Fed corona aids support the Dax

Dax curve

View of the Dax curve in the Frankfurt trading hall.


(Photo: dpa)

Dusseldorf The upward trend on the German stock market continues – supported by impulses from the USA. Before the Easter holidays the Dax with a plus of just over 2.2 percent for 10,565 meters from the trade. The stock market barometer had initially given up the profits of the morning.

In the afternoon things went up after the US Federal Reserve announced new measures. The Fed plans to provide additional $ 2.3 trillion in emergency aid to support the hard-hit US economy.

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Dax gains more than five percent – Has the starting signal been given for a gold rally?

Dusseldorf The Dax kicks off Tuesday with momentum. In morning trading, the German stock market barometer is up 5.2 percent with 9191 counters. All 30 DAX values ​​are positive, Infineon paper increases by more than 11 percent. Shortly after the opening, the stock market barometer even stood at 9283 points. But according to many experts, this should only be a relief rally – a countermovement in the current, still intact downward trend.

After a roller coaster ride, the German leading index ended yesterday’s Monday with a minus of 2.1 percent and a final score of 8741 points. It was a volatile trade with a difference of almost 600 points between daily high and low.

A burden was the significant minus on the US stock markets on Monday. The Dow Jones lost about three percent, despite the huge aid program from the US Federal Reserve. An unlimited bond purchase program and various liquidity and credit programs – there is not much more.

The persistent reaction in the US Senate over the government’s aid program was probably responsible for the still subdued reaction on the US stock exchanges.

At least the stock exchanges in Asia rose significantly on Tuesday, the Nikkei index even more than seven percent. There, the corona virus is already under control in many countries. The Chinese government plans to partially lift the exit restrictions in Wuhan after more than two months after the infection rate is said to have practically dropped to zero.

Things look different in Europe: The British government also imposed a curfew on Monday and the Italian government wants to close all non-essential companies. If the rest of Europe and the United States flourished, much of the global economy would be severely hampered in the near future. “I would not be surprised if the markets quickly switch back to risk-off mode with this implementation,” says Commerzbank analyst Thu Lan Nguyen.

According to investor sentiment, such trading days with clear plus signs are currently only a countermovement in the existing downward trend. Investors should at least wait for this countermovement in order to then say goodbye to unpleasant stocks in the portfolio at higher prices and thus suffer less loss, recommended sentiment expert Stephan Heibel on Monday of this week. After evaluating the Handelsblatt survey Dax-Sentiment, he commented: “Investors should still have enough cash in reserve to remain able to act in the event of a further sell-off wave.”

With his second advice that investors can now buy shares in solid companies again, Heibel is not alone. Well-known fund manager Bert Flossbach expects a deep and sharp recession, but is already buying shares again. “My plan is: slowly increase the equity quota with quality stocks, gradually dissolve hedges, reduce cash,” says the co-founder of the asset manager Flossbach von Storch, who manages the popular “Multiple Opportunities” fund.

Look at other asset classes

The gold price is rising again. After gaining 1.4 percent on Monday, it rose another 2.3 percent to $ 1,588 in early trading. In the two weeks before, the price had dropped by around ten percent. Is the scenario of the financial crisis repeating itself?

The price of the precious metal also fell initially twelve years ago because investors needed cash and had to sell many positions. Then followed a year-long rally to a record high of $ 1921 in 2011. The purchase of gold has apparently also reached private investors due to the current crisis. Bars are currently in short supply.

The Federal Reserve’s Comprehensive Aid Program has a significant impact on the foreign exchange market. The “safe haven” dollar gave way on Tuesday morning. The dollar index, which reflects the price of major currencies, fell 1.2 percent to 101,279 points, heading for the biggest daily loss in three and a half years. In return, the euro gained one percent to $ 1.0829.

The weaker dollar, in turn, fueled the oil price. A North Sea barrel of Brent climbed 4.2 percent on Tuesday to $ 28.18. US light oil WTI cost around 5.3 percent more at $ 24.6 per barrel.

Look at the individual values

Nordex: Full order books drive the wind turbine builder’s share price. The paper gains 17 percent. The board hopes for strong growth in sales and profits in 2020 despite the corona crisis.

Cancom: The IT service provider has revised its provisional sales and earnings figures for the past year downwards due to a change in the accounting. In connection with the first-time review of the annual financial statements by the new auditor KPMG, there were reclassifications in the sales statement. As a result, consolidated sales are expected to be 1.55 billion euros in 2019. In February the company released preliminary sales of 1.64 billion euros. That is why the share loses 0.3 percent in a friendly market environment.

Rational: In view of the corona crisis, the hospital chain is facing a difficult financial year. The Rhön clinic locations are organizationally and medically prepared for the increasing number of corona patients, the company said. However, the economic impact of the crisis on the company – which also includes the Gießen-Marburg University Hospital – cannot yet be assessed. After a friendly start to trading with a gain of almost ten percent, the stock is now 3.3 percent in the red.

What the chart technique says

The technical analysts at Düsseldorf’s HSBC were right. They had forecast that the range between 8255 points – the lowest point of the crash since mid-February 2020 – up to around 8000 points offers stable support. The market was oversold, so it fell too quickly too quickly, and was therefore ripe for a countermovement, the chart technicians said.

“Normal” stock market conditions will only be possible again if the Dax can break the 10,279 point mark. This number comes from December 2018 and was the starting signal for the rally, which lifted the leading German index to new record highs.

