DThe guidelines from New York made it clear: On Thursday morning, the DAX made a joyful jump to more than 17,000 points for the first time. It has always been a historic moment when a new thousand was taken. The last time this happened was in 2021, when three brands of 14,000, 15,000 and 16,000 were broken after the Corona shock. It had taken almost four years from 13,000 in 2017 to 14,000. From the 12,000 in spring 2015 it took at least two and a half years to reach 13,000. How soon will the next thousand come? On Thursday afternoon it went back into the red to 16,700 points.
Most market observers are cautiously optimistic. This means: Nobody dares to predict big price jumps, and price drops anyway. Sven Streibel, chief equity strategist at DZ Bank, has recently repeatedly dared to be the greatest optimist and also put the number 17,000 into the room early on. His current price target of 17,500 points for the coming year has not been cemented. It's quite possible that an 18,000 could also appear. Overheated courses? Too much optimism in the market? Profit expectations too high? He does not share the concerns of the skeptics: “Excessive pessimism is currently being reduced,” is how he interprets the price development. “We don’t share the constant talk of a recession in America and we don’t expect one next year either,” says Streibel.
The world's largest economy will emerge from 2023 with more than 2 percent growth – far from a recession. DZ Bank expects a 1.5 percent increase next year. For China it is a good 4 percent. “We see a bottoming out there in many areas, in retail and industrial production, for example.” After a weak phase in the global economy this year, the experts at the Central Institute of Volks- und Raiffeisenbanken are expecting a slight upswing in 2024, also in Germany.
The look at auto stocks is more controversial
Streibel did an analysis for the Dax, which he presented exclusively to the FAZ. He has selected the sectors in the Dax whose profit forecasts he considers to be particularly well protected against the downside. It comes from 14 of the 40 DAX companies. What may seem little at first glance turns out to be 84 percent of company earnings per share in the Dax, as this includes heavyweights such as SAP, Siemens, the automotive industry and the insurance industry.
“Insurers are investing their premiums in a highly profitable manner in the continued high interest rate environment,” says Streibel. “In addition, the companies have a good negotiating position when it comes to upcoming premium increases.” The view of auto stocks, which have been battered for years, may be more controversial: “I know this industry polarizes investors, but these stocks took part in the recent Dax rally,” says Streibel . “Luxury is doing better than expected, especially in China.” He also points to the high investment budgets of car manufacturers in order to catch up with trends such as e-mobility, as well as the full coffers of companies and the high dividend yields that Mercedes and BMW currently have be more than 8 percent. “And the valuation of European auto stocks remains hair-raisingly low, with a price-to-book ratio of under 0.8. Put bluntly, investors currently see more returns from liquidating factories than from future sales of products.”
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