All 30 Dax values are in the plus. Bank stocks are also among the winners. The European banking index rose 6.4 percent, led by the last shaken Natixis-Share from France with an increase in value of 14 percent.
Last Friday, the leading German index closed 0.5 percent lower at 9526 points. However, there were signs of easing after the index failed to respond to the miserable US job market data.
The stock exchanges in Asia closed clearly in positive territory, but is not traded in China due to public holidays. After the losses last Friday, the futures contracts for the New York stock exchanges showed strong gains: According to this, the stock market index should S&P 500 3.6 percent higher on Monday open.
The reason for the significant increase in the German stock market: Falling numbers in some European countries give rise to hope that the worst in the corona crisis could be over. They are in Germany alone New infections for the fourth day in a row declining. The Robert Koch Institute (RKI) reported another 3677 confirmed cases this Monday. The number rose to a total of 95,391. The increase was less than the 5936 new infections announced on Sunday.
But such numbers are already a thing Exit scenario in terms of quarantine measures conceivable? Chancellor Angela Merkel named the only benchmark for answering this question. In her video message from the previous weekend, she indicated that with a growth rate of seven percent per day (“doubling within ten days”) the restrictions could be relaxed.
“We should already be there,” says CommerzbankForeign exchange analyst Ulrich Leuchtmann. In his view, there is growing concern that there is no end in sight in this country. His calculation: With 6,000 new infections per day, it would take between 18 and 24 years in Germany until sufficient herd immunization was achieved. “Hopefully you made yourself comfortable in your home office,” is his humorous comment.
The upward movement on the Frankfurt Stock Exchange should therefore only be a relief rally for the time being be within the medium term downtrend. In order to achieve a real turnaround, a Covid-19 drug would probably have to be brought onto the market or at least an approximate end to the economic restrictions can be foreseen. Before that, the equity markets are unlikely to rise sustainably.
This view also confirms investor sentiment. After evaluating the current Handelsblatt survey Dax-Sentiment, Stephan Heibel advises: “If you have positions in your portfolio with which you would probably not get through another sell-off wave nervously, then you should part with it today.”
German industry is doing better than expected, even though new business declined before the corona crisis began. The companies collected 1.4 percent fewer orders in February than in the previous month, but economists had expected a decrease of 2.4 percent, after a strong order increase of 4.8 percent in January.
Given the global economic shock from the corona pandemic, however, is one Incoming orders slump in March and April as well as overall strong production losses in the first and second quarters.
Look at individual values
Commerzbank: The corona crisis gives the bank one large influx of private customers. The bank and her daughter have had since the beginning of the year Comdirect 130,000 new private customers won, mainly online, said private customer board member Michael Mandel. In the last week of March alone, 10,000 customers were added. “Obviously, a lot of people currently have time to deal with their banking business.” The share price rises by 7.1 percent.
Evotec: The biotech company is building a new mainstay in promising gene therapy business on. In the Austrian town of Orth an der Donau, a team of more than 20 scientists is to advance the research and development of gene therapy-based projects. It has already secured a first order: The Japanese pharmaceutical company Takeda has entered into a long-term research alliance Evotec a. The share rises by around three percent.
The stock is interesting because several hedge funds have bet on falling Evotec prices. As of last Friday, this so-called short sale rate was 7.3 percent, an unusually high figure.
Thyssen-Krupp: With a plus of more than twelve percent, the shares of the former industrial icon were among the big winners in the MDax small cap index. On the one hand, industrial papers were in demand as losers in the crash phase on Monday. The automotive supplier Hella and aircraft manufacturer Airbus also benefit from this. But at Thyssen-Krupp, too, hedge funds play a crucial role in their betting on falling prices to ensure that trading is volatile.
Betting on falling prices, known in the technical sense as short sales, works according to the following principle: Investors borrow shares from companies where they expect price losses. They sell these papers afterwards and hope that the prices will drop. Then you can buy the shares back later and give them back to the lender. The difference between the short sale and the subsequent buyback is then the profit.
Already at the end of March, Thyssen-Krupp papers peaked by almost 50 percent on two days with a high trading volume. As at the end of March, shares are likely to have bought back on Monday. The result will be available on Wednesday at the latest when the funds have to publish their short selling rates.
Rolls-Royce / PSA: Securing new credit lines with the British engine manufacturer ensured the individual values Rolls-Royce as well as the French car company PSA for buoyancy. Rolls-Royce stocks shot up up to 21.2 percent after the supplier left airbus and Boeing secured another £ 1.5 billion line of credit. However, the long-established company has lost more than half of its market value this year and is cutting its dividend for the first time in over 30 years.
Peugeot parent PSA also secured another three billion euros in loans to better position itself against the financial impact of the corona crisis. PSA shares rose as a result up to 12.4 percent.
Look at other asset classes
The gold price is rising again. A troy ounce now costs $ 1,630, an increase of 0.7 percent. At the beginning of March, the price was just under $ 1,500 because investors needed cash after the price slump in the stock markets.
The gold ETFs (exchange-traded index funds) recorded by the economic service Bloomberg recorded inflows of twelve tons on Friday. It was 47 tons in the entire week. The speculators, however, remain cautious.
Oil prices are falling again. A meeting scheduled for Monday of oil-producing countries that have merged into the so-called Opec plus has been postponed to Thursday.
In early Monday trading, a barrel (159 liters) of North Sea Brent cost $ 32.90 to ship in June, down 3.5 percent. The price of a barrel of American WTI with delivery in May dropped 2.7 percent to $ 27.50.
US President Donald Trump threatened tariffs on crude oil imports. “I’ll do whatever it takes,” Trump said at the White House on Saturday night. The background is the drastic drop in prices on the crude oil market. It goes back to a double crisis, consisting of a massive drop in demand due to the corona pandemic and the price war on the oil market. The US fracking industry in particular is suffering from the low prices.
Given the increasing optimism in the fight against the coronavirus pandemic, investors are withdrawing from government bonds that are considered a “safe haven”. In return, most yields on bonds in top-rated eurozone countries rose two to three basis points. Ten-year German government bonds yielded minus 0.4 percent three basis points firmer and thus significantly higher than the record low of minus 0.91 percent reached a month ago.
What the chart technique says
With the plus of the opening of trading on Monday, the downside risk for the leading German index will decrease. “Even if the picture brightens at short notice, it should be noted that all Dax values are still below both the 200 and the 50-day average”, say Helaba’s technical analysts. With 23 titles, the 50 line also runs below the 200 day line. “In the past, such pronounced constellations only allowed limited scope on the top,” is their assessment.
According to the chart technique, the range from 10,138 up to and including 10,391 points is decisive. Among other things, there is the low of December 2018 with 10,279 points, the starting signal for the rally until mid-February 2020 with the previous record high. “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.
The small downward price gap from last Tuesday was closed, also a positive sign. 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 on Tuesday was 9703 points, the following high of Wednesday was reached at 9686 points.
“When planning wealth, the rule is: never get out completely!”
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.