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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How professionals position themselves on the stock exchange

Frankfurt Stock Exchange

Many investors are puzzled as to where the markets will go.


(Photo: dpa)

Frankfurt The uncertainty is great. The oil price and many stock prices are in the basement. The mood among many managers is bad. The corona crisis keeps the financial markets in suspense every day. Many investors are now thinking more than ever about where to invest their money in these unstable times.

Because the violent ups and downs on the markets shows that there is still no peace on the stock exchanges. This leaves many investors in doubt about their previous investments. Keep or prefer to sell? This is an important question for many investors, especially with equities.

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Weak labor market data pull Wall Street into the red

new York The drastic job cuts in the US weighed on the US stock markets on Friday. Investors preferred to cash in on the bleak economic outlook.

The US leading index Dow Jones lost 1.7 percent to 21,053 points. The technology-heavy Nasdaq fell 1.5 percent to 7373 points and the broad S&P 500 lost 1.5 percent to 2489 points. Over the week, the S&P lost 2.1 percent, the Dow 2.7 percent, and the Nasdaq 1.7 percent.

Shortly before the opening of the US stock exchanges this Friday, the US government released the new job market data for March: After the outbreak of the coronavirus crisis, many more jobs were cut in the US than expected. Last month, 701,000 non-agricultural jobs were cut. Economists surveyed by Reuters had only expected 100,000 in March.

“The job report already gives an idea of ​​the earthquake and aftershocks that are sweeping the US job market,” said Joe Brusuelas, chief economist at asset manager RSM. “What we’re seeing right now is the biggest bloodletting on the American job market since the Great Depression.”

In addition, in the past two weeks alone, ten million people have registered as unemployed in the United States – more than ever before. However, the effects of this high number of first-time job applications on unemployment assistance are hardly reflected in the unemployment figures. “The cut-off date for the so-called ‘payrolls’ was before the initial applications exploded. These figures will only be fully reflected in the next month, “had CommerzbankEconomist Bernd Weidensteiner already warned before the publication. However, the unemployment rate rose from 3.8 percent to 4.4 percent.

For the stock exchanges, the shocking numbers could also be lucky in misfortune, said Timo Emden, market analyst at the analyst house of the same name. “The more the global economy suffers from the effects of the coronavirus pandemic, the greater the hope for further central bankers’ aid.”

According to experts, the worst is still ahead, as the effects of the pandemic in March are not yet fully apparent. “The job cuts still look harmless compared to what lies ahead,” said VP Bank economist Thomas Gitzel. The analysts of the US bank Morgan Stanley hold a 38 percent drop in US economic output in the second quarter is possible – that is more than it has been since the post-war year 1946. In view of the misery, some experts speculated on further central bank aid.

In Europe, too, the economy is collapsing, and purchasing manager indices have collapsed. “Our data indicate a slump in the euro economic output of almost ten percent,” said Markit chief economist Chris Williamson. “Worse seems inevitable in the near future.”

Look at other asset classes

According to calculations by the investors Bank of America nevertheless a little courage again and resort to bond funds that invest in corporate papers with poor credit ratings. In the week to Wednesday, inflows totaled $ 6.9 billion, more than ever.

Equity funds attracted $ 8.1 billion more than they had in seven weeks. At the same time, cash was also in demand: a new record was set here at $ 194.2 billion.

A rally on the oil market proved to be a support for the stock market. Brent North Sea oil rose 36.8 percent over the week, the largest relative increase in its history. This also applied to the US futures with an increase of 31.8 percent.

The background to this is speculation that the major producing countries (OPEC +) will soon agree on further production cuts. According to insiders, throttling by ten million barrels a day is under discussion. Shares in oil companies such as Diamondback Energy, Apache and Occidental climbed by up to 8.7 percent.

