Why the Dax is outperforming itself

Dax first time over 16. 000 Points dpa Because of the summer lull. Recently, many market observers and analysts had thought that the German benchmark index had already missed its powder last week. Since he was already climbing a lot and laying down from 15. 500 Points on round 15. 800 Points to.

Some even expected a small break-in afterwards. Because it is often the case that investors take their interim weekly profits with them after a major increase. Especially when the times are as uncertain as these days: The corona pandemic is gradually picking up speed again and is causing some doubts as to how long the current growth will continue. In addition, not much can generally be expected from the markets in the summer months. There is less trading, and none of this usually moves prices. And now that.

On Friday morning the Dax index cracked a new record. He rose to above 16. 25 points and broke through a psychologically important mark, from which many analysts up had thought that it would remain the upper limit of the index for a while in this changeable summer – because the stock markets are currently moving in a sawtooth pattern: one week up, one down, then another up. But now the trend seems to be continuing upwards for the time being. But how can that be?

There are mainly three Reasons that boost the German index:

1. The balance sheets are better than expected The balance sheet season is currently in full swing and more and more German companies are presenting their new quarterly figures and outlook for the current year. And they are actually better than expected. Last week, the figures from Siemens, Merck and Bayer created a positive mood on the stock market. They were also one of the main reasons for the previous week’s point gain. But the positive news didn’t stop this week either: at Deutsche Telekom, things are going very well again, the consumer goods manufacturer Henkel increased its sales forecast, the construction company Bilfinger also presented good data and the DAX newcomer Delivery Hero wants to continue growing with an acquisition abroad.

All this ensures a good mood the Frankfurt floor and led to the fact that quite a few investors did not – as feared – leave the market immediately after the good previous week. Instead, they took courage and even slightly increased their stocks.

2. The central banks are once again giving reason for hope Added to this is the optimism that blows over to us from America. The new US inflation figures have been available since Wednesday and they allayed one concern above all: the threat of an interest rate hike by the US Federal Reserve. Because the rate of price increases in the US remains high at 5.4 percent, but the emphasis is on “remains”. At least it doesn’t rise any further.

That Now gives many economists hope that the insane price increase could calm down a bit and was just a temporary phenomenon of the corona crisis. At the very least, if the inflation rate persists at this level, it is now more likely that the Fed will not continue to intervene more strictly in the market. She had already promised a tighter monetary policy and an expiry of the bond purchases, but not before next year at the earliest.

This is what the market has relied on so far. And he would like to continue to do so. But if the inflation rate rose faster than previously thought, then it would be more likely that the central bank would intervene prematurely. But with the numbers from Wednesday it doesn’t look like it. The fear of a sudden interest rate hike will continue to ebb for the time being.

In addition, the number of unemployed in the USA continues to fall. This shows that the economy is recovering permanently and is also growing steadily again. The recovery after the pandemic is in full swing – despite the delta variant that is currently spreading.

These two factors also clearly lifted the mood on Wall Street this week and the Dow Jones. The US leading index is now back at around 35. 500 points. And he prepared the tailwind for the German Dax in the second half of the week, so to speak.

3. The investors are increasing their European holdings A third push effect was provided by the valuations of European stocks. A number of analysts and institutional investors had clearly encouraged them to increase their holdings in European stocks in recent weeks. Because at the moment they are still lagging behind their American counterparts.

Most recently, the rising prices have led to the price-earnings ratios falling for all three indices, both for the American S&P 500 as well as the Eurostoxx and Dax. In comparison, however, it is noticeable that US stocks are still valued higher than the long-term average. Currently the P / E ratio is still above 16, normal in the longer term is a P / E ratio of 16. The Dax is now even far below the 20 he mark slipped. His P / E ratio is currently listed at 13. Even now in the boom phase, the Dax shares are still behind the long-term P / E ratio of the American shares.

The Eurostoxx 16: In April he came up with a P / E ratio from 50, in June / July the PER then corrected to 40, currently it is around 25. If you look at the 40 values ​​of the index, then around half of the companies come to a price / earnings ratio of over 20. The other half, however, is usually well below it. It is precisely these low valuations that are encouraging a number of investors to put a few more European stocks into their custody accounts. Because from this low level of the price / earnings ratio, companies are likely to quickly recover if the economy continues to recover. At the latest when you present your next quarterly figures. Therefore, the current P / E ratio almost urges entry.

And because many investors dared to increase this, the German Dax is now also pulling upwards.

The rally could continue for a while The big question is now: Does the Dax keep its level? And will the current summer rally go on for a while? It is very likely, at least for the next few weeks. Because if you look closely, one thing is currently noticeable: The Dax is rising – and after its rise it held up very well above the 16. 000 er brand. But who pushed it to this height at all?

The big winners of the day and thus the drivers of the Dax on Friday were Adidas (+2.5 percent), Siemens Energy (+1.5 percent), Deutsche Bank (+1, 37 percent) and Fresenius (+1.1 percent). So far so good, but what is really remarkable lies in those companies that have not (yet) participated in this upswing: Other Dax papers were still noticeably reticent. SAP only put 0, 08 percent, Volkswagen even slumped 0.1 percent, Siemens stepped on the spot. And it is precisely these companies that are the heavyweights in the index, which have a large market capitalization and therefore shape the leading index much more than many other smaller ones. If, in view of the currently good overall mood, they also start moving as latecomers, then things could go a good bit further upwards. Because of the summer lull.