Spurred on by good corporate balance sheets, the Dax exceeded the 16,000 mark for the first time on Friday. The leading German index recently rose to a high of 16,003.79 points. It was only at the end of March that the Dax had reached the 15,000 mark for the first time, and on January 7th it had exceeded 14,000 points for the first time.
Since the beginning of the year, the index has gained more than 16 percent. In the past few weeks there have been positive economic signals from numerous sectors and there have been increasing signs of a global economic recovery. Quarterly balance sheets of many companies have mostly shown increasing sales and profits, the number of unemployed in the industrialized countries is falling again.
There were also positive signals recently from the US inflation data published on Wednesday. However, there are still supply bottlenecks for raw materials, a lack of supplies for computer chips and, last but not least, the spread of the delta variant of the corona virus. The upward trend on the stock exchanges is supported by the still very low level of interest rates and extensive bond purchases by the central banks.
Although inflation rates have risen significantly recently in Europe and the USA, the central banks do not want to abandon their course of cheap money for the time being. Investor concerns about an even stronger rise in US inflation had not been confirmed this week. Although US inflation remained high in July at 5.4 percent year-on-year, it did not accelerate.
In Germany, the inflation rate in July was 3.8 percent. A persistently high level of inflation in the US could intensify speculation that the US Federal Reserve might exit its extremely loose monetary policy. This can have a detrimental effect on the stock market because other asset classes then become more attractive again.