Look at individual values

Tesla: Advances in Model Y production encouraged investors to join Tesla. The shares of the electric car maker rose by 5.6 percent. Manufacturing and delivery were ahead of schedule. The Tesla factory in Shanghai also achieved record production despite setbacks.

Walt Disney: The entertainment group went down 3.2 percent. Employees of the entertainment giant, who is particularly suffering from the closure of theme parks and cinemas, should stay at home from April. In addition, Disney postponed the launch of several feature films, sometimes by a year.

Under Armor: The sporting goods manufacturer also wants to release some of its employees, at least temporarily. The paper dropped by more than three percent.

More: The fear of an emerging market crisis is growing

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Dax slumps more than ten percent

Dusseldorf The downward slide on the German stock market continues unabated. Loses in the afternoon trade the Dax 5.8 percent and stands at 8690 points. The leading index has thereby made up for a large part of its losses. Because the daily low was shortly after the opening of the US stock exchanges at 8255 points, a decrease of more than ten percent.

Infineon is the biggest loser with almost 14 percent, the minus has meanwhile been over 17 percent. In the MDax are the airport operators Fraport with minus 14.6 percent and the real estate group Aroundtown with minus 17 percent by far the biggest losers.

Four weeks after its record high of 13,795 points, the Dax is more than 40 percent lower due to the coronavirus pandemic, near a five and a half year low of 8255 points. Never before in its history has the German leading index gone so drastically downhill. With a minus of almost 37 percent since the beginning of the year, it is also heading for its blackest quarter.

Last Friday, the leading German index showed the first signs of stabilization when it closed the trade at least with a small plus after high profits in the meantime. Final result: 0.8 percent with 9232 meters. After the exchange, the Frankfurt benchmark even rose to 9630 points around 10 p.m. on Friday. But that’s no longer an issue.

The reaction of the markets to the drastic cut in interest rates in the USA to almost zero percent on Sunday evening shows that the problems cannot be solved with a loose monetary policy. The first rate cut in the United States a few days ago had not calmed the markets, but further aggravated the downward slide.

“The US Federal Reserve did not help calm things down,” commented the chief economist at the VP Bank, Thomas Gitzel, after the further rate cut. Taking just such a clear step just a few days before the regular interest rate decision suggests stress.

The Japanese central bank also eased its monetary policy further on Monday: Among other things, it ramped up the purchases of listed funds, so-called ETFs, and other risky investments. The markets in Asia already slipped significantly. The Chinese indices lost around four percent, although the corona virus hardly plays a role in the face of a few new cases.

The important question in Europe after the many border closings is: How long do these last? “According to the logic with which governments are currently introducing restrictions, they have been founded for a very, very long time,” says CommerzbankForeign exchange analyst Ulrich Leuchtmann.

As in the financial crisis, investors should keep an eye on banks’ prices. Because since the beginning of the year, the Stoxx 600 banks have slumped around 40 percent. The significant gains last Friday meant only a small interim recovery. The Deutsche Bank share lost around ten percent in morning trading and is now only 3.8 percent in the red. Commerzbank papers lose 6.7 percent. The European banking index loses 11.4 percent.

The hardest hit are the banks in Greece, whose share prices have since fallen by around 18 percent. As a result, the Greek stock exchange index ASE also falls by more than 11 percent and is the European selection index with the greatest minus.

A worrying fact is that credit default insurance, so-called credit default swaps (CDS), have skyrocketed in the past few days: today they signal an increasing likelihood that the equity cushion built up in recent years will not be sufficient to cover all banks without a capital shortage through a potentially drastic corona crisis.

In addition, there is a higher risk provision for loans at risk of default if companies run into economic problems. In addition, interest rates are likely to remain low for longer. The banks’ margins will therefore come under greater pressure than before. The banks may have significantly strengthened their resilience since the financial crisis. But the massive losses on the stock market show that confidence in the stability of the financial system is still fragile.

