Germany’s DAX Defies Economic Trouble with Record Highs

Germany’s DAX continues to defy expectations while flying high, hitting a new all-time high with a 1.57% gain on Monday, pushing it near the psychological 20,000 mark. Up an impressive 19% year-to-date, the DAX is Europe’s strongest performer, even as Germany grapples with stagnant growth and political uncertainty.  

Globally, the DAX is being buoyed by momentum on a par with Wall Street, with the S&P 500 climbing 27% and China’s A50 up 15%. However, broader European indices are lagging behind. The STOXX is up only 7%, while France’s CAC 40 is in negative growth territory. The DAX’s success comes largely from booming technology, financial, and industrial sectors.  

Tech giant SAP, a star performer, has surged 65% this year, securing its spot as Europe’s largest tech firm and the second-largest company overall, with a market valuation of €278.63 billion. SAP’s strong Q3 earnings and focus on AI innovation have fueled this growth. Industrial standouts Siemens Energy and Rheinmetall AG have seen even more dramatic increases, with shares up 328% and 117%, respectively.  

What Does This Mean for Me?

Financial stocks are also on a major high, with Deutsche Bank shares up 26% year-to-date, benefiting from the European Central Bank’s (ECB) relatively low rates and liquidity support. Meanwhile, the defence and industrial sectors are thriving on increased spending in Europe and the US.  

However, Germany’s auto giants are struggling. Volkswagen has plunged 28%, Porsche AG is down 26%, and Mercedes-Benz has fallen 15% this year, hit by inflation, Chinese competition, and high energy costs.