-traded products (ETPs) provide leveraged exposure and are only suitable for experienced investors with knowledge of the risks and potential benefits of leveraged investment strategies.
Cookies
Leverage Shares Management Company may collect data about your computer, including, where available, your IP address, operating system and browser type, for system administration and other similar purposes (click here for more information). These are statistical data about users’ browsing actions and patterns, and they do not identify any individual user of the website. This is achieved by the use of cookies. A cookie is a small file of letters and numbers that is put on your computer if you agree to accept it. By clicking ‘I agree’ below, you are consenting to the use of cookies as described here. These cookies allow you to be distinguished from other users of the website, which helps Leverage Shares Company provide you with a better experience when you browse the website and also allows the website to be improved from time to time. Please note that you can adjust your browser settings to delete or block cookies, but you may not be able to access parts of our website without them.
This website is maintained by Leverage Shares Management Company, which is a limited liability company and is incorporated in Ireland with registered offices at 2 Grand Canal Square, Grand Canal Harbour, Dublin 2.
By clicking you agree to the Terms and Conditions displayed.