The fear of the economic consequences of the coronavirus pandemic is also causing insurers to plunge again. The European industry index falls by almost 14 percent. It is the second largest drop in price in its history. US insurers like AIG and MetLife lose around 15 percent each in advance. The industry faces high payments from credit and trade insurance. In addition, they lose the income from investments.

Panic in the markets at record levels

The nervousness on the stock markets has reached a higher level than during the financial crisis. The volatility index VDax, the nerve barometer of the stock exchange, rose today by more than 20 percent to 93.30 points. Investment professionals have never shown such panic. Because during the financial crisis this was a maximum of 85.12 percent.

The higher the VDax, the higher the price fluctuations expected by investment professionals in the coming days and weeks. The value is calculated from the options actually traded on the Frankfurt futures exchange.

The credit default insurance policies of European companies continue to become more expensive. The “Markit iTraxx Europe Crossover” index, which is regarded as a barometer for the hedging costs of European companies with a rating in the junk range, rose by 79 basis points to 602 basis points. This is the highest level since 2012. A corresponding financial company index is increasing 47 basis points to 315 basis points.

Look at other asset classes

Because of the second drastic US interest rate cut within two weeks, the controls Monday’s exchange rate for the largest daily loss for over three years. The dollar index, which reflects the price of major currencies, loses 1.1 percent to 97.645 points. In return, the euro rose 0.8 percent to $ 1.1199.

Oil prices fell significantly on Monday despite another massive rate cut in the US to support the economy. In the morning, a barrel (159 liters) of North Sea Brent cost $ 32.27. That was $ 1.58 less than on Friday. The price of a barrel of American WTI fell 96 cents to $ 30.77.

Oil prices fell Monday morning, despite President Donald Trump announcing measures to support oil prices on Friday. According to reports from last night, the US is currently preparing to buy 77 million barrels of crude oil on the market in the next two weeks to top up the country’s emergency reserve.

In the bond market, investors are likely to be more concerned about the future debt sustainability of the individual euro countries, as budget deficits are likely to increase. Austria, for example, expects a strong increase. Portugal expects additional charges of 300 million euros. Accordingly, the yield on ten-year government bonds from Portugal has risen from 0.4 percent to currently 1.008 percent since Thursday.

The yield on ten-year Italian government bonds was now 2.166 percent on Monday. Last Thursday, this figure was 1.12 percent. The yield on Italian bonds is currently at the level of Greek government bonds.

The appearance of gold as a safe haven and crisis currency gets the first scratches. Because despite the high stock markets, the price for the precious metal is now around four percent and is quoted at $ 1,486 per troy ounce.

Gold already recorded the biggest weekly loss since 2011 with a minus of 8.6 percent. Commerzbank still attributes this to sales of speculative financial investors in order to meet margin calls in other markets (“margin calls”).

Sales now even seem to spill over to exchange-traded index funds (ETFs): the gold ETFs recorded by the Bloomberg economic service reported the largest daily outflow since December 2016 at 17 tons.

There was a similar pattern of behavior in gold during the 2008 financial crisis. Back then, gold recovered relatively quickly after the sharp decline. If the scenario repeats itself, gold offers an attractive entry opportunity.

Look at the individual values

Tui: The tourism group stops most of its business because of the corona virus and applies for government aid to bridge it. All package tours and cruises do not take place for the time being due to the requirements of many governments to contain the virus, hotels are being closed. The stock has now slipped by more than 35 percent and is currently only 15.6 percent in the red.

Salzgitter: The German steel group slipped into the red last year. The pre-tax loss was around 253 million euros, as the company announced. In the current year, the group continues to aim for a balanced pre-tax result, but announced that the effects of the coronavirus pandemic could not yet be assessed. The stock loses 4.8 percent.

Talanx: The insurance group increases the dividend for the past financial year by five cents to EUR 1.50 per share. Nevertheless, the paper loses around 12.7 percent. The Hanover Group is sticking to its 2020 targets. The goal was valid as long as the corona pandemic did not result in any major upheavals on the markets Talanx With. The “tightened low interest rate phase” will burden the result with around 25 million euros.

