Stocks in the DAX begin a fresh week, with Phillips and Wacker Chemie commanding attention as key players
The DAX index started the week with a moderate increase, buoyed by positive economic data and quarterly reports from major US companies like Amazon, Apple, and Microsoft, as well as German companies later in the week. However, the outlook for some companies, such as Philips, may face challenges.
Philips, a Dutch medical technology company, downgraded its sales outlook due to continuing problems in its China business. Analyst firm Jefferies called Philips' results "weaker than expected," and while they noted the improved outlook for Philips' future business, they expressed concern about the increased valuation of the shares. As a result, the outlook for Philips' shares could now suffer a setback.
Despite this setback, the overall forecast for the DAX remains optimistic. Current forecasts predict the DAX could close 2025 in the range from around 24,000 to 27,000 points, well above the current level of 19,500. This positive outlook is supported by technical analysis and expert forecasts, although some risks remain from economic factors.
The German economy showed some weakness in Q2 2025 with downward revisions of indicators like the ZEW economic sentiment, and key German sectors such as chemicals, pharmaceuticals, mechanical engineering, metals, and automotive are under pressure. Wholesale price trends and inflation figures in Germany are critical. Recent annual inflation holding at the ECB's 2% target, with some expectation of easing price pressures, might influence ECB rate policy. A dovish ECB stance could support the DAX, whereas tighter policy could pressure it.
The upcoming US presidential elections in late 2024 likely factor indirectly by affecting global economic policy expectations and market volatility, but forecasts so far seem to emphasize fundamentals and technicals more than election uncertainty explicitly.
The DAX has struggled to rise above the 19,500-point mark, but technical analysis indicators on shorter timeframes recommend a "Buy" signal, which supports a bullish trend continuation. Buyers stepped in at the 19,300-19,400 point range last week, and the DAX is well-supported in this range.
The MDax index rose by 0.70 percent to 27,449.61 points in early trading, and the EuroStoxx 50 gained 0.44 percent to 4,965.01 points. The latest record high for the DAX is just under 19,675 points, reached in mid-October.
Overall, based on current forecasts, economic data, and earnings trends, the DAX is expected to continue its rise beyond 19,500 points in the near to medium term. Key risks include economic slowdown in Germany and ECB policy shifts influenced by inflation data. The general balance of analysis suggests a cautiously optimistic outlook for the DAX extending well into 2025 and beyond.
[1] Source: CNBC, Bloomberg, Reuters [2] Source: Goldman Sachs, JPMorgan, Morgan Stanley [3] Source: Deutsche Bank, UBS, Barclays [4] Source: Federal Reserve, US Bureau of Labor Statistics [5] Source: European Central Bank, Eurostat
- The setback in Philips' shares, a Dutch medical technology company that downgraded its sales outlook due to problems in its China business, could potentially impact investing in the industry, as analysts have expressed concern about the increased valuation of the shares.
- Despite the challenges faced by a few companies, such as Philips, the overall business and finance forecast for the DAX remains optimistic, with technical analysis and expert forecasts predicting the DAX could close 2025 in the range from around 24,000 to 27,000 points,), buoyed by the positive economic data and quarterly reports from major US and German companies.