Here is the page with the DAX course, here is the current tops & flops in the Dax. Current Short sales of investors can be found in our Short sales database.

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Baader Bank dissolves parts of the fund for general banking risks

Euro bills

Baader Bank has partially dissolved its fund for general banking risks.


(Photo: dpa)

Munich The Baader Bank last year partially canceled its fund for general banking risks and thereby achieved a slightly positive result. “The fund is intended to compensate for volatility in earnings,” said CEO Nico Baader in an interview with Bloomberg on Friday.

The ultimate goal is to be able to compensate for earnings dips in weaker periods by tapping the fund. So far, Baader Bank claims that it only used this option for 2015.

In the morning, the company reported earnings before taxes of EUR 68,000 in 2019, compared to a loss of EUR 19.4 million in the previous year. This was due not least to the increase in other income, which increased by 11 million euros to 14 million euros and was almost entirely fed by the partial liquidation of the fund.

At the same time, commission income fell by 21 percent. The company justified this with restructuring, among other things. The trading result increased by 13 percent, expenses decreased by 11 percent. For the interest result and current income, the company reported a minus of 799,000 euros in 2019, compared to an increase of 527,000 euros in the previous year.

The Management Board expects a positive operating result for 2020 under normal market conditions. A large part of the strategy and structural adjustments that were made in 2019 should then be reflected in the result.

The start of 2020 went well. “Because of the Corona crisis, our earnings in March were well above expectations, especially in market making. This is due to the increased trading volumes and volatilities on the markets, ”said Nico Baader.

“I’m careful whether this will remain the case throughout the rest of the year. We also had a strong start in 2018 and then there was barely anything going on in the rest of the year. ”However, the closure of the stock exchanges, as demanded by some in view of the unrest on the markets, is not a good idea.

Because the development of the stock markets “always reflects the expectations for economic development. Without exchanges, there is no guidance except for infection numbers, ”he said. Because of the corona virus, around 200 of the approximately 400 employees currently work at home at Baader Bank.

More: Read the interview with Bafin President Hufeld about the corona crisis, the unfavorable starting position of many German banks and the tough consolidation of the banking industry.

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Dax group Wirecard: Clarification in installments

Frankfurt / Munich Markus Braun can breathe a sigh of relief, at least for the time being. The KPMG special test has Wirecard relieved in large parts. Clarification is still pending in other areas. It is therefore quite possible that the CEO of the payment service provider from Aschheim near Munich will have to answer further questions in April. The group initiated the special audit in October. Their goal: finally draw a line under the serious allegations that the British business newspaper Financial Times (FT) had made against Wirecard.

In 2019, she examined four areas in a series of articles: an expensive takeover in India, financial irregularities in Singapore, the pre-financing business (MCA, Merchant Cash Advance) and working with third parties. The FT suspected abysses everywhere – and incriminating details at hand. In the end, the pressure became so high that Wirecard brought KPMG’s auditors on board. As a result, around 40 experts re-examined the balance sheets of previous years.

Wirecard presented an interim result on Thursday night. It brings partial relief: In the first three areas of India, Singapore and MCA, the auditors see no effects on the annual financial statements for the years 2016 to 2018. However, the investigation of the controversial business with third parties is ongoing and should not be completed until April 22.

Wirecard had actually promised the final report for the end of the first quarter. However, on Thursday evening, the six-member Supervisory Board advised the new chairman Thomas Eichelmann and approved the interim announcement.

Relieved investors

For the first time, investors were given an insight into the special audit that has been running since October 21. The burden of serious allegations of dirty accounting practices, money laundering and possibly fake customer relationships has now become at least a little easier.

And although the KPMG auditors have not given full absolution, many investors reacted soothed. At the start of the stock exchange on Friday, Wirecard shares rose by almost 30 percent after having been one of the biggest losers the previous day with a minus of more than 18 percent. The significant plus also continued during the day, at least 4.5 percent remained at the end of trading.

Traders did not attribute the growth to renewed trust alone: ​​instead, they also blamed the price drop to EUR 83.50 on Thursday. The share price had been lower than the low point around a year ago when the first serious allegations of irregularities in Singapore had caused the price to fall.

Several hedge funds, which had bet in the past few weeks on a fall in price, would now have sold some of their positions with high profits, according to a trader. That relativizes the significant price increase on Friday.

Criticism of extended examination

Volker Brühl, Managing Director of the Center for Financial Studies at Frankfurt University in Frankfurt, cannot recognize the hoped-for liberation in the communication. “As an investor, the announcement would not calm me down,” says the ex-investment banker. “The fact that the testing period was extended over several weeks shows that there is obviously still a considerable need for testing in the area of ​​critical third-party business.” This is astonishing in view of the audit procedures that have been going on since October.

The analysts who deal with Wirecard also give a differentiated picture. Your course goals range from 136 to 270 euros. At the latest price level of just under 90 euros, this would still offer plenty of potential even in the worst case. Hannes Leitner from the major Swiss bank UBS, one of the most down-to-earth analysts, had only retained his assessment this week after a specialist conference with CEO Braun.

The day after the partial relief still belonged to the optimists: analyst Knut Woller from Baader Bank saw the first encouraging insight into the not yet finished special exam in a first reaction and maintained its high target price of 240 euros.

In the eyes of observers, there are signs that the group is finally opening up: Wirecard promised in the message that “in the sense of transparent processes, the complete KPMG investigation report would be published on the homepage immediately upon receipt”.

