Current Dax rate: Dax is slipping

Dusseldorf The price gains of the past two trading days have evaporated again. The Dax loses 2.2 percent in morning trading and stands at 9654 points.

The course of trading on Wednesday yesterday showed the typical behavior of a bear market: negative reports lead to a quick sell-out. An extremely weak Ifo index ensured that the Dax slipped by 650 points within a short period of time. By definition, the leading German index has been in a bear market since mid-March because it slipped more than 20 percent from its record high (13,795 points) in mid-February – this was the case at around 11,000 points.

The fact that the Dax went off the market on Wednesday after a final spurt of plus 1.8 percent and 9874 points was also due to profits on the US stock exchanges. The Asian stock exchanges were already weaker.

The behavior showed a similar behavior as on Wednesday German stock market even before the stock exchange opened. The pre-market indicators slipped significantly after GfK market researchers published consumer sentiment for Germany. The virus crisis is depressing sentiment to the lowest level since the global financial crisis. According to GfK, consumers see “very difficult times” coming up economically for Germany. “Hard times will come for the trade as a whole,” concludes GfK.

And today it stands Publication of another important economic barometer step, a long-ignored stepchild in the market: It is the weekly initial applications for US unemployment benefits. These were neglected for a long time because in the past few years there was almost full employment in the USA. According to the CommerzbankAnalysts are likely to see applications increase to around three million for the week ending March 21, a 10-fold increase over the previous week. This is unlikely to support the stock markets.

So there is a lot to be said that this bear market in this country with all its consequences is likely to continue over a longer period of time. According to the Frankfurt Stock Exchange, the behavioral economist Joachim Goldberg expects only “rallies within the bear market” in the future, ie only interim price gains within a longer-term downward trend.

His reasoning: Both the “bears” that are betting on falling prices and the bulls that expect price gains have not separated from their commitments in the past few days. The profits with their purchased long and short products are apparently not enough for them. So there must be even larger price movements for one side or the other to sell.

Which naturally leads to the question: If the Dax has to fall below 8000 points, so that there are sustainable course gains again?

“Long-term capital inflows would be necessary for the Dax to get out of the worst,” says Goldberg. “And they only come when the conviction prevails that the corona pandemic has survived to some extent.”

Minus 26.23 percent, that’s how much the 30 DAX values ​​have lost in the past 20 days, as of Wednesday. The analysts at Landesbank Helaba calculated this. They best dressed Beiersdorf-Titles with a minus of 5.93 percent from the affair. The biggest loss was in the papers of MTU accept with a minus of 50.17 percent.

Look at other asset classes

New details on European Central Bank (ECB) bond purchase program influence the bond markets significantly. Now many restrictions no longer apply. The ECB can now buy more than a third of a country’s outstanding bonds. There may also be major deviations from the capital key to help countries particularly affected. In the future, bonds with a term of less than 70 days can also be bought.

Italian bonds with a maturity of two years benefited the most, with yields falling to 0.384 percent. At the start of trading this figure was still 0.8 percent, in the past week it was still over two percent. The yield on ten-year Italian bonds fell to 1.49 percent.

The Italian bond rally spread to other peripheral markets such as Portugal and Greece. The respective figures also fell significantly across the board.

In comparison, yields on the European core markets for government bonds such as Germany and France fell only slightly. The value for ten-year German government bonds fell to minus 0.3 percent.

Oil prices are slipping significantly again on Thursday. North Sea Brent dropped 1.3 percent to $ 27.02 a barrel, US WTI even fell 2.3 percent to $ 23.94. The prices of both varieties have already slipped by around 60 percent this year.

Given the rapidly shrinking demand and rising production, the outlook for oil prices remains negative. Estimated global oil demand will decline more than 14 million barrels a day in the second quarter, which should result in unprecedented inventory build-up.

Look at the individual values

Evotec: The shares lose 4.1 percent. The drug developer expects further strong organic growth in 2020. However, it is not yet possible to precisely quantify the effects of the corona crisis.

