Market report: DAX is stalking its record high
The leading German index benefits from positive company reports and optimistic growth forecasts from economists.
Quick Look
- The DAX rose by 1.2 percent to 26,662.77 points and is approaching its record high.
- Optimistic growth forecasts from economists and strong quarterly figures from Siemens Energy supported the market despite ongoing interest rate concerns.
AI-generated summary
Why It Matters
The DAX reached a historic record high of 26,692 points last week. Economists have raised their growth forecasts for Germany for the first time since 2022.
Stock market trading ends in the middle of the week with a green sign. The DAX gained 1.2 percent to 26,662.77 points by the end of trading. This is the third positive trading day in a row. This means that the record high from the previous week is within reach again. Last Thursday, the DAX reached 26,692 points, the highest level in its history.
“Interest rate concerns and AI hopes are balanced,” said Andreas Lipkow, chief market analyst at CMC Markets, summarizing the situation. Unexpectedly high US inflation data cemented expectations of an interest rate hike by the US Federal Reserve next month.
The so-called economists, the federal government's most important economic advisors, have ensured optimism: for the first time since 2022, they expect noticeable economic growth for Germany and have raised their previous forecasts accordingly.
Despite higher energy prices, the gross domestic product (GDP) will rise by 1.3 percent this year and increase by a further 1.0 percent in 2027, the economists said in their annual report. Exports and consumption in particular are likely to contribute to this.
However, the five economists also predict a noticeable increase in inflation for Germany. Annual inflation is expected to climb from 2.2 percent last year to 2.8 percent and even accelerate to 3.3 percent in 2027.
In New York, the stock indices are also rising - the Nasdaq technology index by 2.5 percent, while the values of the S&P 500 rose by 1.2 percent to 7,611 points. The Dow Jones was recently unchanged.
There was positive news from the AI industry: US cloud provider CoreWeave exceeded expectations with its quarterly sales, dampening concerns about a possible decline in demand for artificial intelligence (AI) infrastructure.
Meanwhile, Nvidia shares are also recovering from the espionage affair surrounding their boss Jensen Huang. Shares plummeted after news broke that Huang was having an affair with a suspected Chinese spy. The investigations into this are ongoing.
Positive news came from companies in Germany during the reporting season: utilities RWE and E.On confirmed that they are on track for their annual targets. Both had previously reported increases in profits for the first nine months. However, the price reactions were opposite. RWE shares rose, E.On shares fell.
The strongest stock in the DAX was Siemens Energy. The energy technology group reported record sales and profits for its fiscal year that ended in September. He is now tripling the dividend and buying back his own shares.
Open Questions
- How will US interest rates develop next month?
- How is the investigation going in the Nvidia/Huang case?
