The war in Ukraine and its consequences make stockbrokers look at the economy in the euro area with more skepticism than they have in about two years. The Sentix Barometer, published by investment advisory firm, fell for the third straight month in May, and more than expected.
It fell by 4.6 to minus 22.6 points – the lowest value since June 2020 – according to Sentix a clear warning sign of a recession. “The economic dimension of the Ukraine conflict is becoming more and more precarious,” says Sentix Managing Director Manfred Hübner.
Experts had only expected a drop to minus 20.8 points. The 1,267 investors surveyed by Sentix rated both the situation and the outlook worse. Expectations have even dropped to their lowest level since December 2008: “It is therefore clear that the economic downturn is now taking on a dimension that is likely to lead to significant upheaval in stocks, but also to an increase in risk provisioning for banks,” explained Sentix .
A look at the economic expectations for Germany shows the whole drama. With a value of minus 32.8 points, they have fallen to an all-time low. They even overshadow the slump in 2008 from the time of the global financial crisis.