A specter is haunting Europe: This is how the Communist Manifesto by Karl Marx and Friedrich Engels begins.
However, it is not the "spectre of communism" that is dealt with now, but rather the specter of recession and its effects on the stock markets.
And they are anything but pleasant, because after the recovery in the previous weeks, investors have gone back into crisis mode in the past few trading days.
The specter of recession is not only spreading spooks, but is now taking on concrete forms.
Markus Fruehauf
Editor in Business.
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This is shown by the consumption barometer published by the market research institute GfK on Friday.
The mood to buy in Germany fell to a record low in view of rising energy prices and high inflation.
At the same time, the mood in German companies continues to sink, as the business climate index of the Munich economic research institute Ifo showed on Thursday.
Accompanying the worsening sentiment are soaring electricity and gas prices that will keep inflationary pressures high.
It is true that the central banks, such as the American Fed and, in the meantime, also the European Central Bank (ECB) are making efforts to regard combating inflation as their most important task.
"Both the Fed and the ECB seem keen to restore their credibility and keep inflation expectations firmly in check, even at the expense of economic downturns," expects DWS, Deutsche Bank's fund management company.
But the central banks cannot completely ignore the economic environment.
After all, aggregate demand falls in a recession, which should ease things up on the price front.
ECB Director Fabio Panetta drew attention to this this week.
It is doubtful that the weak euro, which has settled around parity with the dollar, can support export demand.
Then the Chinese economy in particular would have to pick up speed again.
The euro exchange rate now reflects doubts about Europe.
The senior investment strategist at American asset manager Invesco, Bernhard Langer, said in an interview with the FAZ this week that the exchange rate is the barometer of confidence in an economy.
And since Europe and Germany as the most important economy has lost a lot.
The high dependency on Russian energy supplies represents a cluster risk that makes the United States look much more robust in comparison.
Price fluctuations are likely to continue on the stock market.
DWS expects only limited upside potential over a 12-month horizon.
The full effects of the tightening of monetary policy are only slowly beginning to become visible in the economic growth rates of the major economies and in corporate profits.