Stock market topic of the week: Dax on record course - how is this possible?

The Dax has gained almost 20 percent since its annual low in March and almost 100 percent in the past four years. In the past week, it reached its 15th all-time high this year.

After many new records in recent weeks, there are good reasons to expect a correction soon, also because August and September are traditionally weak months for the stock market. However, there are five strong arguments for the Dax's good performance.

First: The global economy is growing robustly, with around three percent growth this year. As long as the economic recovery led by the US continues, German stocks have good chances. This is based on the view that Dax companies are less dependent on the German economy and strongly on the global economy.

80 percent of their sales are generated by German companies abroad. The most important individual market is the US, with a sales share of just over 23 percent. This means that the chronically weak growth in the domestic market hardly has any impact.

Second: The Dax benefits from its many internationally strong industrial companies such as Siemens, Siemens Energy, Merck, Infineon and DHL from the AI boom and global investment cycle, especially in data centers.

This involves pre-products for microchips and power semiconductors, as well as the transport of servers, computers and cooling systems.

Third: The Russian war of aggression in Ukraine is playing hardly any role in the financial markets as long as the conflict between the two countries remains limited. A peace agreement is still far away, but US President Donald Trump is moving more in this war than his predecessor Joe Biden and also more than the Europeans.

If a peace agreement were to be reached at some point, there is a lot of potential in the country to rebuild the destroyed infrastructure. This would likely benefit German industrial corporations with a strong international presence - and there are many of them in the Dax.

Fourth: The war in Iran has driven up oil prices, but only temporarily. There is enough oil worldwide to keep prices from remaining high permanently. This is ensured above all by the USA, as Donald Trump is fully committed to fossil fuels and drives up production quotas.

Fifth: The record prices are covered by the good earnings development of the Dax companies. Twelve corporations have raised their annual forecasts in recent weeks. Analysts at home and abroad predict on average that the Dax corporations will earn more than ever in 2026 and surpass their previous record result from 2021.

At that time, BMW, Mercedes and VW earned around 50 billion euros, but this year it will be less than 20 billion euros. However, the automakers are hardly playing a role in the stock market anymore. Their stock prices have fallen so sharply over the past decade that it is now simply irrelevant to the overall Dax whether the prices continue to fall or not.

BMW, Mercedes and VW are worth a total of 118 billion euros, after they were worth almost 300 billion euros in their best times in 2015. The three automakers currently have a stock market weight of 5.5 percent in the entire Dax. Eleven years ago, it was 23 percent.

Other stocks are driving the Dax even more. Airbus, Allianz, Deutsche Telekom, SAP and Siemens are each more valuable and therefore more important for the Dax than all three automakers combined.