The German Dax index started the trading day on Thursday morning with a cautious tone, as it was calculated to be around 23,235 points, a 0.2 percent decline from the previous day’s close.
Since the beginning of the year, the MDax has developed almost 20 percent better than the US S&P 500 index, with the MDax having a 16 percent increase, while the S&P 500 is in the red. “And that leads to a completely new valuation situation” said Thomas Altmann of QC Partners. “If you look at the expected P/E ratio in the future, the MDax is now more expensive than the S&P 500.”
The way forward for the Dax seems to be currently rocky. “We do see a sustained high optimism, but in the area of the all-time high, it lacks convincing buyers at the moment. It would need long-term oriented buyers to come into the market, who believe in a positive economic dynamics in Germany” said Altmann.
Instead, a growing hedging activity is seen in Europe. The STOXX Europe 600 index typically sees less focus in the context of hedging activities, but in this case, the volume of outstanding put options has reached a historic high, according to Altmann.
The European common currency was weaker on Thursday morning, with one euro costing 1.0876 US dollars and one dollar being worth 0.9195 euros.