Financial Markets Recap 2024
Dax Experiences Minor Decrease, Projected 2024 Performance Stands at 18.8 Percentage Reduction
The closing bell of 2024 saw the German benchmark index, Dax, ending slightly below the 20,000-point mark, losing 0.4% on the last trading day of the year. Despite this, the Dax has had an impressive year-to-date gain of 18.8%, making it the top performer amid other major European exchanges.
In stark contrast, the MDax and SDax underperformed, with the MDax suffering an over 5% YTD loss, and the SDax in the red for the entire year.
The year 2024 was marked by falling interest rates on both sides of the Atlantic and the hype surrounding Artificial Intelligence (AI), providing significant catalysts, particularly for tech stocks.
Siemens Healthineers took a hit, with the Munich-tech firm questioning the synergies with their medical technology subsidiary. As CFO Ralf Thomas explained to Handelsblatt, the 75% Siemens AG stake is worth a whopping 45 billion euros, and a possible sale could put slight pressure on the stock.
Among the year's top performers is Siemens Energy, with a stunning 319% YTD gain, due to high demand for grid technology, a successful gas business, and advancements in restructuring. SAP also made the list with a year-to-date gain nearly 70%, propelled by the AI hype.
Meanwhile, Baywa saw nearly a 17% rise after finalizing a restructuring concept with key creditor banks and shareholders by the end of 2027, aimed at downsizing and offloading foreign assets. Despite this, Baywa still faced a YTD loss of over 66%.
Gold prices soared by 26.8% this year, reaching 2,615.49 dollars per fine ounce, making it another winner for 2024. On the bond market, the yield for ten-year German government bonds rose from 2.03% at the end of 2023 to the current 2.39%, while the yield for ten-year US Treasuries rose even more sharply, from 3.91% to 4.59%.
The euro slid more than 5% against the dollar in 2024, with the widening interest rate differentials driving the dollar to a gain of 6.5% against major currencies. As we step into 2025, investors anticipate challenges: the continued "America First" strategy in Washington, a sluggish Chinese economy, and the impact of a potential political realignment in Germany on the Dax.
Market analyst Jürgen Molnar from Robomarkets expressed hope that renewed optimism and dynamism following the realignment could balance the US strategy and result in a Dax gain at the end of the year. Whether this optimism will also spill into the second and third tiers of the German stock market remains to be seen. Stay tuned for the rollercoaster ride that is financial markets in 2025!
Potential influences on the German stock market, including the Dax and its tiers, MDAX and SDAX, specific companies like Siemens Healthineers, Siemens Energy, SAP, and Baywa, and gold, can be rooted in a variety of factors such as industry trends, economic indicators, government policies, competition, and advances in technology.
- In 2025, market analyst Jürgen Molnar from Robomarkets anticipates renewed optimism and dynamism following a potential political realignment in Germany, which could lead to a Dax gain by the end of the year.
- Despite Siemens Healthineers taking a hit in 2024, Siemens Energy emerged as a top performer with a stunning 319% YTD gain, due to high demand for grid technology, a successful gas business, and advancements in restructuring.
- SAP also made the list of top performers in 2024, with a year-to-date gain nearly 70%, propelled by the hype surrounding Artificial Intelligence (AI).
- Among the German stock market tiers, the Dax is worth a whopping 45 billion euros due to Siemens AG's 75% stake, and a possible sale could put slight pressure on the stock, as CFO Ralf Thomas explained to Handelsblatt.
