DAX Outlook, June 2024 Update

A period of over-optimism is upon us, but some cold showers will come

Here we go again. The first quarter of 2024 had ended on a positive note in both January, February and March. Some signs of a crunch came in April with the DAX and markets in general closing with a minus sign: German index closed -3.03% causing severe pain to leveraged buyers in equities. Once the fear passed, we picked up where left off, which was by buying like there was no tomorrow: again «Sell In May» failed, delivering a positive performance on the major stock markets, including DAX Index (+3.15%). +10.42% since the beginning of the year, yet another kick in the can on buying tech and defensive stocks. So what to expect in June? Let's dig in.

DAX Index soars to all-time highs, taking annual growth into double digits: +10% | Dax Trading Ideas ®

Ci risiamo. Il primo trimestre del 2024 si era concluso con il segno positivo sia a Gennaio, Febbraio che a Marzo. Qualche segnale di scricchiolio è arrivato ad Aprile con il DAX e i mercati in generale che hanno chiuso con il segno meno: l’indice tedesco chiuse -3,03% provocando forti dolori ai compratori a leva sull’azionario. Passata la paura, si è ricominciato da dove avevamo lasciato, ovvero comprando come se non ci fosse un domani: anche questa volta il Sell In May ha fallito, realizzando una performance positiva sui principali listini azionari, compreso l’Indice DAX (+3,15%). +10,42% da inizio anno, l’ennesimo calcio al barattolo su a comprare titoli tecnologici e difensivi. Cosa aspettarci quindi a Giugno? Scaviamo a fondo.

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Contextual Analysis

Global markets have behaved very differently over the past period. US/Europe spread widened even further, allowing technology sector in particular to outperform. Old economy drew its breath as financials continued their mad bullish run despite the European Central Bank starting interest rate cut and consequently the part from which the bulk of all profits made by the banks in recent years are derived.

Nasdaq and S&P500 have recently updated new all-time highs while DAX Index and EuroStoxx50 are trudging along while clinging to all-time highs. The situation is different for Japan: BOJ and monetary policy decisions will influence the next steps of investors in the Rising Sun in no small way: experiment is coming to an end and in the worst way, a sign that those who try to defy the laws of physics pay the price, even in the financial markets.