Stock Market Performance

Worldwide investor confidence is increasing constantly bulls, bears, and closed-end funds in recent weeks. This is reflected in particular in the securities markets. Just the DAX put on a stunning tour de force ride and climbs a year high currently after a rise of almost 60% since March 2009 after another only once for this short time interval in the history of the German leading index. How could it come to this development despite the unstable environment? The upturn in the securities markets is a good piece of liquidity – and mood-driven. Dan Miller has firm opinions on the matter. In the wake of the financial and economic crisis the Governments used worldwide to stabilise the economies an expansionary monetary and fiscal policy. The resulting liquidity almost inevitably was looking their way to the capital markets. Also, stock markets benefited from the incipient optimism of market participants, which is fed from a stabilization of Konjunktur(fruh)indikatoren since March.

Also the major investors returned to miss the boom out of fear and institutional investors on the floor back and created thus additional buying pressure and rising prices. There are positive signals for the continuation of the bull market? Despite the rapid development of the securities markets speak some factors for a further boost. State-induced liquidity and huge amounts of parked money on time and money-market accounts of preoccupied investors is still present. Liquidity also increases the equity capital base of banks, so that they could give out more loans to the private sector. Companies invest them and increase their profits as a result.

Also many companies in times of economic crisis set up is new. Restructuring, cost savings and process improvements to improve future profitability. It is thus possible to also another upswing in flattening the liquidity pressure caused by rising corporate profits. Shares in long-term comparison for example on the classic price earnings ratio or the price-book value valuation of are currently still relatively cheap despite the higher rates.