Dusseldorf Is the worst past the German stock market? The development on Friday could at least suggest that because the leading German index Dax is listed gain 3.6 percent in the afternoon at a As of 8916 points. In the meantime, the Frankfurt Stock Exchange Barometer even exceeded the 9200 point mark. With the papers from Allianz, Fresenius and Heidelberg Cement, three papers with a double-digit percentage are in the plus.
On the previous trading day, the Dax closed two percent in plus and went out of business with a score of 8610 points. (Read here: Five reasons why the time of massive price losses should be over)
In any case, there is still hope: the ECB’s announcement of a gigantic $ 750 billion purchase program was the first step for a central bank that did not lead to price losses.
The two US rate cuts in the US and the planned helicopter money in the form of checks across the Atlantic did the opposite and caused the stock markets to crash.
Despite the current recovery Corona virus pandemic news will continue to drive stock market developments. Investors should pay attention to two pointsthat should decide whether the ongoing recovery on the stock markets is sustainable.
First, will pharmaceutical and biotech companies like Sanofi or Gilead Sciences make progress in developing a vaccine or anti-spreading drug?
And how long does the lockdown last, the freezing of social life? For comparison: During the economic and financial crisis in 2008 and 2009, which is always compared with the current stock market developments, business management shrank by five percent.
If this lockdown lasts longer, this five percent will be significantly exceeded. As long as there are no signs of when it could end, it will be difficult for a noteworthy recovery that could push the Dax well above 10,000 points.
Look at other asset classes
After the recent rally in the world’s leading currency, the dollar, some investors are cashing in. The dollar index, which reflects the price of major currencies, fell 0.8 percent on Friday to 102 points. However, with a plus of more than three percent in total, he continued to head for the biggest weekly profit since the turbulence after the bankruptcy of the US investment bank Lehman Brothers in autumn 2008.
“People want cash because they don’t know where the next revenue is coming from and what they are going to pay,” said financial market expert Stuart Oakley of investment bank Nomura. “I don’t think that will change.” Over the past ten days, many investors’ flight to the “safe haven” dollar has led to a plus of around eight percent in the US currency and has raised the price of the index up to 102.992 points, the highest level in more than three years. The last time things went up so clearly in autumn 1992.
Despite the corona crisis and drastically falling oil prices, the Russian central bank has not changed its key interest rate. The key interest rate remains at 6.0 percent, the central bank said on Friday in Moscow. Russia is thus opposing the international trend. Almost all major central banks had massively relaxed their monetary policy in the face of the corona crisis.
In Russia, however, the ruble has fallen 20 percent against the dollar since the beginning of the year due to the massive drop in oil prices. A rate cut would increase the pressure on the ruble.
The initial rally in the crude oil market collapsed after Russia had banned US interference from the price war with Saudi Arabia. The Brent variety from the North Sea fell 2.9 percent to $ 27.67 a barrel. The US oil WTI even dropped 5.9 percent to $ 23.73.
According to the “Wall Street Journal”, US President Donald Trump wants to exert diplomatic pressure on Saudi Arabia to close the oil tap again. He wants to get Russia to do so with threats of sanctions. The United States is interested in a higher oil price because, according to experts, the shale oil producers located there are only profitable from a price of $ 45 to $ 50 due to the complex fracking process.
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“Russia and Saudi Arabia have no interest in securing the survival of the US shale oil industry – on the contrary,” said analyst Jeffrey Halley of brokerage Oanda. As soon as this knowledge becomes established, the current price gains would vanish. He was right about his forecast.
The European Central Bank’s massive purchase program means that investors can access bonds. In return, yields are falling. German paper yields 0.1 percentage points lower at minus 0.270 percent, and interest rates in Italy even drop by 0.3 percentage points to 1.521 percent.
The gold price is about to lose for the second week in a row – although today it rises 1.3 percent to $ 1,490. Last week it was 8.6 percent, now it should be 1.5 percent. A weekly close below $ 1,500 would mean that gold has given up all of its profits since the beginning of the year. As of March 6, the price was $ 1,700.
“Still is In our view, gold is a safe haven and a crisis currencyif you look at the heavy losses in the other financial markets, ”said Commerzbank commodity analysts.
Look at the individual values
Hornbach: Because of the coronavirus epidemic, the hardware store chain is facing “great uncertainty” for the current fiscal year 2020/21. However, concrete statements are currently not possible. The share loses 4.8 percent in the positive market environment.
Hapag-Lloyd: Germany’s largest shipping company is preparing for a decline in global container shipments due to the corona pandemic. The capacities will probably have to be adjusted in the coming months. This will affect earnings at least in the first half of the year. The share responds to these announcements with an increase of 4.2 percent.
Osram: Osram is one of the biggest winners on the German stock market with a price increase of 25.5 percent. Despite the rapid fall in the price of its shares, the Austrian sensor specialist AMS is sticking to the planned capital increase of EUR 1.65 billion to finance the takeover of the German lighting group. The AMS titles listed in Zurich gained 0.3 percent.
Port of Hamburg: The company expects sales and profits to decline due to the effects of the corona pandemic. According to the port group, it assumes, however, that it has sufficient liquidity to be able to meet payment obligations at any time. Investors are pleased with the statement that the stock is up 8.6 percent.
Vapiano: The restaurant chain is insolvent, which is why the share slipped by more than 70 percent to 32 cents. In the meantime, the loss has decreased to 52 percent and 57 cents.
What the chart technique says
A look at the 30 individual stocks shows how much the German stock market oversold, i.e. fell too quickly. Since the beginning of the year, all DAX stocks have been in the red with a double-digit percentage. Around half of all German “blue chips” even have discounts of more than 35 percent.
The market is currently so “oversold” that we cannot imagine an immediate break in support between 8355 points and 8014 points, say the technical analysts at the Düsseldorf-based bank HSBC. At prices above 8699 points, this mark has currently been exceeded, the high in this trading week at 9146 points would be the next recovery target, according to the HSBC.
Here is the page with the Dax course, here are the current tops & flops in the Dax. Current short sales by investors can be found in our short sales database.