Wacker Neuson: Under the impression of the corona virus pandemic, the construction machinery manufacturer fears a decline in sales and profits, which investors acknowledge with a minus of 10.2 percent in the share. The Management Board expects that the production figures planned for 2020 cannot be achieved due to bottlenecks in the supply chains and that individual sales markets will be weakened considerably.

What the chart technique says

In the past 17 trading days, the German stock index has dropped 14 times with a minus. The stock barometer is still far from stabilizing. Chart technology and fundamental reasons are currently irrelevant to investors. In terms of charts, we have a bear market as the major indices are now more than 20 percent below their all-time highs. In order to take the greatest pressure off the Dax, at least one trading day without a new low is required.

High dividend yields

Is there any good news at all? Yes, if you just look at dividend yields. A few weeks ago, shares were only bought because interest investments have become unattractive. And because there is currently no better alternative in terms of dividend yield.

And this criterion has improved significantly after the price drops.

Asset manager Marc-Oliver Lux has a good tip when it comes to dividend yields for investors who make part of their livelihood with the dividend.

Because every country has its own rhythm when it comes to dividends. In Germany, the money is usually paid out in one go after the Annual General Meeting. High season is therefore in April and May. In the United States, companies typically stretch their payouts over four quarters. Instead of a single large transfer, there are four smaller payment days.

Corona briefing

Those who skillfully put together their portfolio can even collect quarterly dividends every month. Three shares are enough. An example: Cisco Systems usually pays in January, April, July and October; the telecom group Verizon in February, May, August and November; Royal Dutch Shell in March, June, September and December.

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 slumps more than eight percent

Dusseldorf The downward slide on the German stock market continues unabated. Slips in morning trading the Dax below the 9000 point mark and is down 7.8 percent at a rate of 8,622 points. The Dax reached its low for the day at 9:30 a.m. with 8,414 points, a decrease of around 8.5 percent. All 30 DAX values ​​are in the minus, with around three percent Adidas shows the smallest minus. Infineon and MTU lose more than 11 percent.

Last Friday, the leading German index showed the first signs of stabilization when it closed the trade at least with a small plus after high profits in the meantime. Final result: 0.8 percent with 9232 meters. After the exchange, the Frankfurt benchmark even rose to 9630 points around 10 p.m. on Friday. But that’s no longer an issue.

The reaction of the markets to the drastic cut in interest rates in the USA to almost zero percent on Sunday evening shows that the problems cannot be solved with a loose monetary policy. The first rate cut in the United States a few days ago had not calmed the markets, but further aggravated the downward slide.

“The US Federal Reserve did not help calm things down,” commented the chief economist at the VP Bank, Thomas Gitzel after the further rate cut. Taking just such a clear step just a few days before the regular interest rate decision suggests stress.

The Japanese central bank also eased its monetary policy further on Monday: Among other things, it ramped up the purchases of listed funds, so-called ETFs, and other risky investments. The markets in Asia already slipped significantly. The Chinese indices lost around four percent, although the corona virus hardly plays a role in the face of a few new cases.

The important question in Europe after the many border closings is: How long do these last? “According to the logic with which governments are currently introducing restrictions, they have been founded for a very, very long time,” says CommerzbankForeign exchange analyst Ulrich Leuchtmann.

As in the financial crisis, investors should keep an eye on banks’ prices. Because since the beginning of the year, the Stoxx 600 banks has collapsed more than a third. The clear gains last Friday meant only a small interim recovery. The Deutsche Bank share loses around ten percent in morning trading and Commerzbank papers around nine percent.

The hardest hit are the banks in Greece, whose share prices fall by around 18 percent. As a result, the Greek stock exchange index ASE also falls by more than 11 percent and is the European selection index with the greatest minus.

