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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Fall in oil prices causes falling share prices

HSubstantial upheavals on the oil market hit the German stock market heavily on Tuesday. Unexpectedly brighter economic expectations did not help. The Dax increased its losses to 3.2 percent in the afternoon at 10,331 points.

The EuroStoxx 50 as the leading index of the euro zone lost as much as the Dax. For the M-Dax of medium-sized German values, the downturn was not quite as steep with minus 1.7 percent to 22,078 points.

There is currently a wide gap between supply and demand on the oil market. The corona pandemic is paralyzing the American economy, which is already floating in cheap oil – the need for the raw material is falling sharply as a result, and oil storage threatens to overflow. Should America’s oil industry with its many smaller companies come under even greater pressure, experts fear a wave of bankruptcies that could possibly also burden the financial sector.

Meanwhile, after a massive slump in the previous month due to the corona crisis, the economic expectations of the Mannheim ZEW Institute brightened significantly in April. The indicator rose much more strongly than analysts expected. “But it has to be taken into account that the rise in expectations is based on a dramatic slump in the situation,” said the economists at Helaba.

In the Dax, the focus was on SAP papers, less with final quarterly figures and more with personnel. So it irritated Börsianer that Jennifer Morgan left the software company as co-CEO and Christian Klein would be the sole boss after the two had started as a duo just over half a year ago. Barclays analyst James Goodman spoke of a big surprise. Morgan did a very good job. It was also criticized that SAP had lowered expectations for the free inflow of funds. The shares lost a good three percent.

Sartorius’ shares reached a further high at EUR 273, even though the group is reviewing the dividend. The pharmaceutical and laboratory equipment supplier now promises stronger sales growth for the full year due to the acquisition of Danaher parts. An expert also highlighted the strong order intake in the field of bioprocess technology. Most recently, Sartorius shares gained just under four percent.

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To detailed view

In view of the concerns about the situation of the global economy associated with the oil price shock, cyclical values ​​in particular came under pressure. This was shown in the Dax by the shares of Infineon and Volkswagen, the weakest index values, each losing more than six percent. In the front of the Dax, the Beiersdorf shares were a typically defensive value. The consumer goods manufacturer’s papers grew more than 1 percent and were the only winner in the Dax.

A new record high at Hellofresh with 33.32 euros caused bright spots in the cloudy market environment. In the corona crisis, the kockbox manufacturer particularly benefits from the trend to cook more at home. Recently, the paper became more expensive by more than five percent.

The euro fell somewhat. In the afternoon, the common currency was $ 1.0838. The European Central Bank (ECB) set the euro reference rate at $ 1.0860 on Monday.

In the German bond market, the Rex index fell 0.19 percent to 144.69 points. In return, the current yield rose from minus 0.48 percent the previous day to minus 0.45 percent. The Bund Future advanced by 0.34 percent to 173.10 points.


Investment experts were too euphoric

Frankfurt At the end of the week, many investors have regained their courage after there have been some hopeful reports in the fight against the corona virus.

Even if a drug to treat Covid-19 was found quickly, the way back to normality would be a long and rocky one, said portfolio manager Thomas Altmann from the investment advisor QC Partners. “The consequences of the economic lockdown at company level and the rise in the unemployment rate cannot simply be reversed.”

Timo Emden from the analytical company of the same name said something similar. “Investors are longing for the big hit in the corona pandemic,” he said. For the market, however, it is still clear that even an active ingredient is not a panacea for the affected global economy.

The German Leading index Dax climbed to 10,756 points on Friday. By the close of trading, however, he surrendered part of the profits and closed with a gain of almost 3.4 percent at 10,642 points. The development of the EuroStoxx 50 is similar: the European stock market index went out of trading with an increase of 2.7 percent at 2,888 points. In the US, investors were also initially in good spirits on Friday. The Dow Jones ended the year up 2.9 percent at 24,216 points.

Badly hit global economy

Jochen Stanzl, chief market analyst of the broker CMC Markets, compared the current increases in the stock market indices with the situation before the big sell-off in December and January. “Even now soaring technology stocks are driving like Netflix, Amazon and Tesla attention away from the fact that the real economy is in ruins, ”he said. “In the end, these companies will do good business, but they won’t save the global economy.”

Despite all the euphoria, the companies are “facing a major adjustment process, accelerated by the additional costs and burdens from the lockdown,” says Stanzl. At the moment, no one could say what the size of company closures would be in the end and how long it would keep stock exchanges from reaching the old highs.

In view of the relaxation of the contact restrictions, Jörg Krämer, chief economist at Commerzbankthat the economy will pick up strongly in the short term. “In the long term, however, there are considerable dangers – for example, due to the sharply increasing corporate debts caused by the crisis,” he said. A V-shaped upturn, i.e. a very rapid pickup in the economy, is unlikely. Rather, a gradual return to growth can be expected.

Jörg Krämer

The chief economist at Commerzbank expects the economy to pick up strongly in the short term.

In the coming week, the developments around the corona virus and current figures on the economic situation will continue to be the dominant topics on the markets. For example, stock marketers are eagerly awaiting the EU’s virus crisis summit next Thursday. Among other things, there will be a possible inclusion of jointly guaranteed debts to overcome the pandemic consequences.

