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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Prospect of pandemic easing supports US stock markets

Frankfurt The prospect of loosening corona restrictions in some U.S. states supported prices on Wall Street on Friday. However, due to the overall gloomy economic forecasts, there was no real mood to buy.

The Dow Jones gained 1.1 percent to 23,775 points. The technology-heavy Nasdaq advanced 1.7 percent to 8635 points and the broad S&P 500 increased 1.4 percent to 2837 points. On a weekly basis, the Dow gained about 1.1 percent, the S&P 1.4 percent and the Nasdaq just under 1.7 percent.

Georgia is the first federal state to lift the lockdown, although President Donald Trump did not approve the timing. Governors from Texas, Tennessee, Ohio and Montana, for example, also announced plans to allow business to resume quickly for some jobs.

“We have passed the peak and slowly but surely all countries in which there have been no major cases will gradually reopen,” said Thomas Hayes, managing member of the asset manager Great Hill Capital. “The market sees this as a signal that demand will come back.”

But the prospects for the global economy remain bleak. The US industry is experiencing a massive drop in orders as a result of the corona crisis. Orders for consumer goods such as airplanes and machines dropped by 14.4 percent in March. Economists surveyed by Reuters had expected a drop of 11.9 percent.

In Europe, investors were disappointed by the EU’s contingency plans to combat the aftermath of the pandemic. The Dax lost 1.7 percent to 10,336 points, the EuroStoxx fell by around one and a half percent.

Prices went up and down on the oil market. After a loss of around five percent, a barrel (159 liters) cost $ 16.86, around two percent more than on Thursday. North Sea oil of the variety Brent was quoted at $ 21.60. The price for the main US brand WTI then stabilized around $ 17. Oil stocks like ExxonMobil and Chevron reacted with further moderate profits.

Analysts are not giving the all-clear after the historic price collapse at the start of the week. “The extracted oil simply has no place where it can be stored,” said Bjornar Tonhaugen, who is responsible for the oil market at the Rystad Energy analysis company.

Because of the pandemic, oil demand has plummeted 30 percent. At the same time, the camps are filled to bursting, particularly in the USA.

The unprecedented drop in the price of oil at the beginning of the week is the subject of investigations by the US derivatives regulator (CFTC). “In such a situation, we are looking into all sorts of explanations,” CFTC Commissioner Dan Berkovitz told Reuters on Friday. Because of the extreme price fluctuations, you will take a closer look this time. In the United States, such an investigation can take years.

Focus on individual values

One of the biggest losers in the US stock market was stocks of Boeing, which gave around 6.4 percent. According to a newspaper report, the aircraft manufacturer plans to cut the production of its Dreamliner model 787 in half.

In addition, the planned purchase of the commercial airline division of the Brazilian airline threatens Embraer to burst in view of the rapidly falling market value of both groups. There was a blockade on the $ 4.2 billion deal, and fate is uncertain unless a breakthrough is found quickly, people familiar with the talks said.

Papers from Intel tended to go down in the course, then close 0.4 percent up. The chipmaker had forecast earnings below expectations for the second quarter.

Given the general situation, it is not surprising that the group has also cashed in its annual forecast, the analysts from Cowen and Company judged. However, it is surprising that the structural drivers for growth in the first quarter apparently no longer exist in the second quarter.

The shares of Facebook at the same time increased by 2.7 percent, while the papers from zoom Video communications, which had risen to a record high of $ 181.50 at the start of trading, plummeted 6.1 percent. In view of the rapid growth of video chats in the corona crisis, Facebook does not want to leave this terrain to the rising zoom and counters with its own offer.

The fuss about the Ebola drug Remdesivir from Gilead Science, which is currently being tested in the treatment of lung disease Covid-19, did not go on too long that day. According to the manufacturer, the fact that the administration of the drug in China did not lead to a noticeable improvement in patients, as was reported on Thursday, is not meaningful

The study was terminated prematurely due to low participation and therefore has no statistical value, it said. Gilead’s stock, which had dropped a little more than 4 percent the day before, eventually recovered by 2.4 percent after further losses initially.

