The German Dax has risen for three straight sessions, while the S&P 500 and NASDAQ have not fared so well. But if you are a long-term investor, you’ve likely already noticed the slowdown. Still, there are no signs of the apocalypse in the near term.
While the DAX hasn’t shown its best foot forward for several months, its recent recovery suggests the bulls aren’t done yet. And the big picture suggests that this could be a trend-setting year. On the other hand, the European bourse remains mired in geopolitics, with a number of countries in tumult.
One of the most important questions to ask is how much of a role does Germany play in your portfolio? It’s a big market, but its size also means that it’s likely to be a buy-and-hold for years to come. In particular, the country’s economy will benefit from the broader European recovery, although the euro is no slouch.
Several stocks to watch include Expal Systems, a Spanish firm that produces explosives, and Rheinmetall, a metals and aerospace giant. This company just made a jaw-dropping $22 billion bid to acquire another firm. A bigger deal is on the way.
Other notable developments include the German government’s stance on reducing the size of its parliamentary bloc, a move that could be beneficial to companies like GM. More encouraging still is the fact that Germany’s Chancellor Angela Merkel has secured a fourth term in office, making her the longest serving head of state in the world. That’s a feat that’s been unmatched in over a century.
With the tumultuous month of November behind us, we can expect the German Dax to be back on track next week. As of this writing, the benchmark index was up 0.51%, while the broader bourse has lost a measly 0.8%.