In addition, shareholders will increasingly look at the quarterly figures of individual companies in the coming week. After companies in other countries have already submitted figures for the first quarter, the balance sheet season is now also beginning in Germany. The kick-off is as usual SAP.

In the current balance sheet season, a total slump in profits of 40 percent can be expected, said Ulrich Stephan, chief investment strategist for private and corporate customers at German bank. Nevertheless, he is optimistic: thanks to the multi-billion dollar aid packages from central banks and governments, investors are looking beyond current developments and are concentrating on profits in the second half of the year and 2021.

Entry into the stock market

Given the current price gains, some investors are wondering whether they have already missed the best opportunity to enter stocks. According to the DZ Bank analysts, the volatility will remain high for the time being due to the continuing uncertainties caused by the corona virus and further price setbacks cannot be ruled out. “From previous stock market cycles, we know that after a recession has bottomed out, the stock market has the highest and most sustained growth rates,” said DZ-Bank. “It will take some time before this low is reached. Our economists see this so far in the second quarter of 2020. “

Looking ahead to the coming years, the DZ Bank analysts expect: “By 2022/23, the Dax companies could earn as much again as in the previous record year 2018, and the Dax could reach its highest level again in 13,800 points in 2024.” Who in the continue to buy shares in the coming quarters, should achieve very good long-term investment results. However, it is important to only have shares in companies in the portfolio whose prospects are viewed positively over a three or five year period.

Altmaier wants to gradually ramp up the economy

This is how it will continue in the coming week:

Monday: At the beginning of the week, quarterly figures of Philips, Vivendi, and IBM expected. In Japan, figures on foreign trade are published in March, in Germany data on producer prices in March. The Bundesbank also publishes its monthly report.

Tuesday: The balance sheet season starts and SAP starts as usual. However, the software company had already published preliminary results in early April and lowered the full-year targets. In addition, Netflix, London Stock Exchange (LSE) and Coke Numbers before. The ZEW index provides information on the mood of German stock exchange professionals. UK unemployment figures come from London.

Wednesday: Preliminary data on consumer confidence in the euro zone are expected from Brussels. Lay at the company Alcoa, Ericsson, Caterpillar, Heineken and Roche first quarter figures.

Thursday: The publication of the GfK index will give an indication of the Germans’ buying mood. Alexander Roose, chief equity investor at asset manager Degroof Petercam, expects consumer confidence to “be severely impacted by the severe recession in the services sector due to rising health care costs and lower purchasing power”. In addition, the preliminary Markit purchasing manager index for the euro zone (industry, service, composite) is published. In the United States, the number of initial jobless claims for the week ending April 18 is published. Among other things, they provide insights into their books Credit Suisse, Volvo, Renault, Unilever and Intel.

Friday: At the end of the week, the Ifo index is on the schedule. It provides information about the mood on the German executive floors. Experts expect another slide to 77.2 points from 86.1 points in the previous month. In the United States, data on orders for durable US goods are also published. Experts expect a drop of 11.4 percent. Quarterly figures come from Sanofi, American Express and Nestle.

More: Yield in Corona times: With which investments you can still earn money


Who pays how much and who benefits how

Standstill also in Rome
Picture: EPA

Calculations show how much money would be redistributed with corona bonds – and why French people might pay more. Italy could not benefit as much as many politicians believe. Nevertheless, great incentives remained for Rome.

WLittle has yet been researched into what concrete Eurobonds – or whatever common European sovereign debt might be called – and what financial consequences they would have for individual countries. Politicians in Italy, France and other countries are demanding large amounts of community debt almost every day.

Tobias Piller

Tobias Piller

Business correspondent for Italy and Greece based in Rome.

But the details remain vague. So everyone can hide numerous different ideas behind the term Eurobonds. At the Mannheim Economic Research Institute ZEW, Friedrich Heinemann has now carried out a study to investigate what the details, beneficiaries and payers of such Eurobonds could look like.

On the one hand, he examined the extent to which financial redistribution took place through Eurobonds. On the other hand, it was examined whether the issuance of joint debts could lead to significant savings in interest costs, as is claimed by Italian politicians. The results that the F.A.Z. show, among other things, that not all countries that are currently calling for Eurobonds would always benefit.


Euro gives way a little

Foreign exchange market

The euro moves little.

(Photo: AFP)

Frankfurt The euro moved little on Tuesday. The common currency was trading at $ 1.1169 in the morning, slightly lower than the previous day. The European Central Bank (ECB) last set the reference rate at $ 1.1157 on Monday afternoon.

In the morning, the flight to safe investment ports on the foreign exchange market did not continue for the time being. The Japanese yen, which is generally in high demand during uncertain market times, was under pressure against all other major currencies. The Swiss franc also fell against the dollar.

Market observers referred to developments on the Asian stock markets, which showed stabilization in the morning. In the further course of trade, economic data should move more into the foreground. The economic expectations of the Center for European Economic Research (ZEW) for Germany are on the program in the morning. A massive slump in the economic indicator is expected on the market.

More: Asia’s equity markets fluctuate between gains and losses.