Rockin' the DAX: Breaking Past the 24K Mark
By Werner Ruppel
Unjustified Overindulgence Avoided
Stepping aside the naysayers, the DAX index has cracked the 24,000-point barrier for the first time ever and registered astonishing gains of over 20% this year. With this performance, the German benchmark index leaves the U.S. stock market sulking in its wake, leaving onlookers questioning how such a feat could occur amid the hardships of Trump's trade policies and a tapering German economy. Isn't this reminiscent of the financial wiz-kid, Alan Greenspan's famous quote, "irrational exuberance"?
Now, let me break it down.
First, consider the economic climate. Germany has been feeling the heat, dealing with sluggish growth and trade policy uncertainties. Shouldn't this squeeze the equity valuations, not prop them up?
Still, the DAX displays remarkable resilience. Despite the challenges, it struts its stuff at historic highs around 24,000 points in late May to early June 2025. Forecasters predict it'll continue to meander past those heady heights, supposedly touching around 25,000 by 2027, with even more milestones down the road[1][3]. This read-out suggests investors are more bullish about the future than they are concerned about the present.
Analysts take a cautious approach though. Recent market data reveal a dash of nervousness and some profit-taking, so it appears this surge isn't a manic response to unbridled enthusiasm[4].
Next, we need to look at the global picture. Global analyst predictions suggest the DAX might stabilize or experience a modest correction in the near term, pointing to a market calibrated to risks, rather than one intent on ignoring them[1].
To wrap things up, although the DAX passing 24,000 points amid trade tensions and a waning German economy may shock the senses at first glance, the analysis leads us to believe investors are banking on a solid rebound and corporate earnings gains instead of simply indulging in a speculative bubble. So, rather than irrational exuberance, it's more reasonable to describe the surge as an outlook loaded with self-assured optimism.
Investors, despite the challenges faced by Germany's economy and trade policies, are demonstrating a bullish approach towards the stock-market, as they expect a solid rebound and corporate earnings gains for the DAX, which has surpassed 24,000 points. Forecasts predict the index will continue to touch new highs in the future, even though analysts are cautiously optimistic due to some signs of nervousness and profit-taking in the market.
