This means that just over 10 years have passed since the 10,000 points were exceeded for the first time in June 2014. Calculated on an annualized basis, this means an average performance of around 7.2 % for this period, which underlines the attractiveness of a long-term investment in equities. However, this return is slightly below the historical average annual return of the DAX of around 8.5 %. Compared to the DAX, the US markets have performed significantly better over the last 10 years. Over the same period, the Dow Jones, which rose from 16,836 to 44,643 points, achieved an average annual return of just under 10 %, while the S&P 500, which rose from 1,940 to 6,090 points, recorded an impressive average annual return of almost 12 %. And this is just the price increase excluding dividends. The Dow Jones and S&P 500 do not include dividends in the index calculation, whereas the DAX is a so-called performance index that includes dividend payments.<\/p>\n\n\n\n
<\/a>Market environment remains positive<\/h2>\n\n\n\nThe DAX is currently continuing to benefit from a generally positive macroeconomic market environment and positive sentiment among investors. The prospect of interest rate cuts in the USA and the eurozone has encouraged investors to invest more capital in equities, which has significantly increased demand on the markets. In addition, strong economic data from the USA and an increasing stabilization of energy prices are supporting the general market situation.<\/p>\n\n\n\n
<\/a>DAX defies weak domestic economic data<\/h2>\n\n\n\nCurrent economic data from Germany, on the other hand, paints a rather gloomy picture: GDP rose by just 0.1 % in the third quarter of 2024 compared to the previous quarter, after falling by 0.3 % in the second quarter. Industrial production fell by 1.0 % in October compared to the previous month, marking the second consecutive decline after a drop of 2.0 % was reported in September. The labor market is also showing signs of weakness, with an unemployment rate of 5.9 % in November 2024, which corresponds to 2.79 million unemployed and represents an increase of 168,000 people compared to the previous year.<\/p>\n\n\n\n
Despite the recent weak economic and labor market data from Germany, the DAX continued to rise. One important reason for this is the international orientation of many companies, which generate a large proportion of their sales and profits abroad. DAX companies only generate just under a fifth of their turnover in Germany, while around a quarter of their revenue comes from North America.<\/p>\n\n\n\n
Global diversification at least protects the large DAX companies from the weak domestic economy in Germany. In the second and third tiers, however, the situation is somewhat different. The MDAX and SDAX have been lagging behind the DAX for more than two years and are still trading well below their all-time highs.<\/p>\n\n\n\n
<\/a>DAX reaches upper trend channel line<\/h2>\n\n\n\nAfter the DAX managed to break out of its multi-month consolidation phase in September, a textbook pullback to the breakout level of 18,800 - 18,900 points, including the weekly EMA 20, followed in the subsequent weeks. The rally started from this price area, catapulting the index to the upper trend channel boundary line last week. In addition, the DAX broke above the upper Bollinger band, which is seen as a further trend-confirming signal.<\/p>\n\n\n\n![\"DAX](\"https:\/\/www.captrader.com\/wp-content\/uploads\/2024\/12\/word-image-57159-1.png\")
<\/figure>\n\n\n\nDAX Index weekly chart<\/p>\n\n\n\n
Both the fundamental outlook and the technical chart suggest that the bull market will continue in the medium term. Since the start of the upward trend in fall 2022, a \"buy the dip\" strategy has proven its worth. As long as the underlying scenario remains bullish, this strategy should be adhered to. Anyone who goes against the trend in such a strong market will sooner or later be overrun by it. Therefore, remain patient, the next correction is sure to come.<\/p>\n\n\n\n
Current economic data from Germany, on the other hand, paints a rather gloomy picture: GDP rose by just 0.1 % in the third quarter of 2024 compared to the previous quarter, after falling by 0.3 % in the second quarter. Industrial production fell by 1.0 % in October compared to the previous month, marking the second consecutive decline after a drop of 2.0 % was reported in September. The labor market is also showing signs of weakness, with an unemployment rate of 5.9 % in November 2024, which corresponds to 2.79 million unemployed and represents an increase of 168,000 people compared to the previous year.<\/p>\n\n\n\n
Despite the recent weak economic and labor market data from Germany, the DAX continued to rise. One important reason for this is the international orientation of many companies, which generate a large proportion of their sales and profits abroad. DAX companies only generate just under a fifth of their turnover in Germany, while around a quarter of their revenue comes from North America.<\/p>\n\n\n\n
Global diversification at least protects the large DAX companies from the weak domestic economy in Germany. In the second and third tiers, however, the situation is somewhat different. The MDAX and SDAX have been lagging behind the DAX for more than two years and are still trading well below their all-time highs.<\/p>\n\n\n\n
<\/a>DAX reaches upper trend channel line<\/h2>\n\n\n\nAfter the DAX managed to break out of its multi-month consolidation phase in September, a textbook pullback to the breakout level of 18,800 - 18,900 points, including the weekly EMA 20, followed in the subsequent weeks. The rally started from this price area, catapulting the index to the upper trend channel boundary line last week. In addition, the DAX broke above the upper Bollinger band, which is seen as a further trend-confirming signal.<\/p>\n\n\n\n<\/figure>\n\n\n\nDAX Index weekly chart<\/p>\n\n\n\n
Both the fundamental outlook and the technical chart suggest that the bull market will continue in the medium term. Since the start of the upward trend in fall 2022, a \"buy the dip\" strategy has proven its worth. As long as the underlying scenario remains bullish, this strategy should be adhered to. Anyone who goes against the trend in such a strong market will sooner or later be overrun by it. Therefore, remain patient, the next correction is sure to come.<\/p>\n\n\n\n
<\/figure>\n\n\n\nDAX Index weekly chart<\/p>\n\n\n\n
Both the fundamental outlook and the technical chart suggest that the bull market will continue in the medium term. Since the start of the upward trend in fall 2022, a \"buy the dip\" strategy has proven its worth. As long as the underlying scenario remains bullish, this strategy should be adhered to. Anyone who goes against the trend in such a strong market will sooner or later be overrun by it. Therefore, remain patient, the next correction is sure to come.<\/p>\n\n\n\n