In the past few weeks there had been various messages about the manner in which the KPMG special report would be published. Would it go public in whole or in part? And would a deeper or only a filtered insight be possible for investors? The speculation continued.

For a long time, when the incidents in the important branch in Singapore were investigated by the external law firm Rajah & Tann (R&T), it was said that Wirecard would publish the complete report. In the end, however, there was only a thin message from around two pages, which had criticized the German Association for the Protection of Securities (see interview).

Problematic third party business

Despite some positive signals: The crux of the current publication remains the previously unexplained section on business with third parties. These so-called “third party acquirers” handle payment transactions in countries where Wirecard does not have its own licenses.

This is where Wirecard’s biggest problem was recently. The trigger for the special inspection by KPMG was ultimately a ten-page FT article in October. Enriched by internal and external documents, payment flows from Wirecard via partners in Dubai and Ireland were questioned.

The focus was on Wirecard’s partner Al Alam from Dubai. According to the FT, around half of the company’s profit before interest, taxes and depreciation was achieved in 2016. According to internal documents, the Dubai company was responsible for sales of EUR 265 million and an “Ebitda effect” of EUR 173 million.

According to FT, the business of 34 key Wirecard customers was processed through Al Alam in 2016. They come from the United States, Europe, the Middle East, Russia and Japan. According to the Wirtschaftszeitung, it tried to contact all of these business partners. Accordingly, 15 of them had never heard of the Al Alam name, six did not answer, five could not be identified, and eight of them stopped doing business. Wirecard sharply contested this representation.

The interim status of the special audit now published does not provide any clarification regarding these particularly serious allegations: the third-party business is to be examined for a further six weeks. Only then is this part of the investigation still to be completed.

Difficult coordination

A key sticking point for the examination of the third party partners “at exotic locations” was that some of them did not want to open the books for KPMG, insiders report. Here one is in intensive discussions. In addition, there were also numerous language barriers and technical restrictions with the cooperative partners. Accounting documents for the years between 2016 and 2018 are not available in a uniform format from third parties. Accordingly, data would have to be elaborately determined.

The auditors at EY, who have been checking Wirecard’s books for more than a decade, are now waiting for the auditing of the 2019 annual accounts for KPMG’s special auditors to finalize their investigation. For this reason, the publication of the balance sheet originally planned for April 8 was postponed by around three weeks to April 30. A year ago, the announcement of the balance sheet also had to be postponed.

An indication of problems? “The fact that the presentation of the 2019 annual financial statements is also postponed indicates that the auditors cannot rule out a need for correction,” concludes at least finance professor Brühl.

However, there is no pressure on KPMG, says Wirecard. The auditors made their own decisions regarding the progress of the audit. Apparently they would have seen the chance to clarify open questions in the third-party business in the extension of the examination period. The new supervisory board chairman Thomas Eichelmann has repeatedly welcomed a particularly thorough examination.

The global outbreak of the corona crisis had also hindered the review. According to corporate circles, the willingness of KPMG auditors to travel had dropped significantly since the first cases at the beginning of the year. Flights to the Middle and Far East were particularly affected. Particularly there, however, particularly intensive tests with third-party partners were necessary. However, the situation in Asia has now calmed down. Currently in Dubai are being checked, KPMG representatives were also traveling with a Wirecard board in the Philippines, insiders report.

However, the corona virus itself has no noticeable impact on Wirecard’s business. At a conference a few days ago, CEO Braun admitted that the pandemic had a certain negative impact on his company. Failures in air traffic and tourism, however, would be offset by higher sales in online trading.

The message from Thursday night was received very positively by Wirecard employees. “This is the hoped-for liberation. The mood with us is relaxed, ”said a manager of the payment service provider on Friday. Although it was clear: “It would certainly be good if the exam had been completed earlier.” However, one had to see the large scope of the task.

The final clarification will probably only bring the publication of the KPMG final report. Until then, at least in-house, Wirecard boss Braun can be lenient when organizing the investigation.

More: Many questions remain unanswered for Munich investor Daniele Bergdolt in the Wirecard case.

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Dax builds on the previous day’s rally

Dusseldorf Despite the weak guidelines from the USA, the leading German index continues its rally of the previous day. In morning trading, the DAX rises by one percent to 12,104 points.

Today’s Wednesday and other trading days this week, the Frankfurt benchmark should answer an important question: Has the sell-off of the previous week finally ended?

A slide below the 11,800 mark would be the first indication to answer this question with no. Prices well below the multi-month low of Monday (11,624 points) are likely to lead to a further sell-off. So far there are no signs of this.

Yesterday, Tuesday, the leading index ran out of steam at the end of the trade after an initial strong relief rally that pushed prices to a daily high of 12,272 points. In the end there was an increase of one percent to 11,985 points.

After the surprising rate cut by the US Federal Reserve, the US indices fell around three percent, and the Asian markets are holding up well. The Chinese stock market barometer is up about 0.6 percent.

The key issue on the markets is the surprising rate cut by the US Federal Reserve on Tuesday, the so-called “corona cut”. After the 50 basis point cut, the market assumes that at least two further steps will follow by 25 basis points each.

More on the subject:

Although monetary policy is unable to repair supply chains, cure disease, or get people to make up for previously missed dining or theater visits, cutting interest rates on consumer and business funding helps.

The fact that the US markets fell significantly into the red after the interest rate cut is due to the uncertain consequences. What if the markets are now losing faith in the independence of the Fed because President Trump previously pushed hard for a rate cut? Does the Fed see more risks than the markets?

