Eoin Treacy's view
German DAX Equity review - There has been a great deal of commentary on the malaise affecting European economies but this is to ignore massive regional differences across the Eurozone. Some of the currency union's biggest problems stem from the divergence in competitiveness that sees low inflation, low relative cost of production, high efficiency economies led by Germany dominate, Higher inflation, higher cost of production and less efficient economies mostly on the periphery are at a comparative disadvantage without the pressure release valve of devaluing their respective currencies or the discipline inherited from generations of fighting inflation. The differences between the respective economies are mirrored in the stock market, where Northern European indices are outperforming.

A large number of German large cap companies are benefitting from the weaker Euro, renewed demand for their products particularly in Asia and the low interest rate environment at home. (Also see David's piece on July 13th).

An obvious pattern emerges following a click through the shares in the DAX-30. The best performing shares are focused in the consumer led export sectors. Banks, steel, cement, insurance, utilities and telecoms are underperforming.

A large number of companies remain in relatively consistent uptrends. Of these Siemens, Man AG and Infineon Technologies are in some of the more consistent step sequence advances. Fresenius Medical Care has been even more impressive on the upside.

BMW continues to post new recovery highs, while Daimler also remains in a consistent medium-term uptrend. Adidas, BASF, Fresenius AG, Henkel, Linde and SAP all share a similar pattern of consistently higher reaction lows which would need to be taken out to question the integrity of their medium-term uptrends.