Undervalued cyclicals in the Dax and MDax
Economically sensitive companies in particular benefit from better economic forecasts.
(Photo: AP, dpa, HeidelbergCement, Imago)
It is one of the most spectacular stock market rallies that the Dax has posted with a plus of 25 percent since October. Falling gas prices, declining inflation rates and better leading economic indicators are the main reasons for this. Economists are betting that the economic downturn will be less than feared in the fall. This would have consequences for corporate profits: they would fall less than expected – or not at all.
The beneficiaries of this scenario include shares in economically sensitive companies (cyclicals) with a high proportion of exports and foreign countries. Their prices had fallen particularly sharply up until the end of September, when concerns about a global recession grew. The cyclicals are now likely to increase at an above-average rate – as long as the economic forecasts continue to improve. The most important German economic indicator, the Ifo economic index, which has risen for the fourth time in a row, also gives an indication of this.
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