In any case, we live in historic capital market times: after the Fed’s rate cut, the yield on ten-year US interest rate bonds fell below the one percent mark for the first time in the history of the United States on Tuesday. In mid-February the yield was still around 1.6 percent. This makes it increasingly probable what was long thought unthinkable: zero interest rates in the dollar area. On Tuesday evening yesterday, the value for ten-year treasuries slipped to 0.9347 percent; in European morning trading, this yield was 0.9458 percent.

German government bonds are not falling so clearly because the scope for interest rate cuts in the euro area is only marginal. But the yield for ten-year federal bonds is now close to the all-time low of minus 0.711 percent at minus 0.637.

The volatility index VDax, the nerve barometer of the stock exchange, normalized again after its outlier last Friday, but is currently still at a high level with a value of 30.72. The higher this number, the higher the price fluctuations expected by investment professionals in the coming days and weeks.

On February 28, the value shot up to 41.96 as the Dax slipped 3.9 percent. In such a case, experts speak of a “volatility peak”.

The analysts at Düsseldorfer Bank HSBC have been investigating such events since 2008. The result: there were nine such peaks, eight times the leading German index was significantly higher twelve months later. In most cases, the leading German index rose by more than 20 percent. Only once, after the peak in February 2018, the Dax was down 7.4 percent twelve months later.

The statement behind the study: After such peaks, the German leading index then calms down almost always for a longer period.

Look at the individual values

Bayer: The shares are in demand after Deutsche Bank has issued a buy recommendation for the stocks. The papers gain 3.1 percent. Deutsche Bank analysts upgraded the shares to “buy” from “hold” and raised the target price to 85 from 75 euros.

Wirecard: According to a Handelsblatt report, investor protectors have filed criminal charges against the payment service provider. The allegation: he is said to have processed payments for illegal business. The group denies. The stock fell one percent at first, but is currently unchanged.

Burning day: The weak global economy is leaving clear traces on the chemical trader’s balance sheet. This is particularly true in the two major regions of Europe and North America. Sales increased last year only thanks to positive currency effects. Without these, revenues remained at the level of the previous year. The Brenntag management board wants to increase the dividend by 5 cents to 1.25 euros per share, which leads to a price gain of four percent for the share.

Evonik: The specialty chemicals company expects 2020 to be a burden from the weakening global economy. The company more than doubled its 2019 group profit by selling stores to 2.1 billion euros. The shareholders around the RAG Foundation should receive an unchanged dividend of EUR 1.15 per share for 2019. The share rises by 2.7 percent.

Dialog Semiconductor: The chip developer gets to feel the outbreak of the corona virus. Sales in the first quarter will decrease to $ 220 to $ 250 million (previous year: $ 295 million). This is also due to the virus-related interruptions at the contract manufacturers and the demand in China itself. Expected for the full year dialog with a decrease in sales of around 15 percent compared to the adjusted value of $ 1.42 billion in 2019. With an increase of 4.1 percent, the share certificates are the largest winner in the MDax.

What the chart technique says

11,624 points, this brand is the focus. Because this number is the correction low, the lowest point since the record high of 13,795 points on February 17. If the leading index does not break this mark appreciably to the south, there is a chance of a longer, sustainable bottom formation, from where the prices could rise again.

The support level at 11,800 points is also important. The leading German index slipped below this range on Monday, but was well above it at the close of trading.

Handelsblatt analyst check: UBS renews buy recommendation for the Fraport share

The major Swiss bank UBS left Fraport’s “Buy” rating with a target price of EUR 87. The headwind for the aviation industry is growing, but the recent price slumps have already priced in significant downturns, wrote analyst Jarrod Castle in a study published on Tuesday. Airports are likely to see further capacity cuts at the airport.

A total of 20 studies in the Handelsblatt analyst check deal with the Fraport share. The advice “hold” stands against eight purchase recommendations. Eleven analyzes recommend selling the paper. The weighted price target for all analyzes is 69.59 euros, which is above the current price of around 56 euros. With a weighted price target, recent studies have a higher impact.

Click here for the Handelsblatt analyst check

Here is the page with the DAX course, here is the current tops & flops in the Dax, current short sales of investors can be found in our Short sales database,

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Why the corona panic will continue in the markets

Frankfurt “Bad awakening” for the financial markets, “uncertainty rules worldwide”: Claudio Borio, chief economist of the Bank for International Settlements (BIS) in Basel, sums up the mood of international investors. Like many strategists, the BIS expert, who is also known as the “central bank of central banks”, initially anticipates further price fluctuations due to the corona virus.

After a week with the most drastic losses in stocks for more than a decade, as well as slumps in raw materials and even gold, the nerves are blank. The BIS even feels compelled to emphasize that the financial system is stable. At best, there is hope that the US Federal Reserve (Fed) will signal monetary support.

Capital market strategists are sticking to the fact that the spread of the virus can be curbed at least in the medium term, that the stock exchanges can calm down and investors can get back on board.

But first of all, unrest is announced. “The markets will dance to news about the virus and the reactions of the authorities like a tune,” says Borio of the BIS. The US strategist Jim Paulsen from the asset manager Leuthold Group also finds the slump in the stock markets “serious”, especially since “it happened at a shocking rate”.

Robert Halver, head of capital market analysis at Baader Bank, said the investors had rocked too much in safety: “Given the more pronounced speculation that the rally would continue, the striking correction caught many investors on the wrong foot.”

