QUESTION: Despite the energy situation in Germany, and Europe, the DAX index has substantially outperformed the S&P500 index, why?
ANSWER: Yes, the DAX has outperformed but not as substantially as most believe because the indices are differently calculated.
The most obvious difference is that the DAX is an accumulation index (i.e. it adds dividend payments to change in stock prices) while the SPX is a non-accumulation index. Fundamentally, the DAX has less exposure to tech stocks.
However, we expect more downside risk to the DAX (energy and China exposure) that SPX (continued tech weakness and US political risk).