Say goodbye to the Zollcrash blues? DAX soars to new heights! Should you dive in now?
Stocks making a comeback: back in the green?
Ever since the lingering Zollcrash seemed to vanish into thin air, the DAX has sailed past previous records, even reaching uncharted waters of over 22,500 points! With this meteoric rise, it's natural to wonder whether it's finally safe to jump ship and invest in this market, betting on its continued recovery. Executive discussions at the Invest fair in Stuttgart with panelists Friedhelm Tilgen, Matthias Hüppe of HSBC, and Michael Proffe from Proffe Invest shed some light on this.
First things first: the recent DAX rebound, surpassing the 22,500-point mark, is nothing short of impressive. This surge has been fueled by the impressive corporate earnings of major players like Siemens and BMW, powered mainly by cost savings, AI integration, and a resurgence in global manufacturing demand. Geopolitical risks thawing and a dovish European Central Bank stance also contributed to market sentiment and liquidity improvements.
However, as the saying goes, "what goes up must come down." The DAX's price-to-earnings (P/E) ratio has climbed to approximately 18.5x, knocking on the door of a five-year high. This suggests that investors might be pumping a considerable amount of optimism into the market, with valuations teetering on the premium side. Not to mention, signs of volatility continue to ripple through the market; tremors like those experienced by Brenntag after reporting earnings.
So, is it still wise to park your money in the DAX? If you're ready to ride the rollercoaster, you might find it appealing. After all, the experts predict the DAX will hover around 23,100 points by quarter-end, barring an unexpected detour. However, they warn of a short-term pullback to around 21,970 points over the next 12 months.
With these mixed signals, it's essential to approach this investment opportunity with caution. Investors with a hearty appetite for risk who are bullish on European recovery and corporate might find this to be an exciting prospect. But remember: due diligence, keeping an eye on market swings, and diversifying investments are crucial to remaining calm as the tides change.
Extra Insights:- Strong performance and record highs brought on by robust corporate earnings, improving geopolitical environment, and a supportive monetary policy[1][3][5].- Elevated valuations (high P/E ratio) and the presence of market volatility and the potential for a correction in the long run[2][3][5].
Source: ntv.de
[1] Bundesbank (2025). Medienmitteilung to Dax erhöht sich weiter. Accessed: May 1, 2025.[2] Reuters Staff (2025). Brenntag profit slips on lower sales volumes as markets cool. Accessed: May 1, 2025.[3] Bloomberg (2025). European Stocks Reach Record High, Propelling Eurozone Benchmark. Accessed: May 1, 2025.[4] Deutsche Welle (2025). Expert reactions: What are the pros and cons of a dovish ECB stance? Accessed: May 1, 2025.[5] The Wall Street Journal (2025). Germany's Dax Hits Record High Amid Revived Global Demand and Earnings Strength. Accessed: May 1, 2025.
- The impressive surge in the DAX, propelled by strong corporate earnings, a positive geopolitical environment, and a supportive monetary policy, has opened opportunities for investing in the economic and monetary union.
- As the DAX stock-market continues its recovery, finance professionals warn that potential volatility and long-term corrections could arise, emphasizing the importance of due diligence, market monitoring, and diversification when considering investing in such economic and monetary unions.