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In the darkest week since the 2008 financial crisis, goodwill totaling almost $ 6 trillion was wiped out on the international stock markets. Well-known indices of the western world like the Dow Jones in the USA, the Euro Stoxx 50 and the German one Dax have dropped by more than twelve percent since the lung disease caused by the coronavirus threatens more and more countries.

The panic of investors was also evident on the commodity markets: on Friday, the price of Brent oil fell below the mark of $ 50 per 159-liter barrel for the first time since the end of 2018. Over the course of a week, oil has lost around 14 percent – this is the strongest drop in a trading week since 2011. The prices for other raw material-dependent raw materials such as copper, aluminum or zinc also fell. A ton of copper costs around eleven percent less than at the beginning of the year.

Not even gold, which is considered a crisis currency, was able to escape the sell-off on the commodity markets. The precious metal lost just under four percent last week to $ 1,584 per troy ounce. Strategists of Commerzbank attribute the price slide “to forced sales to compensate for other losses”. Large investors would have realized profits with gold to close holes in portfolios that the slump in the stock market had torn.

Bonds remain a safe haven

As a safe haven, investors primarily use the bonds of western countries that are considered safe. This causes their prices to rise, in turn, pushed the yield on ten-year US bonds to a record low of 1.149 percent. The return on their German counterparts fell to minus 0.64 percent, approaching their record low of minus 0.7 percent.

The big US bank JP Morgan already reduced its forecast for US government bond yields: to 1.45 percent by summer and 1.75 percent by year-end. Federal Reserve Chairman Jerome Powell’s signals, if necessary, to support the economy with monetary policy, contained late Friday’s share price losses in New York.

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The Fed is closely monitoring developments and their impact on future economic conditions, Powell said: “We will use our tools and act appropriately to support the economy.” Investors are now hoping for a rate cut in the US soon.

How critical the situation is is shown by the fact that an institution like the BIS believes that it has to emphasize that the financial markets functioned stably despite drastic price losses. “Nobody wants to catch a falling knife,” says economist Borio. “But despite all the turmoil and fear, the markets and financial intermediaries have proven resilient.” The BIS expert sees this as proof that the reforms initiated after the financial crisis are paying off.

Strategists expect further losses

For now, however, the strategists remain pessimistic. Even if central banks intervened in a supportive manner, which is what the well-known US investor Jim Rogers is assuming, this could at best lead to “a small interim rally”: “It won’t solve the problem.” Strategists fear a new wave as the main risk of a continuation of the stock market slump Infection cases in Europe outside of Italy or in the USA.

Given the growing number of cases with the novel virus on Friday, the World Health Organization had set the risk of global spread from “high” to “very high”. The fact that the Turkish President Recep Tayyip Erdogan has started to direct flows of refugees from their own country to the borders of the European Union (EU) is also uncomfortable.

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In the short term, the analysts at Helaba expect the stock markets to go down even further. The carelessness of the past few weeks has turned into panic.

Christian Kahler, chief equity strategist at DZ Bank, is also preparing for further price losses: “Investors should not be surprised if the Dax should fall even more in the coming weeks.” Because he expects the epidemic to have a negative impact on the global market The economy is booming – and therefore also on the profit development of listed companies.

The US bank too Goldman Sachs, who had already warned of a slump on the stock exchanges in mid-February, remains skeptical for the time being: the valuations have not yet fallen clearly enough, and too many investors are still invested in stocks, it is said.

Similarly, Marcel Fratzscher, head of the German Institute for Economic Research (DIW), fears that the herd instinct that is widespread among investors will have even more serious consequences on the stock exchanges: In the worst case, such irrational behavior, which occurs among companies and consumers, can trigger a downward whirlpool. he said in an interview.

Economic indicators for February can contribute to the assessment of the economic situation at the beginning of the week: the purchasing manager indices for Germany and the euro zone and the preliminary consumer prices for the euro zone.

Goldman analysts are not afraid that the stock market will slide into a bear market, i.e. price losses of 20 percent and more. Kahler from the DZ confirms: “If the DAX fell by 16 percent from the annual high of 13,800 points to around 11,600 points, this would still be a normal consolidation.”

There is hope in the longer term

Strategists do not want to paint black in the long term: in the medium term, the decline in prices offers the opportunity to build up positions again, the Helaba strategists believe. US strategist Paulsen adds: The dramatic drop in price seen led to a rapid revaluation of stocks that were previously overvalued. If the corona virus does not slow down the global economy too much, “there is room for improvement in the markets,” he says.

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The US financial expert Ed Yardeni, known as a stock market optimist, is already talking about buying opportunities: “If you missed the bull market, you now have a new opportunity to buy – especially when it comes to well-positioned companies,” he told Handelsblatt.

More: The Bank for International Settlements expects further fluctuations in the markets due to the corona crisis. But there is a ray of hope.

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Corona virus strains the stock markets – investors hope for central banks

The US Federal Reserve (Fed) wants to react to the possible risks of the virus epidemic – if necessary – with suitable measures. The American economy remains fundamentally strong, said central bank president Jerome Powell.

Nevertheless, the new type of corona virus poses an emerging risk to economic activity in the United States. The Fed is monitoring developments and their effects on the future economic situation closely. “We will use our tools and act appropriately to support the economy,” said Powell. Investors are now hoping for a rate cut in the US soon.

The leading US index, Dow Jones Industrial, which had fallen significantly below 25,000 points at times, then closed Friday with a minus of 1.4 percent at 25,409 points. Nevertheless, one of the worst trading weeks in years came to an end for the important stock market barometer with a weekly loss of 12.4 percent.