The European banking index loses more than twelve percent. The bank with the lowest minus comes from Italy: The share price of Banco BPM has “only” a minus of 8.2 percent.

A worrying fact is that credit default insurance, so-called credit default swaps (CDS), have skyrocketed in the past few days: today they signal an increasing likelihood that the equity cushion built up in recent years will not be sufficient to cover all banks without a capital shortage through a potentially drastic corona crisis.

Look at other asset classes acn

Because of the second drastic US interest rate cut within two weeks, the controls Monday’s exchange rate for the largest daily loss for over three years. The dollar index, which reflects the price of major currencies, loses 1.1 percent to 97.645 points. In return, the euro rose 0.8 percent to $ 1.1199.

Oil prices fell significantly on Monday despite another massive rate cut in the US to support the economy. In the morning, a barrel (159 liters) of North Sea Brent cost $ 32.27. That was $ 1.58 less than on Friday. The price of a barrel of American WTI fell 96 cents to $ 30.77.

Oil prices fell Monday morning, despite President Donald Trump announcing measures to support oil prices on Friday. According to reports from last night, the US is currently preparing to buy 77 million barrels of crude oil on the market in the next two weeks to top up the country’s emergency reserve.

In the bond market, investors are likely to be more concerned about the future debt sustainability of the individual euro countries, as budget deficits are likely to increase. Austria, for example, expects a strong increase. Portugal expects additional charges of 300 million euros. Accordingly, the yield on ten-year government bonds from Portugal has risen from 0.4 percent to 0.925 percent today.

The yield on ten-year Italian government bonds has now risen to 2.07 percent. Last Thursday, this figure was 1.12 percent. The yield on Italian bonds is currently at the level of Greek government bonds.

Look at the individual values

Tui: The tourism group stops most of its business because of the corona virus and applies for government aid to bridge it. All package tours and cruises do not take place for the time being due to the requirements of many governments to contain the virus, hotels are being closed. The stock is now slipping by more than 35 percent.

Salzgitter: The German steel group slipped into the red last year. The pre-tax loss was around 253 million euros, as the company announced. In the current year, the group continues to aim for a balanced pre-tax result, but announced that the effects of the coronavirus pandemic could not yet be assessed. The share loses around eight percent.

Talanx: The insurance group increases the dividend for the past financial year by five cents to EUR 1.50 per share. Nevertheless, the paper loses around nine percent. The Hanover Group is sticking to its 2020 targets. As long as the corona pandemic did not result in any major upheavals on the markets, the goal was shared Talanx With. The “tightened low interest rate phase” will burden the result with around 25 million euros.

Wacker Neuson: Under the impression of the corona virus pandemic, the construction machinery manufacturer fears a decline in sales and profits, which investors acknowledge with a minus of 7.5 percent in the share. The Management Board expects that the production figures planned for 2020 cannot be achieved due to bottlenecks in the supply chains and that individual sales markets will be weakened considerably.

What the chart technique says

In the past 17 trading days, the German stock index has dropped 14 times with a minus. The stock barometer is still far from stabilizing. Chart technology and fundamental reasons are currently irrelevant to investors. In terms of charts, we have a bear market as the major indices are now more than 20 percent below their all-time highs. In order to take the greatest pressure off the Dax, at least one trading day without a new low is required.

High dividend yields

Is there any good news at all? Yes, if you just look at dividend yields. A few weeks ago, shares were only bought because interest investments have become unattractive. And because there is currently no better alternative in terms of dividend yield.

And this criterion has improved significantly after the price drops.

Asset manager Marc-Oliver Lux has a good tip when it comes to dividend yields for investors who make part of their livelihood with the dividend.

Because every country has its own rhythm when it comes to dividends. In Germany, the money is usually paid out in one go after the Annual General Meeting. High season is therefore in April and May. In the United States, companies typically stretch their payouts over four quarters. Instead of a single large transfer, there are four smaller payment days.

