Dusseldorf The German stock market cannot escape yesterday’s drop in the price of oil. Of the Dax is down 1.9 percent in the first hour of trading at 10,473 points.
The topic on the markets is the oil price collapse on Monday evening, which occurred after Germany closed on the stock exchange. In the United States, the price of oil plummeted for the first time in its history due to the coronavirus pandemic. Sellers have to pay money for someone to take their oil: The price for the US WTI futures contract for May plummeted Monday by almost $ 56 to minus $ 37.63 a barrel (159 liters).
Why this is relevant: Should the US oil industry with its many smaller companies come under even greater pressure, experts fear a wave of bankruptcies that could possibly also burden the financial sector.
The other burden is the new quarterly figures. Already on Monday, exchange expert Stephan Heibel warned after evaluating the Handelsblatt survey Dax-Sentiment: “Downside potential threatens during the reporting season, because company figures will show the extent of the economic damage of the quarantine measures in the coming days and weeks”.
This forecast became reality a day later: IBM was the first company in the US tech industry to present figures and, due to the extreme uncertainty, canceled all forecasts for 2020. Even if company boss Arvind Krishna emphasized the healthy balance sheet and financial situation of the company. After all, the “high dividend is certain”.
But Wall Street does not want to hear anything about it: the stock plummeted by a good four percent. And IBM paper also fell by around four percent on the German stock market.
In the US, the other technology giants are like Microsoft, Amazon (AWS Cloud), Google Cloud, Alibaba or Oracle will follow in the coming days. They will not be able to avoid every negative trend either.
In Germany, accordingly SAP– Share under pressure, which has to work out two negative reports. In addition to the weak numbers from IBM, the company separates from its co-boss Jennifer Morgan in the midst of the corona crisis. The 48-year-old will leave SAP on April 30.
The share loses 2.6 percent at the opening. The software manufacturer is the most valuable DAX company and, due to its high market capitalization, has the greatest influence of all 30 values on the price development of the stock market barometer.
It doesn’t help that Europe’s largest software company made a significant profit in the first quarter. Between January and March, Walldorf residents earned 811 million euros. SAP had already released preliminary figures and had to cut its annual forecast due to the Corona crisis. The final indicators from SAP corresponded to the preliminary, a dealer said.
The requirements from overseas are weak: the oil price collapse has not only burdened the US stock exchanges, but has also clearly lost the Asian markets. Futures on the US selection index S&P 500 have turned negative after initial gains, signaling a weaker opening of the trade.
Look at the individual values
Drägerwerk: The medical technology manufacturer, which is very busy due to the corona pandemic, has apparently raised new capital. The manufacturer of ventilation machines and other devices for intensive care medicine claims to have gross proceeds of EUR 76.50 million from the issue of around one million preferred shares. The shares were placed with institutional investors by means of an accelerated placement process. The share loses 1.7 percent. Last week had the hedge fund Sandbar Asset Management its speculation on falling prices of the Drägerwerk share has increased to 0.71 percent three freely tradable shares.
Danone: Due to the uncertainties resulting from the corona pandemic, the French food company has now completely withdrawn its already reduced annual targets. The effects of the global shutdown are not foreseeable. In the first quarter, the group posted sales growth of 1.7 percent to 6.24 billion euros. The share loses 0.4 percent.
Sartorius: The laboratory supplier started the year with double-digit growth rates. With an increase in sales of 16.5 percent to EUR 509.9 million, the operating result rose by 20.9 percent to EUR 137.9 million. The Management Board raised its forecast for the full year and increased the share by 4.9 percent.
Look at other asset classes
The price of US oil is after its historic fall into negative territory on Tuesday again climbed slightly above zero dollars. With weak trading, the price of the US WTI futures contract rose by $ 39 in May to $ 0.94 a barrel (159 liters). In contrast, the price of the North Sea variety Brent fell by 3.6 percent to $ 24.67.
On Monday, the oil price in the United States plummeted by just under $ 56 to minus $ 37.63 a barrel (159 liters) due to the coronavirus pandemic, thus falling for the first time in its history.
The pandemic has caused global oil demand to collapse by almost a third. Buyers are faced with the problem that the oil storage capacity will soon be exhausted.
The yield differential remains on the bond market (Spread) between German and Italian government bonds at a high level. With a term of ten years, this value is 2.37 percent. The corresponding Italian bonds are currently returning at 1.944 percent and are approaching their monthly highs.
The European heads of state and government are unlikely to make a final decision about a reconstruction fund at the EU summit. That was what EU diplomats said. Chancellor Angela Merkel had already rejected so-called corona bonds yesterday.
“When planning wealth, the rule is: never get out completely!”
What the chart technique says
The leading German index is again approaching its important support zone, which is in the range of 10,391 to 10,279 points. From the second brand, the leading index started its rally in December 2018, which continued until a record high in February 2020. The brand was “confirmed” last Tuesday because the index ended trading right there.
Just below that there are so-called price gaps for which there were no quotes this year. The last gap would be closed at a Dax level of 10,097 points.
At 11,025 meters there is an important resistance on the top. There is the so-called 50 percent correction of the overarching trend, at which counter-movements very often end. Currently related to the Dax, this means that the downward trend has so far been from the record high in mid-February at 13,795 points to the low point in mid-March at 8255 points.
The 50 percent mark is accordingly at 11,025 points, i.e. exactly in the middle between record high and low point. With the increase to 10,820 points last Tuesday, the index of this brand has already approached.
Should the Frankfurt benchmark break this 11,025 point mark, the next resistance would be at 11,266 points, the August 2019 interim low.