Deutz: In view of the corona pandemic, the engine manufacturer is suspending its forecast for the current year and shutting down large parts of its production from April 1, initially until April 17. The share declines by around three percent.

SMA: By contrast, the shares of SMA Solar. Despite the corona pandemic, the solar technology group is sticking to its annual forecast and expects an increase in sales and profits.

ABN Amro: Incredible, but true – gamble by a single customer in the United States has brought the Dutch bank a loss of $ 200 million. This will affect the results of the first quarter, said ABN Amro With. The customer had speculated with warrants and futures, the positions are now closed. Because many investors are probably wondering what the security of the trading systems is like, the share falls by 3.8 percent, making it the biggest loser in the European banking index.

Pfeiffer Vacuum: The vacuum pump manufacturer has collected its annual targets because of the corona crisis. According to the Management Board, the forecasts for 2020 with regard to sales growth, unchanged returns and investments in the order of magnitude between 40 and 60 million euros are invalid. He did not name new goals. The share loses 0.8 percent.

Cewe: Because of the uncertainties associated with the pandemic, the photo company has decided not to make a forecast. At the moment, the focus is on online orders and mailing. Nevertheless, the dividend is expected to rise for the eleventh time in a row, to 2.00 euros per share (from 1.95 euros previously). Investors acknowledge this with a plus of 0.5 percent.

Stock exchange expert in New York: “Nobody knows exactly how much the economy will collapse here”

What the chart technique says

Despite the price gains, the chart-technical picture does not yet give the all-clear. The Dax rose to 10,137 points on yesterday’s trading day. As a result, two resistances are gaining in importance: on the one hand, the downward price gap of March 12, which covers the range between 10,138 and 10,391 points; on the other hand the low of December 2018 with 10,279 points, the starting signal for the rally until mid-February 2020.

“This is the decisive hurdle in chart technology, the skipping of which would put the German standard values ​​on a quick recovery path,” say the technical analysts at Düsseldorfer Bank HSBC. Without a recapture, the coming trading days are likely to remain volatile.

Such downward price gaps arise when the daily low of the previous day is above the daily high of the subsequent trading day. The daily low of March 11 was 10,391 points, the high of the following trading day was 10,138 points. Such gaps are a quick re-evaluation of the market and therefore an important resistance according to chart technology.

On the underside, according to the HSBC, the Dax should return to crisis mode at prices below 9070 points.

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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Dax slips again – Zocker brings ABN Amro loss of millions, share loses significantly

Dusseldorf The price gains of the past two trading days have evaporated again. The Dax loses 2.5 percent in morning trading and stands at 9627 points.

The course of trading on Wednesday yesterday showed the typical behavior of a bear market: negative reports lead to a quick sell-out. An extremely weak Ifo index ensured that the index slipped by 650 points within a short period of time. By definition, the Dax has been in a bear market since mid-March because it slipped more than 20 percent from its record high (13,795 points) in mid-February – that was the case at around 11,000 points.

The fact that the leading German index Dax went out of trading on Wednesday after a final spurt of 1.8 percent and 9874 points was also due to gains on the US stock exchanges. The Asian stock exchanges are already trending weaker.

The behavior showed a similar behavior as on Wednesday German stock market even before the stock exchange opened. The pre-market indicators slipped significantly after GfK market researchers published consumer sentiment for Germany. The virus crisis is depressing sentiment to the lowest level since the global financial crisis. According to GfK, consumers see Germany facing “very difficult times” economically. “Hard times will come for the trade as a whole,” concludes GfK.

And today it stands Publication of another important economic barometer on, a stepchild of the market that has not been noticed for a long time. It’s the weekly initial jobless claims. They were ignored because in the past few years there was almost full employment in the USA. According to the Commerzbank– Analysts are likely to see applications for around three million by March 21, a tenfold increase over the previous week. This is unlikely to support the stock markets.

So there is a lot to be said that this bear market in this country with all its consequences is likely to continue over a longer period of time. According to the Frankfurt Stock Exchange, the behavioral economist Joachim Goldberg expects only “rallies within the bear market” in the future, ie only interim price gains within the longer-term downward trend.

