After a sharp rise in March, the Dax also started April with new records. VW has overtaken SAP on the stock exchange as the most valuable German company. The warning signs cannot be overlooked.
AIn the stock exchange it’s going. At the beginning of March, the Dax pushed away from the record level of at least 14,000 points it had just conquered and jumped to more than 15,000 points at the end of March without major setbacks, a monthly plus of 9 percent. The first day of trading in April also brought further gains up to 15110 points in the course of trading. It looks as if almost nothing could throw the Dax off track at the moment.
There are certainly disruptive factors for the stock exchanges: A container trading ship blocking the Suez Canal for days, the extension of the lockdown in Germany and France, rising bond yields paired with inflation concerns and billions in the forced sale of shares by the family office Archegos, which is similar to a hedge fund. The fact that none of these events stopped the Dax speaks for a robust market situation.
While chip stocks are in demand at the beginning of the new month of April, the winners in March were German automobile stocks, long spurned by investors. Volkswagen leads the list of monthly winners with a 38 percent gain, BMW follows in second place of the 30 DAX values with a 24 percent increase.
VW in particular showed strength: the dividend remained constant and planning for six battery factories in Europe has begun. With this news, VW even overtook the software manufacturer SAP as the most valuable German company on the stock exchange.
At the same time, the economic upturn in the important sales market of China is slowing. At least the mood of purchasing managers has reached a nine-month low. But now the US economy is starting to recover, driven by huge government stimulus packages. The German Ifo business climate index is also showing surprising strength, from which the stock markets are benefiting.
In the United States, too, the stock indices are at record highs again, although at least the Nasdaq had to accept a correction of 10 percent in March. The boom with empty corporate hulls (Spac), which are placed on stock exchanges and bought “blindly” by investors before a company is bought from Spac with their money, reveals an unpleasant euphoria. The SEC has launched an investigation against Spacs.
Investors should also remain vigilant: as long as the Dax is moving upwards like a string, you should stay invested. But if you need money in the near future, you should also think about realizing profits. There are currently some warning signals on the stock exchange, even if the doorbell never rings to exit.