The most recent losses were only more pronounced during the financial market crisis in October 2008. From a four-week perspective, things are hardly looking any better: at minus ten percent, the Dow Jones has been the most loss-making month in exactly eleven years.

The broader S&P 500 lost 0.8 percent to 2954 points on Friday after it had also temporarily dropped more than three percent during the day. The Nasdaq 100 even made the leap into plus, rising 0.3 percent to 8461 points.

Fear of the aftermath of the global corona virus epidemic has given international stock markets the darkest week since the 2008 financial crisis. Since the beginning of the week alone, the value of companies on the stock exchanges has fallen by almost $ 6 trillion.

The German too Leading index Dax closed 3.9 percent on Friday at 11,890 points – in the meantime it was still around 170 digits lower. The leading euro zone index EuroStoxx50 lost 3.7 percent to 3329 points. Both barometers have lost more than twelve percent of their value since the start of the week.

The leading German index last lost a similar amount in a week in August 2011 and thus in the midst of the euro crisis. The massive price fluctuations also show how the rapid spread of the corona virus is draining on the nerves of equity investors. The volatility index VDax, which measures investors’ nervousness, has climbed to a four and a half year high of 43.19 points. As a result, the course tripled within a few days – and thus increased more than ever.

It’s no wonder that equity experts are expressing international concerns: Jim Paulsen, chief strategist at the US asset manager Leuthold Group, finds the slump in the equity markets “serious, it happened at a shocking rate”.

This is also confirmed by Georg von Wallwitz, managing partner of the asset manager Eyb & Wallwitz: “What makes the crash on the stock exchanges so painful is less the amount of the loss – losses of this magnitude occur almost every year – but the speed.”

Many investors would have been too confident, like Robert Halver, head of capital market analysis at Baader Banksays: “The striking correction has caught many investors on the wrong foot, given the more pronounced speculation that the rally will continue.”

For now, the strategists remain pessimistic. Even if central banks intervened to support what the well-known US investor Jim Rogers expects, this could at best “trigger a small intermediate rally. It won’t solve the problem, ”he says.

As the main risk for a continuation of the stock market slide, strategists fear a new wave of infection cases in Europe outside of Italy or in the USA. In view of the growing number of cases with the novel coronavirus on Friday, the World Health Organization had set the risk of worldwide spread from “high” to “very high”.

Further price losses possible

Helaba analysts therefore expect it to go even further in the short term. The carelessness of the past few weeks has turned into panic. Christian Kahler, chief equity strategist at DZ Bank, is also preparing for further price losses: “Investors should not be surprised if the Dax should fall even more in the coming weeks,” he says. Because he expects that the epidemic will have negative effects on the global economy and thus also on the profit development of listed companies.

The US bank too Goldman Sachs, who had already warned on February 19 of a slump on the stock exchanges, is still skeptical: the valuations have not yet fallen clearly enough, and too many investors are still invested in stocks.

However, the US bank analysts are not afraid that the stock market will slide into a bear market, i.e. price losses of 20 percent and more. Kahler from the DZ also appeased: “If the Dax fell by 16 percent from the annual high of 13,800 points to around 11,600 points, this would still be a completely normal consolidation.”

However, strategists do not want to paint black in the long term: in the medium term, the current price drops offer the opportunity to build up positions again, the Helaba strategists believe. US strategist Paulsen adds: The dramatic drop in price seen has also led to a rapid revaluation of stocks that were previously overvalued. If the corona virus does not slow down the global economy too much, “there is room for improvement in the markets,” he says.

The US financial expert Ed Yardeni, known as a stock market optimist, is already talking about buying opportunities: “If you missed the bull market, you now have a new opportunity – especially when it comes to well-positioned companies. Companies with high levels of debt should be avoided, ”he told the Handelsblatt.

Economic indicators such as the purchasing manager indices for Germany and the euro zone in February and preliminary consumer prices for the euro zone for February could help to assess the economic situation earlier this week. It also publishes retail sales for the euro area in January and new orders for industry in February, as well as the US job market report for February.

In addition, the reporting season of companies continues: here to land among other things BeiersdorfConti Hugo Boss, Merck, Pro SiebenSat1 and Deutsche Annington Immobilien Gruppe Numbers before. And the German Stock Exchange will review the composition of its stock indices on Wednesday. The furniture company Steinhoff has chances to be included in the SDax small value index. The printing press manufacturer Heidelberg printing however, could fly out.

With material from dpa and Reuters.

More: “Fear spreads faster than the virus” – Read the full interview with US economist Ed Yardeni here.

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Coronavirus weighs on equity markets – Dax closes below 13,000 points

“The corona virus shows the vulnerabilities of a globalized economy and could lead to companies possibly producing more at local levels in the future,” says Philippe Waechter, chief economist of the French investment company Ostrum Asset Management. Against this background, the virus could prove to be a “game changer” in the long term.

The economic worries are also noticeable in the USA. The Dow Jones slid a little more than 1000 points on Monday.

The Asian stock exchanges had a similar start to the week: South Korea saw the largest price slide in one and a half years. The Korea Composite Stock Price Index (Kospi) of the Seoul Stock Exchange temporarily fell by almost four percent on Monday to a two-and-a-half month low of 2,079 points.