His reasoning: Both the “bears” that are betting on falling prices and the bulls that are expecting price gains have not separated from their commitments in the past few days. The profits with their purchased long and short products are apparently not enough for them. Apparently there have to be even larger price movements for one side or the other to sell.

Which naturally leads to the question: If the Dax has to drop below 8000 points, so that there are sustainable course gains again?

“Long-term capital inflows would be necessary for the Dax to get out of the worst,” says Goldberg. “And they only come when the conviction prevails that the corona pandemic has survived to some extent.”

Minus 26.23 percent, as much as they have lost the 30 DAX values ​​in the past 20 days, as of Wednesday. The analysts at Landesbank Helaba calculated this. They best dressed Beiersdorf-Titles with a minus of 5.93 percent from the affair. The biggest loss was in the papers of MTU accept with a minus of 50.17 percent.

Look at other asset classes

Oil prices are slipping significantly again on Thursday. The North Sea variety Brent falls by minus 1.3 percent $ 27.02 barrel, the US variety WTI even by 2.3 percent to $ 23.94. The prices of both varieties have already slipped by around 60 percent this year.

Given the rapidly shrinking demand and rising production, the outlook for oil prices remains negative. Estimated global oil demand will decline more than 14 million barrels a day in the second quarter, which should result in unprecedented inventory build-up.

Look at the individual values

Evotec: The shares lose 1.1 percent. The drug developer expects further strong organic growth in 2020. However, it is not yet possible to precisely quantify the effects of the corona crisis.

Deutz: In view of the corona pandemic, the engine manufacturer is suspending its forecast for the current year and shutting down large parts of its production from April 1, initially until April 17. The stock is down three percent.

SMA: In contrast, the shares of SMA Solar rose by 8.6 percent. Despite the corona pandemic, the solar technology group is sticking to its annual forecast and expects an increase in sales and profits.

ABN Amro: Strange but true. Gambling by a single customer in the United States has caused the Dutch bank a loss of $ 200 million. This will affect the results of the first quarter, said ABN Amro With. The customer had speculated with warrants and futures, the positions are now closed. Because many investors are probably wondering about the security of the trading systems, the share falls by 4.4 percent.

Pfeiffer Vacuum: The vacuum pump manufacturer has collected its annual targets because of the corona crisis. The forecasts for 2020 for sales growth, unchanged returns and investments in the order of magnitude between 40 and 60 million euros are invalid, according to the Management Board. He did not name new goals. The stock loses 2.8 percent.

Cewe: Because of the uncertainties associated with the coronavirus pandemic, the photo company has decided not to make a forecast. At the moment, the focus is on online orders and mailing. Nevertheless, the dividend is expected to rise for the eleventh time in succession, namely to EUR 2.00 per share from EUR 1.95 previously. The investors acknowledge this with a small minus of 0.3 percent.

What the chart technique says

Despite the price gains, the chart-technical picture does not yet give the all-clear. The Dax rose to 10,137 points on yesterday’s trading day. As a result, two resistances are gaining in importance: First, the downward price gap of March 12, which spans the range between 10,138 to 10,391 points, and the low of December 2018 with 10,279 points, the starting signal for the rally until mid-February 2020.

“This is the decisive hurdle in chart technology, skipping it would put the German standard values ​​on a fast recovery path,” say the technical analysts at Düsseldorfer Bank HSBC. Without a recapture, the coming trading days are likely to remain volatile.

Such downward price gaps arise when the daily low of the previous day is above the daily high of the subsequent trading day. The daily low of March 11 was 10,391 points, the high of the following trading day was 10,138 points. Such gaps are a quick re-evaluation of the market and therefore an important resistance according to chart technology.

On the underside, according to the HSBC, the Dax should return to crisis mode at prices below 9070 points.

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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New measures by the US government are helping Wall Street

new York Wall Street prices rose strongly on Thursday after a weak start. One reason for this was apparently a US government press conference at which Treasury Secretary Steve Mnuchin gave details of how $ 500 billion was distributed to citizens. The FDA is also investigating the use of a malaria drug against the globally rampant lung disease Covid-19.