The share certificate from Beyond Meatwhich rose for the seventh day in a row. Cooperation with has been particularly strong since Tuesday, after the meat substitute manufacturer had announced Starbucks want to enter the Chinese market. Overall, the paper has risen by almost 40 percent since this announcement, nine percent of which this Friday alone.

After a weaker start, trend-setting ten-year government bonds on the US bond market finally rose by 3/32 points to 108 20/32 points and returned 0.590 percent. The euro was trading around the $ 1.08 mark in US trade and was priced at $ 1.0815 at the close on Wall Street. The European Central Bank set the reference price at $ 1.0800 (Thursday: 1.0772). The dollar thus cost 0.9259 (0.9283) euros.

More: Read here how the German stock market ended the week.

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Disastrous economic data weigh on the Dax

Frankfurt The series historically poor economic datathat investors currently have to digest does not stop. That is also a burden for the German Leading index Dax. The stock market barometer closed on Friday 1.7 percent lower at 10,336 points.

“This drug had recently made a significant leap on the stock markets,” said Thomas Altmann, portfolio manager at QC Partners. “Therefore, this announcement is a clear warning to all euphoric investors.”

The puzzle is only slowly completing, how badly the corona pandemic is paralyzing the global economy. It was announced on Friday that the UK retail collapsed by more than four percent in March compared to the same period in the previous year – a decline that was not achieved even in the 2008 financial crisis.

Also in Japan the retail sector is idle: Merchants in the capital city of Tokyo reported a drop in sales of almost 35 percent in March. A similar decline to this extent is not to be found in the Bloomberg financial services time series.

There were also bad numbers from industry on Friday: The European commercial vehicle market fell almost half in March due to the coronavirus pandemic. With 105,196 vehicles, 47.3 percent fewer were registered than in the same month last year, the responsible industry association Acea announced on Friday in Brussels.

The number of registrations had already declined in January and February, but the decline in March was again considerably greater. The falls were most pronounced in the countries particularly hard hit by the Covid 19 pandemic: Italy (minus 66.1 percent), Spain (minus 64.4 percent) and France (minus 63.1 percent).

The managers surveyed by the Ifo Institute also assessed their situation as worse and are also more skeptical about the future. The published on Friday Ifo business climate index for April fell more clearly than expected: from 85.9 points in March to 74.3 points. That’s the lowest value ever measured. Economists interviewed by the Reuters news agency had expected a drop to 80.0 points. “The mood among German companies is catastrophic,” said Ifo President Clemens Fuest.

On Thursday, the GfK consumption barometer in Germany and the purchasing manager indices for the European service sector signaled that Germany and Europe were heading for a severe recession. The European Union is steering because of the corona crisis, according to EU Industry Commissioner Thierry Breton towards a drop in economic output of five to ten percent.

In addition, investors are also looking at the Federal Chancellor. Angela Merkel consults with representatives of business and trade unions on the corona crisis. This could also involve possible further easing and economic policy measures.

Look at the individual values

Deutsche Bank and Commerzbank: The rating agency Standard & Poor’s (S&P) has given it a thumbs-up because of the economic impact of the corona crisis at Commerzbank, Deutsche Bank and other German financial institutions. In the Commerzbank S&P downgraded the credit rating by one grade to “BBB +”, the outlook remains “negative”, as the credit rating officers announced on Thursday.

At Deutsche Bank, S&P confirmed the rating of the creditworthiness with “BBB +”, but lowered the outlook to “negative” from “stable”. While the creditworthiness guards doubt that Commerzbank can implement its new strategy “Commerzbank 5.0”, including the planned sale of the Polish subsidiary M-Bank, as planned, they see the restructuring of Deutsche Bank basically on track. The shares of the two largest German financial institutions fell by 6.8 percent (Deutsche Bank) and 4.1 percent (Commerzbank) and were among the biggest losers on the stock market on Friday.

