2018 was undoubtedly one of the worst stock exchange years for a long time. The pessimistic sentiment and disappointment about the markets still linger on for many investors. In this lethargy many have overlooked the fact that the markets have staged the best start to the year for 30 years.
Since 1 January the S&P 500 has gained 6.9% – the best start since 1989. By way of comparison: The average monthly increase in January is only 0.9%. The DAX also put in a very strong performance in January, also rising 6.9%. Within the past 30 years this performance has only been outstripped by the recovery movement in 2012 and by the share-price fireworks display that was seen around the time when the ECB launched its bond-purchasing programme in 2015.
It is now high time to leave the weak performance in 2018 behind us and take an objective look at the future. Our DZ BANK stock-exchange barometer shows that the extreme pessimism seen at the end of the year is abating. The reporting season for the final quarter is delivering solid figures and the outlooks are also a source of optimism. At the same time, the market is increasingly assuming a solution will be found in the trade dispute between the USA and China. Admittedly, there are still many risks and a lot of uncertainty. Nevertheless, the likelihood that our DAX target of 12,000 points will be reached by the end of the year is increasing.