The US leading index Dow Jones opened 0.6 percent lower, but then turned 1.4 percent to 20,174 points in a volatile trade. The technology-heavy Nasdaq initially fell 1.4 percent, but then increased 2.6 percent to 7361 points. The broad-based S&P 500 only lost around percent and was last 0.8 percent firmer at 2417 points. Wall Street’s three main indices are still around 30 percent below last month’s record highs.

The FDA plans to begin clinical trials with the malaria drug Hydroxychloroquine to test its effectiveness against Covid-19. The head of the agency said it would probably take twelve months to get a license to use the corona virus. “We are very excited about hydroxychloroquine,” said Trump. “It could have a very positive effect. And the nice thing is: these drugs were already out there, so we know that these drugs are safe if people take them.” All obstacles should be removed.

The US central bank Fed is now expanding its dollar aid to the financial system to limit the economic damage resulting from the corona crisis. Special credit lines have been set up for nine other central banks. These are the central banks of Australia, Brazil, Denmark, Norway, Mexico, New Zealand, Singapore, Sweden and South Korea. The credit lines (swaps) are intended to provide the commercial banks in the respective countries and economic areas with dollar liquidity. The dollar is considered the world’s leading currency because it is used for many financial and commercial transactions.

Due to the great uncertainty surrounding the virus crisis, the banks want to build up large dollar stocks so as not to run into payment difficulties. The Fed wants to meet this high demand in order to keep the international financial system stable. Bottlenecks have occurred in many dollar liquidity markets in recent days.

Corona traces on the US job market

On the US labor market, which has been so resilient to date, there are first signs of a brake due to the corona crisis. Last week, 288,000 new Americans applied for unemployment benefits, the U.S. Department of Commerce said on Thursday. This is the highest value since September 2017.

The increase was much stronger than expected: economists surveyed by the Reuters news agency had only expected 220,000 after 211,000 in the previous week.

“The labor market situation is starting to deteriorate from a robust level,” said Helaba analyst Ralf Umlauf. “With the ongoing Corona crisis and the massive deterioration in sentiment, applications will probably continue to rise significantly in the next few weeks.”

At the same time, there is a strong downturn in the world’s largest economy. The economic index of the Philadelphia Central Bank, which received a lot of attention on the financial markets, plummeted in March from 36.7 points to 12.7 points. Here, experts had only expected a drop to 8.0 points. “The mood in manufacturing has the largest monthly decline since the time series was recorded and is now at the lowest level since August 2011,” said Helaba expert Umlauf.

Investors initially again sold massive amounts of paper from travel and leisure organizers. American Airlines secured another $ 1 billion in bank loans to survive the fight against the crisis. Nevertheless, the opening file lost another 10.6 percent, but then narrowed the minus to 0.6 percent.

The New York stock exchange owner Intercontinental Exchange plans to close the floor trading temporarily from next week to switch completely to electronic trading.

With agency material

More: Five reasons why the time of massive price losses should be over with the Dax

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Savings banks in Bavaria see themselves ahead of difficult times

savings bank

The Sparkassenverband Bayern is concerned about the future.


(Photo: AP)

Munich The Bavarian savings banks are preparing for a more violent headwind after another drop in profits. “The most difficult economic times are still ahead of us,” said Bavarian Sparkasse President Ulrich Netzer on Wednesday in Munich. The effects of low interest rates intensified because old investments with good interest expire. In addition, the opportunities to cut costs are largely exhausted. There are already the first institutions where the interest surplus no longer covers administrative expenses.

The savings banks would have to take countermeasures by boosting their sales and increasing prices. “Part of this also means that we terminate some old contracts and charge custody fees for large deposits,” Netzer defended the increasing spread of penalty interest.

Due to the low interest rates, the interest surplus of the 64 Bavarian savings banks – the most important source of income for the institutes – fell by 1.7 percent to 3.2 billion euros in 2019. The operating result before valuation also shrank by three percent to 1.6 billion euros due to increased administrative costs. The bottom line was 441 million euros.