Lufthansa: Down eight percent it went for the papers from Germany’s largest airline. So that leads Lufthansa the Dax’s list of losers. At € 7.20, the shares cost less than they had since the Sars pandemic 17 years ago. According to insiders, the airline plans to put together a government aid package of up to ten billion euros early next week. The loss increased to EUR 1.2 billion in the first quarter. Due to the pandemic, air traffic in Germany is almost completely stopped.

Nestlé: The Swiss food giant, on the other hand, is doing very well. Nestle accelerated its growth in the starting quarter 2020. Organic sales growth in the first three months was 4.3 percent, as Nestle announced on Friday. The share rose 1.8 percent. As the full impact of the Covid 19 pandemic could not yet be assessed, Nestle is tentatively sticking to the original outlook for 2020 as a whole. The Group expects organic sales growth and the underlying operating profit margin to improve.

Sanofi: The French pharmaceutical company benefits from the strong demand for painkillers and antipyretic due to the spread of the coronavirus. In the first quarter, currency-adjusted profit rose by 16.1 percent to 2.04 billion euros Sanofi announced. Sales climbed 6.6 percent to EUR 8.97 billion. Around half of the profit and sales growth is due to the corona pandemic. The corona effect will subside in the course of the second quarter. Sanofi confirmed the forecast for 2020. The group has set itself a five percent increase in earnings per share. The papers climbed 1.9 percent.

Eni: The Italian oil company the corona pandemic and collapsing oil prices drove a billion dollar loss in the first quarter. The net loss was 2.9 billion euros, as the Italian company announced on Friday in Rome. Had in the previous year Eni earned just under 1.1 billion euros. For example, Eni had to adjust the book value of its oil inventories to falling market prices, as well as depreciation on oil and gas activities. Adjusted, Eni achieved a small plus of 59 million euros, a fraction of the previous year’s profit of 992 million euros. Revenues plummeted by a quarter to around 13.9 billion euros. The stock lost 2.9 percent.

Look at other asset classes

Oil prices continued their recovery from the previous day on Friday despite the price losses in the meantime. The decisive factor on Wednesday, however, was not the easing of weakness in demand and excess supply, rather political tensions between the USA and Iran caused rising risk premiums for crude oil. In Asian trade, a barrel (159 liters) of the North Sea type Brent last cost $ 21.57, up 1.1 percent. The US WTI was traded at $ 17.09 per barrel, up 3.5 percent.

The euro exchange rate rose slightly on Friday. The European common currency was trading at $ 1.0804 in the late afternoon. The European Central Bank (ECB) set the reference rate on Friday at $ 1.0800 (Thursday: 1.0772).

Italy’s central bank Market insiders broadened their purchases of domestic government bonds on behalf of the ECB on Friday. The Banca d’Italia is buying slightly more titles on average than in the past few days, said a primary trader. A second insider said that she was more active on the market. Yields on ten-year bonds fell around ten basis points over the course of the day to 1.899 percent. They had previously climbed above the two percent mark when disappointment over the results of the EU summit on Thursday spread on the bond market.

With agency material.

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Börse Express – Müller: People must have equal access to corona vaccine

Development Minister Gerd Müller has this in mind
called, already set the course for an international
Corona vaccination program. “Once effective medication and one
Vaccine against the virus must be available to all people on the
World have equal access to it, “said the CSU politician on
Thursday. Müller announced further funding for the global
Vaccine Alliance Gavi on the already committed 600 million euros
want to deploy beyond. Germany had this amount for
the existing international vaccination campaigns have been promised. This
should not be neglected, warned Müller.

“It is also in our interest that we have Covid-19 worldwide
fight. Otherwise it will come to us in Germany and in waves
Europe will return “, Müller continued. That’s why he had the day before
the global “Corona Immediate Program” worth one billion euros
presented in the Bundestag. To do this, he steered this year in his own
Focus on health and pandemic control,
Food security, stabilization of refugee and
Crisis regions and job security. Overall
but another immediate need of three billion euros for
Emergency aid has been identified./cn/DP/jha

AXC0384 2020-04-23 / 15: 48

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