Corona briefing

Those who skillfully put together their portfolio can even collect quarterly dividends every month. Three shares are enough. An example: Cisco Systems usually pays in January, April, July and October; the telecom group Verizon in February, May, August and November; Royal Dutch Shell in March, June, September and December.

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 closes in the red – Adidas stock biggest loser

Dusseldorf The Dax was back in the red at the end of the day and was down 0.4 percent at 10,439 points. The Euro Stoxx 50 also did not make it into the profit range and also closed 0.4 percent lower at 2756 points.

Both indices were able to reach their interim positive daily high – the Dax had 10,761 points and the Euro Stoxx 50 2999 pointsdo not hold until the markets close. The renewed downward moves on Wall Street pulled both stocks into the minus in the afternoon.

Accordingly, the hope of measures by governments and central banks to combat the economic consequences of the corona pandemic only had a short-term effect on the German stock market. As is usual in times of crisis, investors react to relevant news with hectic purchases and sales. A surprising rate cut in the UK caused European indices to rise.

At times, the stock markets were given further impetus by reports, according to which ECB chief Christine Lagarde announced measures of the central bank in a video conference with the 27 heads of state and government of the EU on Tuesday evening. The ECB meets on Thursday.

Lagarde warned the heads of state and government against the fact that the problems caused by the corona virus will not make it as far as it did in the financial crisis a good ten years ago. At the conference call, the ECB president informed the interlocutors of the dynamics of the current situation and urged them to act quickly, as informed circles confirmed. The Bloomberg news agency had previously reported on this.

One topic was said to have been possible credit guarantees from the member states. A major concern of the ECB is that banks could restrict lending in the current situation. The central bank can support lending by providing cheaper financing. The biggest obstacle, however, is likely to be that the banks fear increasing risks, for example due to production losses at companies, and therefore remain cautious. It would help here if the states covered certain risks. Another idea is to temporarily suspend guidelines that prohibit state aid.

EU Commission President Ursula von der Leyen has already announced a fund of 25 billion euros after discussions with the leaders of the 27 EU countries. 7.5 billion of these are said to be available immediately.

In response to the economic consequences of the corona virus, the Bank of England cut its base rate on Wednesday by 50 basis points to 0.25 percent. Even though the effects of the economic shock from the Covid-19 virus disease are highly uncertain, the economy in the UK is likely to weaken significantly in the coming months, the central bankers warned.

Bank of England cuts interest rates

The British stock index FTSE initially rose two percent as a result of the interest rate cut, then turned negative by 0.2 percent. The British pound initially weakened on the foreign exchange market, but later recovered. The dollar’s currency rose 0.2 percent to $ 1.2939.

“The central banks are now helping out. That’s a good thing, because it shows willingness to act, ”said Thomas Gitzel, chief economist at VP Bank. “However, monetary policy can currently only help to a limited extent. Companies, especially small and medium-sized companies, need access to liquidity. This has to come from the states. In Europe there is a relatively dense network of government development banks. ”

Italy also plans to increase aid to the troubled economy for the fourth time in a month. Prime Minister Giuseppe Conte named a sum of 25 billion euros that is available for this. The Milan stock exchange initially rose 2.4 percent, then briefly turned negative and then ended up again at 0.3 percent.

Italy is suffering from the corona virus like no other country in Europe. The number of infected was over 12,000 on Wednesday evening, 827 people died from the virus. A travel ban applies to the whole country.

Trump is not yet delivering

The US stock markets resumed their downward trend on Wednesday. After the WHO officially declared the corona virus a pandemic, prices slipped even further than at the start of trading. Shortly after the announcement, it was almost five percent for the Dow Jones, about four percent for the Nasdaq and the S&P 500 moved to around 4.5 percent.

