... Trade Reviews DAX nears record highs despite weak German economy

DAX nears record highs despite weak German economy

The DAX has been one of the strongest global indices in 2025, rising roughly 23 per cent year-to-date even as Germany’s macroeconomic backdrop remains subdued. Q3 GDP was flat on the quarter and close to stagnation year-on-year, while headline inflation has moderated only marginally.

By Daniel Mejía | 13 November 2025

The DAX has gained about 23 per cent year-to-date, driven by sectoral strength, favourable valuation comparisons and a global appetite for risk assets.
Germany’s macro indicators remain weak: Q3 GDP was 0.0 per cent quarter-on-quarter and year-on-year growth has hovered around 0.3 per cent for three consecutive quarters.
Valuation metrics for the DAX are elevated but not extreme: average P/E ≈ 29, PEG ≈ 1.3 and EV/EBITDA ≈ 13x for the index constituents as at 12 November 2025.

DAX index: current context

The DAX’s performance in 2025 has been striking: a year-to-date rise of roughly 23 per cent places it among the best-performing major equity indices worldwide. This advance has occurred even as core domestic indicators point to a weak economy. Third-quarter GDP for Germany was reported as unchanged on the quarter (0.0 per cent), and year-on-year growth has lingered at c. 0.3 per cent for the past three quarters, consistent with a stagnating output profile.

Headline consumer-price inflation has edged down slightly to 2.3 per cent year-on-year, signalling only limited disinflation. The persistence of weak aggregate demand — reflected in the flat GDP profile and subdued price dynamics — would normally militate against strong equity returns. Nevertheless, several factors help reconcile the dissonance between macro weakness and equity strength:

Relative valuation: while the DAX trades at elevated multiples by some measures, these valuations remain comparatively benign relative to stretched metrics observed in other markets;
Global market correlations: synchronised risk appetite and equity inflows have lifted European indices alongside US and Asian markets.

An indicative snapshot of valuation as at 12 November 2025 shows an average price-to-earnings (P/E) ratio of about 29 for the DAX-40 constituents, a PEG ratio near 1.3 and an enterprise-value-to-EBITDA multiple of about 13x. These levels imply that although the index is approaching record territory, market valuations are not universally extreme and are supported by earnings expectations and cross-market flows.

Technical analysis on DAX index

From a technical standpoint, the DAX retains a constructive medium-term profile but has spent recent months in a consolidation band:

Trend context. The index trades above its 50-, 100- and 200-day moving averages, indicating that the medium- to long-term trend is intact. Since May 2025 a horizontal consolidation range between about 23,000 and 24,600 has been evident; the volume profile suggests a degree of distribution near the upper bound of that range, reinforcing the 24,600 level as a significant resistance.

Resistance levels. Key upside barriers to monitor are 24,600 (the consolidation high and recent record area) and the psychological 25,000 mark. A decisive, high-volume break above 24,600 would increase the likelihood of extension toward 25,000 and beyond.

Support levels. On the downside, notable supports include 23,500 (proximate to the 200-day moving average) and 23,000 (the lower edge of the current consolidation). A sustained loss of the 23,000 area would raise the probability of a deeper correction.

Momentum indicators. Short-term oscillators (MACD and RSI) are close to neutral, which aligns with the observed range-bound behaviour since May. At present these indicators do not signal a strong directional bias, implying that price action is likely to be governed by breakouts until a clear macro or earnings catalyst emerges.