The German Dax may have had a shaky start today but it’s on the upswing in a big way. While it’s not exactly up there with the US stock market in terms of size, it’s certainly no laggard. With the market as a whole having been hammered lately, it’s good to see a few blue chip companies making their moves. Among the latest to buck the trend is Spanish explosives and ammunition maker Rheinmetall. Shares of the company rose 7.5% by early afternoon.
Despite the uptick in activity, the DAX is still a handful of digits away from the lofty heights of last year’s halo. But that doesn’t mean equities aren’t worth a closer look. And the Dax is no slouch when it comes to cheap stocks. Combined with low rates, Germany’s stock market is an ideal place to invest for long term growth.
As the dust settles, investors are looking to the long term to fuel the next chapter of global growth. While a new round of stimulus is on the way, a dovish Federal Reserve isn’t likely to re-inflate the asset bubble a la Japan. It’s also a matter of time before the restrictive labor practices that have stymied growth for years are rolled back. If the US economy can get back on its feet, it’s not hard to imagine the euro zone reversing its course.
In the mean time, the DAX may not be the sexiest of markets but it remains a key driver of the euro zone’s economic success story. It’s still in the early days of its recovery, but there’s no reason to believe it won’t be a key contributor to Europe’s prosperity in the years to com