In the debate about a central bank for savings banks, Netzer warned that progress would soon be made. “The window of opportunity in which we have the handle of action is not unlimited. We have to move forward soon. ”The Sparkasse organization must slim down, the creation of a central institution being an important component. “The savings banks need standardized processes, clear product landscapes and clear structures and also a better division of labor in a tight, targeted group organization so that they can concentrate even more on their customer relationship.”

Savings bank president Helmut Schleweis has been drumming for a top institute for a long time because of the low key interest rates and fierce competition, for which a merger of Dekabank and Landesbank Hessen-Thüringen (Helaba) should lay the foundation. The two institutes have been negotiating a merger since the beginning of the year. But many resistances have to be overcome. It is controversial, for example, which parts should be brought into a common money house, how the costs should be distributed and what the business model should look like.

Netzer demanded that the risks in the association organization in particular should be significantly reduced. After all, the savings banks would have had to stand up for them repeatedly. Most recently, NordLB had to be saved from collapse with billions.

More: The public banking sector is discussing a fundamental change. Internally, the project causes a lot of unrest.

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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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Savings banks in Hesse and Thuringia want to merge

Sparkassen Shield

The association head of the Sparkassen- und Giroverbands Hessen-Thüringen (SGVHT) Gerhard Grandke sees the merger of Helaba and Deka as “a preventive measure in a positive sense”.


(Photo: AP)

Frankfurt The savings banks in Hesse and Thuringia are behind a merger of the Landesbank Hessen-Thüringen (Helaba) and the fund service provider Dekabank. The association head of the Sparkassen- und Giroverbands Hessen-Thüringen (SGVHT), Gerhard Grandke, said on Friday: “We think it’s right, we get involved.” With almost 70 percent, the association is the largest Helaba shareholder.

Grandke further said he would like the two institutes to merge. “From our point of view, it makes economic sense to bring it together.” Both financial institutions are not in an emergency. A merger would be “a preventive measure in a positive sense”.

The Sparkasse organization is currently intensively discussing a merger of the two financial institutions. All regional savings bank associations nationwide are involved in Deka. However, some regional associations are skeptical or even opposed to a merger.

Two weeks ago, the Deka owners decided that the Deutsche Sparkassen- und Giroverband (DSGV) should “refine” the target image for a central institute. DSGV President Helmut Schleweis wants to push ahead with the consolidation of the Landesbanken, so that ultimately there is only one central bank for the savings banks.

In addition, it is to be examined “how a nucleus could be created for a Sparkassen-Zentralinstitut through an in-depth cooperation up to a merging of Dekabank and Helaba”.

Disagreement among Deka owners

However, according to the Handelsblatt, not all Deka owners were able to agree on this relatively soft formulation. Harald Vogelsang, CEO of the Hamburger Sparkasse and president of the Hanseatische Sparkassenverband, voted against the decision, as several people familiar with the subject said. The savings banks from East Germany and Schleswig-Holstein abstained.

SGVHT boss Grandke said that there are different interests in the Sparkasse organization. Everyone would have to agree to the new target image of a central institute. The head of the association warned of a long discussion. There should be “no endless story”. In his view, it must be clear by the summer break what a central institute could look like.

In addition to Helaba, there are currently three other large Landesbanken in the public sector: LBBW in Stuttgart, BayernLB in Munich and NordLB in Hanover. In contrast to Helaba, the respective regional savings banks associations do not hold the majority in these institutions.

There has already been a consolidation among Landesbanken, but only if banks were in difficult situations or even in difficulties. WestLB from Düsseldorf, once the largest Landesbank, was smashed in the wake of the financial crisis. With a view to a central bank for savings banks, Grandke spoke out against “dwarfing” such an institution.

Ultimately, this means: Grandke is against the fact that a merged bank from Deka and Helaba would be significantly reduced again in the course of a merger. Helaba essentially makes its money in the real estate business. He was in favor of merging – with one restriction: “I will not let both institutes talk me down.”