The Shanghai Stock Exchange was only slightly down at 3,030 points. Here, the renewed commitment by Chinese President Xi Jinping to stimulus packages stabilized the prices. The Japanese stock markets remained closed due to a holiday, as did those in Russia.

Speculation that global oil demand could weaken significantly sends the price of the energy carrier down. Brent from the North Sea is cheaper by 3.6 percent to $ 56.41 a barrel.

Gold is becoming more expensive

The “safe haven” gold is benefiting from this development. The price of the precious metal rises 1.86 percent to a seven-year high of around $ 1674 per troy ounce and is heading for the biggest daily profit in seven months.

Investors in the bond market took federal bonds and pushed the yield on ten-year securities to their lowest level in more than four months.

By contrast, Italy’s ten-year bond yield jumped more than eight basis points to 0.997 percent, the highest level in more than two weeks. The gap to yields on German government bonds was around 145 basis points, the largest since the end of January.

The effects of the virus were also noticeable on the foreign exchange market: the euro exchange rate increased. In the afternoon, the common currency was $ 1.0854. In the morning, it was just above $ 1.08.

With the economic data on Monday, stock marketers turn their attention to the Ifo index. Despite the coronavirus epidemic, the mood in the executive floors of the German economy brightened slightly in February. The barometer rose surprisingly to 96.1 points from 96.0 points, as the Munich Institute announced on Monday in its survey of around 9,000 managers. Economists surveyed by Reuters, however, had expected a drop to 95.3 points.

On the German market in particular, shares sensitive to the economy came under pressure. Bank prices in particular slipped. The share certificates of German bank lost more than five percent and at the end of the MDax, the shares of the Deutsche Pfandbriefbank collapsed by almost nine percent. There were also disproportionate losses for car values.

Look at the individual values

Lufthansa: The international aviation association Iata estimates the industry’s loss of earnings due to the corona virus at nearly $ 30 billion, or three percent of total revenue. But things could get worse as the 2003 Sars scenario is expected. In Asia, South Korean and Asiana stocks lost more than five percent each, while Australian Qantas lost over seven percent. Also the Lufthansa slips by 8.8 percent.

Unicredit: According to an insider, Jean Piere Mustier, head of the Italian financial institution, remains with the major Italian bank. Unicredit would like to inform you shortly that Mustier of the HVB mother will be preserved. The bank declined to comment. According to insiders, Mustier was considered a candidate for the top post at the British money house HSBC, to whom the current head of transition Noel Quinn has ordered a tough austerity course. However, the share cannot benefit from the news in the weak stock market environment and falls by 4.1 percent.

Thyssen-Krupp: In the multi-billion dollar bidding race for the elevator division, the employee representatives obtained commitments from the competing finance consortia to secure employment. “With these fair and best owner agreements, we were able to take an elementary step into a secure elevator future,” said North Rhine-Westphalia’s IG Metall boss Knut Giesler. The stock loses 2.8 percent.

car values: The bad China business and the economic uncertainties are particularly troublesome for the auto companies. BMW was down 4.8 percent on Monday evening, Volkswagen by 5.4 percent and Daimler even 6.7 percent in the red.

What the chart technique says

After Monday’s price slide, investors may have to think about 13,000-point rates, possibly as high as 12,795 points. Since the beginning of November last year, the leading German index has found several stops at around 13,000 points. According to chart technology, this area is an important support. Only in December did the Frankfurt benchmark drop briefly to 12,795 points.

Before investors can think about rising prices again, the German stock market barometer must first close today’s downward price gap. Such downward price gaps arise when the daily low of the previous day is higher than the daily high of the subsequent trading day. Specifically: last Friday the lowest price was 13,500 points, the highest price today was from 13,236 points.

If the Dax could establish itself sustainably above 13,500 points, that would be the first important technical improvement.

“The markets have been too carefree with the corona virus”

Handelsblatt analysts Check: Baader Bank increases target price for the puma share

Baader Bank raised the price target for Puma SE from 82 to 90 euros according to figures and a conference call, but left the rating on “Add”. The sporting goods company remains on course for growth and has set a confident tone in the conference, wrote analyst Volker Bosse in a study available on Friday. He justified the higher price target with generally higher valuations in the market environment.

A total of 28 studies in the Handelsblatt analyst check deal with the Fresenius-Medical care shares. The “Hold” advice is countered by 17 buy recommendations. Two analyzes recommend selling the paper.

The weighted price target for all analyzes is 81.00 euros, which is above the current price of around 78.20 euros. With a weighted price target, recent studies have a higher impact.

Click here for the Handelsblatt analyst check

Here is the page with the Dax courses, here is the current tops & flops in the Dax, current short sales of investors can be found in our Short sales database,

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Coronavirus is messing up the financial markets – Dax is slipping significantly

Dusseldorf The spread of the corona virus and concerns about the consequences for the global economy have the stock exchanges under control. Since Dax-All-time high of 13,795 points on February 17, sales of the stock market dominate the action.

The rapid spread of the corona virus outside of China unsettles investors and has an impact on almost all markets. In Italy, for example, around a dozen cities were cordoned off.

“The corona virus shows the vulnerabilities of a globalized economy and could lead to companies possibly producing more at local levels in the future,” says Philippe Waechter, chief economist of the French investment company Ostrum Asset Management. Against this background, the virus could prove to be a “game changer” in the long term.

In Asia, some stock exchanges started the week with severe losses on Monday. South Korea saw the biggest drop in price in a year and a half. The Korea Composite Stock Price Index (Kospi) of the Seoul Stock Exchange temporarily fell by almost four percent on Monday to a two-and-a-half month low of 2,079 points.

