Despite the geopolitical upheavals, European markets have been rising in recent days. The Dax index exceeded 24,000 units for the first time. Just a few weeks have passed since the big dip in international stock markets after the trade war launched by Donald Trump. Suddenly, the indicators not only recover, but sometimes they also record a new record. Reuters speaks of a “party” on European stock markets.

The Frankfurt Stock Exchange lives unique, as the DAX (high capitalization) index exceeded 24,000 points on Tuesday morning and had a new record in Monday’s meeting, closing at 23,935 points. Thus, DAX compensates with the above the “dive” of last April, recording a 23%rise.

‘A series of factors’

Market analysts tell the German News Agency (DPA) that market recovery is due to a number of factors that are not only related to geopolitical developments but also to micro -economy. Some of them: Many hope for a compromise in the US trade war with Europe and China. Concern after MoodyËŠs has downgraded the US economy, but does not paralyze economic activity. Many businesses are believed to have positive financial results for the second quarter of this year. Inflation recedes on critical fronts. Growth indicators may not take off, but at least remain stable. Central banks’ decisions do not create disincentives for the Stock Exchange.

The other reading says that at least part of the “party” is not due to the optimistic disposition of investors, but (on the contrary, one would say …) in their decision to proceed with liquidations, ensuring short -term profits in view of future turmoil. As Precious Metals Trader Alexander Chubf points out in Reuters, this trend is also observed in raw materials. “Markets are waiting until there is clarity in the tariff policy and the attitude of central banks, so some investors prefer to liquidate their positions,” the German analyst explains.

Otherwise… judgment

The “party” on the Frankfurt Stock Exchange is obviously incompatible with the recession, in which the German economy has sank. But as analysts point out in the DPA agency, there is an explanation: First of all the Stock Exchange does not necessarily attribute 1: 1 the image of the real economy, but it usually moves on the basis of investor expectations or concerns for the immediate future.

One of the most powerful expectations of today’s or aspiring investors is that the European Central Bank (ECB) will continue to reduce interest rates in order to reduce the cost of money and stimulate growth in the eurozone, which is presumably favored by the Stock Exchange. And this is because the deadline for a fixed rate deadline are becoming less attractive, so even the most conservative investors are turning to the stock market.

(Reuters, DPA, Handelsblatt)