DAX outlook: mood barometer cloudy outlook

Frankfurt In the past weeks there have been repeated attempts to recover the course, on some days one could believe that the corona pandemic has already been overcome. But on Friday, disillusionment returned – the collapsed ifo business climate index made the whole dilemma clear.

The course of the mood barometer looks like a “Highway to Hell”, was the analysis of the VP Bank. The index is now significantly below the values ​​of the crisis year 2009. The simple message for the future was: “Massive income losses are imminent. We will all get poorer. This applies not only to Germany, but to all economies. ”Sometimes it is better to hear the unvarnished truth.

Other analysts and experts are also skeptical about the weekly outlook. Cautious savings by consumers and companies create a completely different economic and inflation environment than one knows from the post-war period, the analysts at MFS Investment Management believe.

They expect the earnings recovery to be weaker than the market and point to the possible dilution of earnings through capital increases. They particularly highlight 2008 as a comparison.

“When the extreme risk of the international financial crisis subsided, companies were no longer concerned with distributions, but with recapitalization. To this end, new shares were issued – at the expense of existing shareholders, whose capital was heavily diluted, ”said the investment professionals. The new wave of recapitalization has probably just started. In the past few weeks, leisure companies and service providers in the United States and Europe have already offered new shares.

Warning to bargain hunters

The BLI – Banque de Luxembourg Investments is also cautious. “The financial markets are currently giving the impression that they are underestimating the extent of the economic damage and are counting on a rapid recovery as soon as the containment measures are reversed,” is the BLI’s assessment.

Many investors are conditioned to view any decline as an opportunity to buy. However, the analysts recall that while the fall in share prices in February / March was dramatic, the valuations were also very high. As a result, the markets today are anything but cheap, especially after the recent price recovery.

Quality companies with a very solid balance sheet, one or more sustainable competitive advantages and the ability to self-finance should be preferred. The main factor that will continue to speak for stocks remains the low interest rate level and thus the lack of alternatives. At the same time, gold will become an “indispensable part of a balanced portfolio because of the inflation risks.”

After the significant recovery since mid-March, the European stock market has recently lost some momentum, the Weberbank experts believe. In addition, the balance sheet season that is already underway shows significant impacts on corporate balance sheets due to the global “lockdowns”.

Correspondingly, the analysts have also significantly lowered their profit expectations for industrial companies, but also for the banking and energy sectors. Due to the economic slump, banks faced increased write-downs on their credit books and the massive drop in yields clouded interest income. Most recently, they also negatively impacted the rating agency Standard & Poor’s (S&P).

The Deutsche Bank and the Commerzbank were therefore particularly under pressure on Friday “We continue to distance ourselves from these sectors and prefer creditworthy pharmaceuticals or companies from the non-cyclical consumption. In addition, titles from the technology sector are promising in our eyes, ”said the Weberbank experts.

Central banks meet worldwide

If the economic situation continues to be poor, the states and central banks will have to take further support measures. Robert Greil, chief strategist at Merck Finck Privatbankiers, sees an opportunity for this next week because the European Central Bank, the US Federal Reserve and the Bank of Japan are meeting.

“As a result of the unprecedented economic downturn caused by the Covid 19 consequences, all central banks will reaffirm their willingness to support,” says Greil. The economic downturn left neither governments nor central banks a choice but to take further measures to support and recover the economy.

The gross domestic product for the first quarter of 2020 will be published in the euro area on Thursday, and new growth figures will come in the US on Wednesday. Further important economic data in Germany are the preliminary inflation figures and the labor market report for April.

According to DZ Bank, the next quarter should bring an improvement in the economy, but there does not have to be a “V” or “I” recovery. This is not ignored on the stock market, many stocks are up to 80 percent down.

A large number of “mega-caps” hold up against this, mainly in the USA. Amazon, Google, Microsoft, Netflix and Facebook, but also Adobe or Comcast, be stable on the way. Things are also going well for the great values ​​of the “old economy”, including Pepsico, Johnson & Johnson, Procter & Gamble, Home depot and Pfizer. The German Leading index Dax the strategists from DZ Bank see 11,200 points by the end of the year, and the S & P-500 for US equities at 2,800. This would at least stabilize in the medium term.

More: Yield in Corona times: With which investments you can still make money

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German schools practice digital teaching on the Internet

Education from the net

Schools and universities must digitize rapidly at the moment.

Dusseldorf The students stay at home, the teachers get tutoring: If you didn’t know how to exchange documents online at the vocational David Roentgen School in Neuwied on Monday, you had to learn it.

Headmaster Dirk Oswald has divided his teachers into “friendly service teams” so that some can teach others. “In the future, nobody will discuss the need with me,” says Oswald.

What the headmaster ordered in Neuwied is happening all over the country – schools and universities are digitizing at a rapid pace. Germany has struggled for a long time: teachers knew too little and were afraid to fail. Where technology was available, people who maintained it were missing. There are also many concerns about new teaching materials.