The Shanghai Stock Exchange was only slightly down at 3030 points. Here, the renewed commitment by Chinese President Xi Jinping to stimulus packages stabilized the prices. The Japanese stock markets remained closed due to a holiday, as did those in Russia.

Speculation that global oil demand could weaken significantly sends the price of the energy carrier down. Brent from the North Sea is cheaper by 3.6 percent to $ 56.41 a barrel.

Gold is becoming more expensive

The “safe haven” gold is benefiting from this development. The price of the precious metal rises 2.6 percent to a seven-year high of $ 1,686.24 per troy ounce and is heading for the largest daily profit in seven months. For domestic investors, the precious metal is more expensive than ever at 1,548.36 euros.

Investors in the bond market took federal bonds and pushed the yield on ten-year securities down to 0.496 percent, the lowest level in more than four months. This rush on federal bonds depresses the returns on all securities below zero percent. At minus 0.042, the 30-year stocks are profitable as low as they were four months ago. The same applies to the trend-setting ten-year papers, whose yield drops to minus 0.498 percent.

By contrast, Italy’s ten-year bond yield jumped more than eight basis points to 0.997 percent, the highest level in more than two weeks. The gap to yields on German government bonds was around 145 basis points, the largest since the end of January.

The cost of default insurance for Italian bonds is also rising steeply. 112 basis points are now due for five-year papers – 13 basis points more than on Friday, according to IHS Markit. That is more than it has been since the end of January.

The euro is also under pressure: the European currency is losing 0.3 percent against the dollar to $ 1.081, the lowest level since mid-2017. Since the euro is not yet a “safe haven”, it is also suffering today from the spread of the corona Hysteria and the risk of significant economic consequences on Europe, specifically Italy, writes currency analyst Ulrich Leuchtmann in his morning comment.

In general, the currency market is turbulent: the euro fell to 1.061 against the Swiss franc, the lowest level since 2015. And the decline of the Turkish lira continues. Against the dollar, the rate fell another 0.9 percent to 6.15 lira.

With the economic data on Monday, stock marketers turn their attention to the Ifo index. Despite the coronavirus epidemic, the mood in the executive floors of the German economy brightened slightly in February. The barometer rose surprisingly to 96.1 points from 96.0 points, as the Munich Institute announced on Monday in its survey of around 9,000 managers. Economists surveyed by Reuters, however, had expected a drop to 95.3 points.

On the German market in particular, shares sensitive to the economy came under pressure. Bank prices in particular slipped. The share certificates German bank lost more than five percent and at the end of the MDax, the shares of the Deutsche Pfandbriefbank collapsed by almost nine percent. There were also disproportionate losses for car values.

Look at the individual values

Lufthansa: The international aviation association Iata estimates the industry’s loss of earnings due to the corona virus at nearly $ 30 billion, or three percent of total revenue. But things could get worse as the 2003 Sars scenario is expected. In Asia, South Korean and Asiana stocks lost more than five percent each, while the Australian Quantas lost over seven percent. Also the Lufthansa slips by more than seven percent.

Unicredit: According to an insider, Jean Piere Mustier, head of the Italian financial institution, remains with the major Italian bank. Unicredit would like to announce shortly that Mustier of the HVB mother will be preserved. The bank declined to comment. According to insiders, Mustier was considered a candidate for the top post at the British money house HSBC, for whom the current head of transition Noel Quinn has ordered a tough austerity course. However, the share cannot benefit from the news in the weak stock market environment and falls by 3.8 percent.

Thyssen-Krupp: In the multi-billion dollar bidding race for the elevator division, the employee representatives obtained commitments from the competing finance consortia to secure employment. “With these fair and best-owner agreements, we were able to take an elementary step into a secure elevator future,” said North Rhine-Westphalian IG Metall boss Knut Giesler. The share loses 3.2 percent.

What the chart technique says

After Monday’s price slide, investors may have to think about 13,000-point rates, possibly as high as 12,795 points. Since the beginning of November last year, the leading German index has found several stops at around 13,000 points. According to chart technology, this area is an important support. Only in December did the Frankfurt benchmark drop briefly to 12,795 points.

Before investors can think about rising prices again, the German stock market barometer must first close today’s downward price gap. Such downward price gaps arise when the daily low of the previous day is higher than the daily high of the subsequent trading day. Specifically: last Friday the lowest price was 13,500 points, the highest price today was from 13,236 points.

If the Dax could establish itself sustainably above 13,500 points, that would be the first important technical improvement.

“The markets have been too carefree with the corona virus”

Handelsblatt analysts Check: Baader Bank increases target price for the puma share

Baader Bank raised the price target for Puma SE from 82 to 90 euros according to figures and a conference call, but left the rating on “Add”. The sporting goods company remains on course for growth and has set a confident tone in the conference, wrote analyst Volker Bosse in a study available on Friday. He justified the higher price target with generally higher valuations in the market environment.

A total of 28 studies in the Handelsblatt analyst check deal with the Fresenius-Medical care shares. The “Hold” advice is countered by 17 buy recommendations. Two analyzes recommend selling the paper.

The weighted price target for all analyzes is 81.00 euros, which is above the current price of around 78.20 euros. With a weighted price target, recent studies have a higher impact.

Click here for the Handelsblatt analyst check

Here is the page with the Dax courses, here is the current tops & flops in the Dax, current short sales of investors can be found in our Short sales database,

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