DAX's Destiny: A German Fairy Tale or a Wall Street Mirage?

Rise the DAX Does!

Hmm close to a record the German DAX is. Like a youngling reaching for the stars. Up 19% since the year's dawn it is. European stocks often outperforming they are. Wall Street with selloffs grappling it is. Optimism boosted by a new coalition it was. Defense spending ramping up Germany is. A historic vote it was. "Do or do not. There is no try," said I once. Invest they did. But will the gains continue? A question this is.

Sell America Hmmm?

A 'Sell America' sentiment a dark side it was. Money flowing out like sand through fingers. But an agreement between the US and China there was. A pause on tariffs 90 days they agreed. Stocks on Wall Street reversing course they did. A bumper rally they enjoyed. But beware of the dark side. Lingering uncertainty clouding the outlook it is. Opinions divided they are. "Fear is the path to the dark side," remember young Padawans?

Deutsche Bank Bullish They Are!

Deutsche Bank bullish they are. Maximilian Uleer his name is. Short term outperformance the S&P 500 he expects. Tariffs a burden for US companies he believes. Political uncertainty higher in the US he says. Valuations more favorable in Germany they are. A ceasefire between Ukraine and Russia favorable for Germany it would be. A target price of 25,000 they have. "Always two there are no more no less. A master and an apprentice." perhaps two opinions they have too.

Headwinds Short Term There May Be!

Marc Ostwald of ADM Investor Services agrees. More upside for the DAX likely it is. A broad improvement in risk appetite amid the US China pause he sees. Caveats there are. Uncertainty around US EU trade he notes. A new German coalition turning words into action a question it is. Headwinds short term they may face. "May the Force be with you," to overcome these headwinds they need.

An Addiction to North America?

Dan Coatsworth of AJ Bell speaks of addiction. An addiction to North America investors have. Europe a natural place to hunt it was. Germany standing out it did. But the DAX now trading at its most expensive level in four years it is. "You must unlearn what you have learned," perhaps to look beyond Wall Street investors must.

A Reversal We Could See!

Carsten Brzeski of ING strikes a cautious tone. A recession in the US defied it could be. A reversal of flows into European stock markets we could see. High expectations for the German government investors have. Disappointed they could get. A long time for fiscal stimulus to reach the real economy it takes. Patience young Padawans patience you must have. "Patience you must have my young Padawan."