DAX soaring despite fears of recession – what will happen next for the leading index in 2024?

DAX soaring despite fears of recession – what will happen next for the leading index in 2024?

According to a report by courier.at,
The German leading index DAX and the US tech index Nasdaq have shown brilliant performances recently. The DAX has recorded an increase of 15 percent since the beginning of the year, while the Nasdaq even gained 47 percent. Although the situation for DAX-listed companies has worsened, corporate profits are expected to rise again in 2024. Tech stocks thrive on the hype surrounding artificial intelligence and the high demand for microchips.

Compared to other indices such as the Nasdaq and due to the weakness in the automotive industry, the DAX is currently valued very low. The car values ​​are dragging the DAX down, which is reflected in a P/E ratio of currently 10.3. A fair valuation would require the DAX to rise to around 19,000 points or corporate profits to fall.

Corporate profits in the MSCI World stock index and the Nasdaq are expected to bubble up again in 2024. Analysts expect an increase of almost ten percent at MSCI World and around 17 percent at Nasdaq. Europe is lagging a bit behind here because the framework conditions are said to be too narrow.

These developments show that the market, especially the tech stocks and automotive sectors, continue to be influenced by various factors. The level of expected corporate profits plays a crucial role and allows conclusions to be drawn about the future development of the indices.