Holger Zschaepitz
@Schuldensuehner
Holger Zschäpitz is market maniac @Welt and Author of 'Schulden ohne Sühne?' a book on states' addiction to debt. Pics:
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Good Morning from Germany, where the recovery is finally broadening. Sep’s composite PMI unexpectedly jumped to 53.8 from 51.8, its highest since Oct 2025. Services sprang back into expansion at 52.9, defying forecasts for continued contraction and joining manufacturing in growth territory. Employment rose for a second month. After years of underperformance, some welcome momentum for Europe’s largest economy. The catch: inflation pressures are picking up again, too.
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Tech is back in record territory. Nasdaq 100 rises 0.8% to 30,732, its first record since June, as chipmakers rally and oil falls on hopes of an end to the Iran war. Next test: this week’s Trump-Xi summit. The bigger picture: a 29,521% total return since Feb 1985, the index’s launch; 14.6% annualized. W/dividends reinvested, $10,000 would have grown to almost $3mln, despite the dot-com crash, financial crisis & pandemic.
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AMD joins the $1 TRILLION club! Shares jump almost 10%, lifting its market cap to $1.005tn. It’s the 7th chipmaker to cross the threshold, after Nvidia, TSMC, Broadcom, Micron, Samsung & SK Hynix. From just $90bn in October 2022: an elevenfold increase in under 4yrs.
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Vonovia stock price keeps falling after the Left party’s Berlin election win revived fears of housing expropriation. Germany’s largest residential landlord has €27.5bn of property in the capital; 27% of its portfolio, per BNP Paribas. Now shares trade 62% below reported net tangible assets of €46.22 per share. Even w/o expropriation, tighter rent controls could squeeze returns as refinancing costs rise. The paradox: the housing shortage supporting Vonovia’s rents is also fuelling the political backlash against them.
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The Euro slides to $1.1473 as state election losses weaken Chancellor Merz. Political risk is back in the price. France adds to the jitters: a credit downgrade, shaky finances & a presidential race ahead. The OAT-Bund spread remains >100bps.
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Good Morning from Germany, where voters have delivered a historic blow to the political mainstream. Merz’s CDU has been shut out of a state parliament for the first time in the Federal Republic’s history: just 4.9% in Mecklenburg-Western Pomerania, where the far-right AfD won 38.2%. In Berlin, The anti-capitalist Left topped the poll w/25.7%. As Germany’s electorate polarises, pressure on Chancellor Merz is mounting and so is the risk that much-needed growth reforms are watered down or blocked altogether.
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A disastrous election night for Germany’s political establishment. These are the headlines flashing across Bloomberg terminals around the world.
“Risk-free” can be painfully expensive. US 10y Treasuries have suffered their worst 5y nominal returns in over 120yrs, Goldman shows. Inflation made the losses even uglier. The twist: after this historic rout, yields are merely back near their long-run average.
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Good Morning from Germany, where Berlin & Mecklenburg-Western Pomerania vote today and Chancellor Friedrich Merz’s job could be on the line. His CDU trails the Left in Berlin and polls at just 6% in the northeast. Falling below 5% threshold could trigger party revolt against him.
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#France# keeps sliding down the credit ladder. Scope cuts its rating to A+ from AA-, while DBRS turns negative on its AA outlook. The 10y yield premium over Germany tops 100bps for the first time in 14 years. Political paralysis is getting expensive. (via BBG)
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#France# is paying the price of fiscal disbelief. Its 10y bond spread over Germany has topped 100bps for the 1st time since 2012. Yields hover around 4.5%, near an 18y high. This year’s deficit is now forecast at 5.4% of GDP, missing the 5% target. Paris still promises 3% by 2029. Bond markets want more than promises.
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Good Morning from Germany, where the love affair w/the bank account continues. Retail deposits have hit a fresh record of €3.027tn, up another €9bn since June. Germans may worry about inflation, markets and politics but they keep piling more money into their deposits. At least on avg, households should have plenty of liquidity ready when Germany’s new Altersvorsorgedepot, a kind of German 401(k), launches in Jan 2027.
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#France# vows to cut its deficit to 5% of GDP in 2027 after missing the 2026 target. A €54bn savings drive looks ambitious w/growth at just 0.5% and parliament deeply split. Markets show the credibility gap: 10y OATs yield ~97bps more than Bunds; near Euro-crisis highs.
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Good Morning from Germany, where Chancellor Friedrich Merz’s approval rating has hit a new all-time low. Just 10% of Germans are satisfied w/his performance, while 88% are dissatisfied. Even among CDU/CSU supporters, dissatisfaction now leads 57% to 42%. For comparison, Olaf Scholz’s worst reading was 23% approval and 76% disapproval.
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#Fed# unanimously raises benchmark rate by 25bps to 3.75%-4% range as expected. FOMC Median forecast shows one additional 25bps hike in 2026. So the Fed and Warsh past the credibility test, at least for now!
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Good Morning from Germany, where the homeownership dream is slipping away. The official homeownership rate has plunged to just 41.9%, from 46.5% in 2018. Germany now sits at the bottom of the EU league table, vs 68.4% EU avg, 61.2% in France and 70%+ in Italy and Spain. The reasons: construction costs have surged 160% since 2000 vs just 64% for consumer prices, while higher mortgage rates, steep transaction costs and fading state support have pushed the dream of owning a home ever further out of reach.
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AI trade under pressure: Goldman’s pair trade of long AI Winners vs. short AI-at-Risk stocks plunged 10%, its worst day since the DeepSeek shock in Jan 2025. The trigger: debate over slowing the pace of AI development; a reminder of how crowded the AI consensus has become.
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Good Morning from Germany, where the global bond selloff is hitting hard. The 10y Bund yield has surged to 3.57%, the highest since 2009. Germany’s benchmark borrowing cost is now ~440bps above its 2020 low of -0.86%. The era of free money is becoming a distant memory.
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OOPS! US 10y yield tops 5% for the 1st time since 2023.
Good Morning from Germany, where the AAA rating is becoming a growth bet. Rating agency Scope sees potential growth at just 0.8% vs 1.6% for AAA peers and debt rising from 63.5% of GDP in 2025 to ~83% by 2036. If growth slips to 0.4% and borrowing costs rise 50bp, debt nears 90%.
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