How does this fit with the observation of the German DAX going from 12,000 (during pandemic even below 9k shortly) to currently 18,000? Can anyone give a good explanation?
DAX (as most other indices) just captures the top 40 public companies of an economy. It doesn't tell you much about the thousands of smaller businesses. And small to mid-size companies are a huge part of the German economy.
Inflation and interest rates, both recent and future ones.
Let’s say a company has revenue X and is valued as NX on the stock market. Let’s say they will be increasing prices to maintain profits in the next several years and will reach X+Y just because of that. If nothing else changes fundamentally, they should be valued at N(X+Y) at some point.