The savings banks in Hesse and Thuringia, like other credit institutions, are feeling the effects of negative interest rates. “Times are not easy for us,” said Grandke. The savings banks would do a lot of effort to counter this. “We will see that the results go down quite a bit.”

Although the savings banks have issued more new loans and increased their loan portfolio by almost six percent, the important interest result fell. The operating result before valuation, i.e. before depreciation on securities and loans, declined last year by seven percent to a good 900 million euros.

Another key figure makes it even clearer how much the permanent low interest rates affect the savings banks in Hesse and Thuringia. The ratio of operating profit to average total assets fell to 0.68 percent on average. The savings banks in some regional associations that have already presented annual results for 2019 look better. The key figure was 0.95 percent in East Germany, 0.87 percent in Westphalia and 0.75 percent in Baden-Württemberg.

More: Helaba plans to cut up to 400 jobs

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Volks and Raiffeisen banks

Dhe DZ Bank contrasts sharply with the high annual loss of Deutsche Bank and the decline in profit at Commerzbank. The top institute of the Volks- und Raiffeisenbanken doubled its profit in 2019. With 2.7 (previous year: 1.4) billion euros before taxes and 1.9 (0.9) billion euros after taxes, no other German bank should have earned more than DZ Bank – at most the state-owned KFW, which April announced their profit.

Hanno Mussler

Uwe Fröhlich and Cornelius Riese, who have headed DZ Bank as obviously a well-coordinated double head of the board since early 2019, dampened expectations for 2020 on Thursday. The start of the year went well. However, they expect strongly fluctuating capital markets and more write-downs on loans. “In 2020, we expect earnings within our sustainable earnings margin of 1.5 to 2 billion euros before taxes – but rather at the lower end.” However, it would not be the first time that the new top management team was deeply stacked. Although the group had already earned almost 1.5 billion euros in the first half of 2019, it only raised its forecast in November.

Basically comparable to Helaba

The fact that DZ Bank achieved the highest group profit since the merger with WGZ-Bank in 2016 is due to its broad base: as a commercial and Verbundbank that operates lending and capital market business alone (with large companies) and works together with the VR- Sufficient loans to banks (to smaller companies), DZ Bank is comparable to central banks of the Sparkasse like Helaba. In the meantime, it has come closer to the goal of achieving a market share of 25 percent in the domestic corporate customer business with 22 percent. The goal is to be achieved through further digitalization of the credit processes. There is room for improvement in the joint lending business with VR banks, which only makes up 14 billion euros. After DZ Bank had outsourced its payment transactions to Equens, the WGZ payment system has now been upgraded for real-time payments. It is “in prospect also for foreign business”, said Fröhlich.

Beautiful daughters bring a lot of profit

DZ Bank is also a control holding company for nine subsidiaries. The insurer R + V contributed the lion’s share of the group’s pre-tax profit with 1117 (413) million euros, followed by the fund company Union with 648 (502) million euros. Schwäbisch Hall, on the other hand, suffered a sharp 36 percent drop in profits to 189 million euros. Of all the DZ subsidiaries, the building society suffered the most from the low interest rate phase, as Riese reported. It will be counteracted with cost reductions, a throttling of the building society business and an expansion of the building loan business. Riese expects the interest surplus to fall two or three years, but Schwäbisch Hall will not slide into the red. In 2019, there was the transport finance provider DVB with 108 (130 million euros), which is now being managed on its own.

In 2019, DZ Bank AG earned 293 (362) million euros, which corresponds to a return on equity of between 5 and 6 percent. This makes DZ Bank as profitable as Helaba, whose consolidated profit is largely borne by the real estate business. This is operated in the DZ Group by its own real estate company DZ Hyp, which contributed 687 (232) million euros to the consolidated profit.

For the first time, DZ Bank reports the expenses it incurs for managing the Group separately: EUR 258 ​​(281) million, including interest expenses and bank levy. The legal separation between holding company and commercial bank actually promised to the owners of WZG-Bank is probably off the table. It is almost more difficult to split banks than to merge, said Riese, referring to a one-time three-digit million amount and ongoing double-digit million amounts of costs. The “virtual” separation now also creates “productive transparency”.

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