Even with the federal government’s multi-billion dollar digital pact, digitization was slow to get going. Now schools across the country are closed due to the corona virus and timidness is being punished.

This became clearest on Monday in Bavaria, which boasts a high-performance education system. Hackers paralyzed the online platform Mebis, intended for distance learning, on the very first day of school closure.

Students couldn’t get their exercises done because hundreds of thousands of automated page views attacked the servers. “The existing learning platforms of individual federal states are probably all on their knees,” says Heinz-Peter Meidinger, chairman of the German Association of Philologists.

Pragmatism is required

The situation can be interpreted as a disaster or as an opportunity, as the example of headmaster Dirk Oswald shows: Now it is time to learn from digital pioneers, and with pragmatism – please only with caution.

Example primary school of the German embassy school in Tehran: When it was closed because of Corona, headmaster Johannes Claassen simply filmed learning videos of the start-up sofa tutor and sent it to his students via WhatsApp.

The founder and managing director of the digital learning platform, Stephan Bayer, has to laugh while he tells it. “It was not agreed with us now, but the headmaster contacted us after a few days and applied for a license for his students.”

Teachers in Germany would not only violate Sofatutor’s license terms, but also the General Data Protection Regulation because services like WhatsApp are not allowed in the school context. At least agreements with everyone involved are absolutely necessary.

As of Wednesday, schools in Germany are also closed nationwide. The Berlin-based company Sofatutor with its learning videos is only one of many profiteers when the schools have to continue teaching despite the closure.

School administrators and state governments are now reporting to sofa tutor boss Bayer: “We currently have a large number of inquiries and clearly notice a surge in willingness to carry the subject of digital teaching to the college and to try it out with the students.”

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US exchanges grow more than nine percent

new York On Wall Street, the signs at the end of the week were for recovery after the panicky sellouts the day before. Investors were hoping for a further rate cut in the coming week to support the economy.

The New York stock exchanges also received support from US President Donald Trump, who declared an emergency because of the virus outbreak. The measure would give states and local authorities access to aid of up to around $ 50 billion, Trump told journalists. The money should be used to curb the spread of the disease.

He announced bureaucratic relief for the country’s hospitals in the fight against the novel corona virus. According to the President, late trading stock prices continued to build gains. “Should the White House put together a large fiscal package in the coming days, this should help the sold-out market,” said Mathieu Savary from the analysis house BCA Research.

The Federal Reserve also increased its economic aid on Friday and announced the purchase of $ 37 billion in government bonds.

Biggest daily gain since October 2008

The Dow Jones index of standard values, which was still around five percent higher in midday trading, finally closed on Friday, 9.4 percent higher, at 23,185 points. The technology-heavy Nasdaq advanced 9.3 percent to 7874 points. The broad S&P 500 gained 9.3 percent to 2,710 points.

For all three indices, it was the largest percentage daily gain since October 2008. After the entry ban for Europeans, which was surprisingly imposed by Trump, the Dow Jones had lost ten percent on Thursday and recorded the biggest drop in prices since “Black Monday” in 1987. The S&P 500 lost 9.5 percent, while the Nasdaq technology exchange went 9.3 percent lower.

The Dax in Frankfurt had closed just 0.77 percent on Friday. The leading German index had even temporarily dropped 0.8 percent after temporarily gaining almost seven percent in the morning. Crashed on weekly view the Dax Fell 20 percent and recorded the largest loss since 2008.

Focus on individual values

The financial sector, which has been badly hit recently, rose Bank of America, Citigroup and JPMorgan Chase on Friday by up to 18 percent. The papers of the cruise ship operators Carnival, Royal Caribbean and Norwegian also recovered up to 17 percent.

The quarterly figures for the software developer came off well with investors Adobe the price rose by almost 18 percent. In addition, the company expects slightly more profit than the market consensus in the current quarter.

Investors were also pleased to hear the figures from the SAP– counterparty Oracle. The price soared by a good 20 percent. “We had an extremely strong quarter,” said Oracle CEO Safra Catz.

In view of the recovery on the stock markets, US government bonds were not in demand: trend-setting ten-year bonds lost a whole and 29/32 points to 104 21/32 points. The yield rose accordingly to 1.01 percent.

The chip maker Broadcom Disappointed at first with quarterly figures, the share fell to a low since July 2018. Analyst Stacy Rasgon from the Bernstein analysis house spoke of a weakness in the semiconductor business for mobile devices. In late trading, however, the shares rose by a good seven percent with the rising overall market.

The euro continued to weaken towards the close on Wall Street and recently traded at $ 1.1085. The dollar was firmer against many currencies. The European Central Bank had previously set the reference rate at $ 1.1104. The dollar had thus cost 0.9006 euros.

More: US Federal Reserve pumps trillions into the financial markets

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