Everything still speaks for a continuation of the rally

Dax curve

All of the factors that triggered the extraordinary gains in November remain intact.


(Photo: dpa)

Frankfurt The closed stock market trading week ended with a bang on Wall Street: important indices such as the Dow Jones, S&P 500 and the Nasdaq Composite ended at record levels after moderate daily gains. Behind this were growing hopes that an economic aid package could still be put together by the Democrats and Republicans in Washington. These expectations were supported by weak labor market data on the same day.

The new top stands can also stimulate the German stock market further. The German leading index Dax has had a little turbulent and almost boring week, but the weekly loss of 0.3 percent suppresses the most important part of the truth: The quiet trading days followed a spectacular November, in which the Dax gained 15 percent.

Therefore, in the eyes of experts, what happens in the first week of December should be understood as taking a breath and taking a deep breath. All those factors that triggered the extraordinary profits in the previous month are intact: The outlook for corona vaccines is reviving economic hopes, the Brexit issue has now been shelved by investors and low interest rates are considered to be cemented for a long time.

For these reasons, DZ Bank analyst Stephen Schneider comes to the conclusion in his current outlook: “The Dax can crack its all-time high at the end of next year and reach 14,000 points. Overall, the investment year 2021 will be a good year. ”Based on the current DAX level, the above level would correspond to a plus of five percent. Optimists like the well-known fund manager Jens Ehrhardt go much further. The founder of the asset management company DJE Kapital had already mentioned the 16,000 point mark a few months ago.

The prospects for a vaccine and, above all, the very friendly central bank policies should ensure good development. Because of the ultra-expansionary monetary policy, there is a lot of liquidity on the market that has to be invested. DZ-Bank expert Hartmut Preiß predicts: “The search for returns should come to the fore again and lead to a further increasing risk appetite of investors.”

The bank’s experts are looking even further ahead. Successful virus containment benefits the economy – and more than that. “Even a post-corona boom scenario does not appear to be ruled out,” estimates Schneider.

Corporate earnings are expected to grow significantly in 2021 and 2022. In addition to the stock exchange favorites from the technology and biotech sectors, which were already in demand, cyclical stocks also came into focus again, also driven by the good economic activity in China and Japan. “This would be good news for the companies in the Dax, which lacks tech figureheads,” says Schneider.

Jens Ehrhardt relies on stocks from these industries

Jens Ehrhardt, one of the best-known German fund managers, is similarly optimistic. The founder of the asset manager DJE Kapital expects a comeback of the low-valued, so-called value stocks. “With their high dividends, utilities are a real alternative to fixed-income papers, as they were in the best bond days,” he says. Chemical stocks should particularly benefit from the coming economic upturn.

Telekom shares are particularly unpopular with investors. Ehrhardt sees a far better perspective for the values: “Here the dividend yields are also extremely attractive, and growth can be expected here in the digital age.” If the central banks keep interest rates really low for the foreseeable future, then many value stocks are out from this point of view “grossly undervalued”.

Ehrhardt recognizes December purely statistically as the month with the highest price increases – only exceeded by April. Only the optimism of investors makes him a little cautious. The idea behind this is that optimists have already bought stocks. They are therefore no longer available for future purchases and thus as additional price drivers.

Robert Rethfeld from Wellenreiter Invest also registered exceptional levels of the corresponding sentiment indicators. In the most important financial center in the world, Wall Street, the fund managers are very “expectant”.

Euphoria like in the days of the internet bubble

The ratio of put to buy options for US standard stocks has reached an extreme level overseas. Rethfeld recognizes this euphoria to an extent that was only normal in the boom years 1998 to 2000. It was only in this phase that bets on falling prices were so unpopular compared to bets on rising prices. As a reminder: In the spring of 2000, the Internet stock bubble burst.

Euphoria is seen as a warning sign that prices will soon fall again. Because when the mood is euphoric, everyone has bought and there are hardly any investors who can then stop falling prices.

However, the experts do not want to derive an imminent danger from such analyzes – on the contrary. Rethfeld says: “These conditions can last for several months or even years without breaking the upward trend.” Ehrhardt assesses the very good investor sentiment as follows: “Such optimism can last longer, especially when the central bank gives a strong tailwind and the The stock market trend – like today – is pointing upwards. “

These dates will be important in the next week

Beyond the strategic considerations on the state of the markets, economic data will be released in the new week that can reflect on the generally positive stock trend:

The data on industrial production for Germany are due on Monday. The ZEW economic expectations will be published on Tuesday. In view of the noticeably falling number of new infections in many European countries, a decline in sentiment in December could possibly be avoided, the experts at BayernLB estimate.

The US consumer prices for November will also be published on Thursday. US consumer confidence data will follow on Friday.

The highlight of the week is likely to be the meeting of the European Central Bank (ECB) on Thursday. According to BayernLB experts, an expansion of the rescue programs seems to be a foregone conclusion. Now it is about the specific details, such as increases in aid and refinancing relief for banks.

More: Twelve stocks that score with top dividends over the long term

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