Previously, Dow Jones, Nasdaq and S&P 500 started with losses of up to two percent. With this, investors reacted to the behavior of Donald Trump, who did not appear himself at the highly anticipated press conference on Tuesday, but instead sent his deputy Mike Pence. This is to coordinate the measures and reported on Trump’s talks with Congress representatives. No concrete measures were presented.

Investors are so nervous this week because the fear of the economic consequences of the corona virus is causing the oil price war between Saudi Arabia and Russia. The prices for the raw material dropped again on Wednesday: The barrel (159 liters) of the North Sea variety Brent cost $ 35.95, 3.5 percent less than the previous day. The Saudi state-owned company Saudi Aramco announced that it plans to increase its production by one million barrels to 13 million barrels a day. Fearing dwindling profits, investors withdrew from the world’s largest oil producer. Shares fell 6.6 percent on the Riyadh stock exchange.

In view of this mixed situation, many investors may find it difficult to keep their nerves. “We strongly advise you not to sell out of panic and fear because no one knows the scale of the virus or the oil price war,” said Sandip Bhagat of Whittier Trust on Bloomberg TV. “We know that the price adjustment will be slow, painful and lengthy.”

What the chart technique says

What in the Dax chart technically speaks for a calming in the coming trading days: Meanwhile, it is more than 15 percent below the 200-day line, the indicator for the long-term trend. The Frankfurt benchmark last reached such a gap in December 2018, followed by significant price increases.

Almost all technical indicators have reached negative extreme values, which signals a strong countermovement. However, yesterday there was a new correction low of 10,424 points, an indication of a weak market. A first relaxation signal would only be a trading day without a new low.

Look at the individual values

Sporting goods manufacturer: At Adidas the The company from Herzogenaurach warned when submitting its annual balance sheet that sales in the People’s Republic in the first quarter were 800 million to one billion euros lower than in the previous year due to the corona virus. The Adidas-Share lost 9.1 percent and was the biggest Dax loser. The rival puma gave up hope that the situation around the virus outbreak would quickly normalize again. Puma stocks fell 4.5 percent.

Also the shares of the US sporting goods manufacturer Nike were under pressure after the rivals’ gloomy outlook. The paper slid violently by almost five percent to $ 84.01 at the opening in New York.

Lanxess: The corona virus crisis has left the specialty chemicals company Lanxess Traces in the balance sheet. In the current financial year, earnings are therefore expected to be between EUR 50 and 100 million. Even though Lanxess is expecting a stable operating business development in 2020, an overall decline in adjusted operating profit (Ebitda) to 900 million euros to 1.0 billion euros is expected.

For the first quarter, burdens of around 20 million euros are currently expected. In the past year, adjusted operating profit rose by a good three percent to EUR 1.019 billion. Lanxess thus achieved its forecast. The Lanxess papers recently gained 0.1 percent.

Hannover Re: The reinsurer increases the dividend after a record result in 2019. The distribution of profits to shareholders, including the special dividend, is expected to increase to EUR 5.50 (previous year: 5.25) per share. The world’s third largest reinsurer increased its surplus last year by a fifth to 1.28 billion euros, the reiterated Hannover Re the preliminary figures presented in early February.

The company also kept its forecast of a consolidated profit of around 1.2 billion euros this year and a growth in currency-adjusted gross premium of around five percent TalanxDaughter stuck. Hannover Re’s shares initially rose, but then lost about 2.1 percent.

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Handelsblatt analyst check

The US investment bank Goldman Sachs has included the Roche share in its “Conviction Buy List”. The rating was left on “Buy” with a target price of CHF 400. The growth prospects for the European pharmaceutical sector are largely unaffected by the latest negative factors, analyst Keyur Parekh wrote in an industry study available on Wednesday. The shares of Sanofi and Roche relatively safe haven in the current storm. Roche in particular is characterized by its very defensive profile.

Of 27 analysts, 25 recommend buying the share and two recommending it. Click here for the Handelsblatt analyst check.

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