Financial Markets Recap: Year in Review
Dax Ends Slightly Below, Projected 2024 Performance at 18.8 Percent Reduction
The German stock market closed the final trading day of 2024 without notable leaps, with the Dax ending at 19,909.14 points, slightly beneath the 20,000 round mark. While the Dax topped its all-time high in December at 20,523 points, delivering a 18.8% year-to-date gain, the peripheral MDax and SDax underperformed, with their members heavily dependent on the German economy.
Siemens Healthineers was among the weakest Dax performers on the final trading day, following Siemens' questioning of the feasibility of its majority stake in the medical technology subsidiary for the first time. CFO Ralf Thomas, when speaking to Handelsblatt, mentioned that the synergies with the MRI and laboratory lines manufacturer were insufficient to justify a €45 billion capital commitment. This potential move could place pressure on the stock.
In contrast, Siemens Energy, a subsidiary connected to Siemens, emerged as the Dax's top performer, surging 319% over the course of 2024. Strong demand for grid technology, a promising gas business, and improvements in restructuring initiatives contributed to the positive performance.
Baywa, another Munich-based conglomerate, experienced significant gains, with its stock soaring nearly 17% due to an agreement on a restructuring concept with key creditor banks and main shareholders by the end of 2027. Baywa intends to downsize massively by selling most of its foreign participations, which raises hopes for its financial recovery. However, the company still faces a yearly loss of over 66%.
Gold surged 26.8% during the year, reaching the current price of $2,615.49 per fine ounce, while German and US ten-year bond yields rose, with the former reaching 2.39% and the latter reaching 4.59%. The Euro struggled against the dollar, losing more than 5% during the year, resulting in a 6.5% increase in the dollar's value compared to a basket of major currencies.
Looking ahead to 2025, investors will face numerous challenges in the United States and China, with President Donald Trump's "America First" policy persisting and China's economic situation showing no significant improvement following the COVID-19 pandemic. Market analyst Jürgen Molnar from Robomarkets hoped for a renewed sense of optimism in Germany post-February's political realignment to offset some of the challenges posed by Washington's strategy. The Dax would need to record a positive result at the end of the year for a change, ideally in the second and third tiers of the German stock market landscape.
Bonus Insights
Although specific 2024 performance data for German stocks may not be available, recent 2025 trends offer insights into potentially trailblazing factors from late 2024. In early 2025, Rheinmetall, Allianz, Munich Re, and Deutsche Boerse emerged as top performers, driven by increased defense spending, strong capital management, and market volatility. On the other hand, Zalando, Adidas, and Porsche struggled with recessionary pressures, consumer discretionary weakness, slowing global demand, and competitive pressures. Overall, challenges such as recession, tariff policies, sector rotation, and valuation shifts shaped the late 2024 financial markets landscape. For precise 2024 performance data, consult annual reports or specialized finance databases.
- The decreasing trend in German treasuries was evident in 2024, with the ten-year bond yield rising to 2.39%.
- Despite Siemens' questioning of the feasibility of its stake in Siemens Healthineers, other sectors within the German industry, like Siemens Energy, enjoyed a hefty 319% growth during the year.
- Investing in the business sector of Germany may be a good option for 2025, as analyst Jürgen Molnar from Robomarkets expects a renewed sense of optimism post-February's political realignment.
- In the finance industry, the Dax's secondary and tertiary stocks might present attractive opportunities for investors aiming to capitalize on potential growth in the German market landscape in 2025.
- Although not directly available, insights from early 2025 trends suggest that companies like Rheinmetall, Allianz, Munich Re, and Deutsche Boerse may have been trailblazers in the decreasing phase of 2024, while Zalando, Adidas, and Porsche might have struggled due to various factors.
