Düsseldorf Investors long for positive news, after all, they have become rare. At the start of the new stock market week, it is expected that the leading German index Dax will yield further towards the 12,000 mark. On off-exchange platforms, the Frankfurt stock exchange barometer was down more than 0.5 percent on Monday morning after closing the previous week with a minus of 1.6 percent.
The German stock market is currently moving between the fear of a second wave of new corona infections and economic signals of hope. After the three-month recovery rally, further profit-taking could not be ruled out in the short term, say the experts at Landesbank Baden-Württemberg (LBBW).
Chris-Oliver Schickentanz, chief investment strategist at Commerzbank, emphasized that the nervousness of investors has increased again because of concerns about a possible second wave of corona infections. This particularly affects the USA, where easing measures may have been announced too early. In Europe, on the other hand, only serious individual cases of a greater spread, which could be limited with measures, have so far been recorded.
The current inflation data released by the Federal Statistical Office on Monday could further cement skepticism about a rapid economic recovery. Due to the persistently low energy prices and the slowly recovering economy, an increase in the inflation rate is not yet expected.
Investors should again pay special attention to the insolvent payment service provider Wirecard: the coming days could be fateful days for the former Dax high-flyer.
1 – Requirements from the USA
The US stock markets eased at the end of last week, burdened by price losses in financial stocks. Investors were also nervous about the renewed tensions with China. The standard value index Dow Jones closed 2.8 percent lower at 25,015 points. The technology-heavy Nasdaq dropped 2.6 percent to 9757 points. The broad S&P 500 lost 2.4 percent to 3009 points.
2 – Trade in Asia
The Tokyo stock exchange was initially weaker at the start of the week. Experts pointed to the increase in coronavirus cases, particularly in the United States. The 225-value Nikkei index was down 1.3 percent on Monday at 22,216 points. The broader Topix index also fell by 1.3 percent and stood at 1557 points. The Shanghai stock exchange was down 0.5 percent. The index of the most important companies in Shanghai and Shenzhen lost 0.6 percent. The MSCI index for Asian equities outside of Japan initially hardly moved.
3 – Brexit trade agreement
In Brussels, the EU is negotiating a trade agreement after the Brexit with Great Britain. For the first time in months with pandemic requirements, the negotiators meet again physically in Brussels. Today marks the start of another week-long round of negotiations on a trade agreement after Brexit.
Little progress has been made in the first four rounds of negotiations since the UK left the EU at the end of January. Prime Minister Boris Johnson could request an extension of the transition period until Tuesday, which he has repeatedly refused. This is why there is still a hard break with economically serious consequences for both sides.
4 – Inflation rate in June
The Federal Statistical Office published the preliminary estimate for the inflation rate in June on Monday (2 p.m.). In May, the inflation rate was 0.6 percent compared to the same month in the previous year, falling to its weakest level in one and a half years.
Low energy prices were recently seen as the main reason for weak inflation. The oil price has since risen again, but at 40 euros per barrel of the Brent variety it is still significantly below the previous year’s value, when it was still above 60 dollars.
For this period comparison, the pressure on the inflation rate remains. It is already questionable whether this will move upwards given the already weak economy in the corona crisis.
5 – Consumer confidence in the euro area
In the morning (11 a.m.), the EU Commission publishes the final consumer confidence in the euro zone for June. Like other sentiment indicators, the indicator should signal a recovery in economic activity at a low level.
6 – Major shareholder Thiele wants more influence at Lufthansa
Heinz Hermann Thiele calls for deep cuts at Lufthansa. Subsidiaries of subsidiaries, such as Lufthansa Technik or the catering business, would also have to be put to the test. “But I am very confident that Lufthansa will once again be the strongest airline in Europe after the crisis,” the major shareholder told Handelsblatt. “As a brand, it has a radiance almost like Mercedes worldwide.”
With his share of 15 percent, he feels “currently well”, he does not rule out a later increase. However, the investment is a high risk for him and he cannot expect dividends for his shares in the coming years. He wants to influence this: “I will certainly try to strengthen my position in the company, including on the Supervisory Board.” He leaves it open whether he himself joins the control committee.
7 – Wirecard’s internal reconnaissance
Dealing with the biggest Dax scandal is entering its decisive phase. James H. Freis, Jr., the interim chief, will have to turn the third-party business upside down. This will also be demanded by EY’s balance sheet inspectors. The company itself has hit the negative headlines due to the balance sheet scandal.
It is also eagerly awaited what political consequences the Wirecard insolvency will have. From now on, the Bafin should investigate possible falsifications of the balance sheet itself – no longer the German Accounting Office (DPR).
Company dates on June 29
- 10:00 DEU: Online Pk with Bitkom President Achim Berg on the economy
- 11:00 DEU: Online annual press conference of the Federal Association of the German Food Industry and the Employers’ Association for Food and Enjoyment
- USA: Micron Technology, Q3 numbers
Dates of economic activity on June 29
- 01:50 JPN: Retail trading set 05/20
- 09:00 DEU: Saxony consumer prices 06/2009:
- 09:00 ESP: consumer prices 06/20 (provisional)
- 10:00 DEU: consumer prices Brandenburg, Hessen, Bayern 06/20
- 10:30 DEU: Consumer prices North Rhine-Westphalia 06/20
- 11:00 EUR: consumer confidence 06/20 (final)
- 14:00 DEU: consumer prices 06/20 (provisional)
- 4:00 p.m. USA: Pending home sales 05/20
- 4:30 p.m. USA: Dallas Fed Manufacturing 06/20
- 16:30 DEU: Economic research institutes: “Who pays the costs of the corona crisis?”. Webinar with Ifo President Clemens Fuest, Jan-Egbert Sturm (Director KOF Business Research Center at ETH Zurich) and Margit Schratzenstaller (Senior Economist, Austrian Institute for Economic Research WIFO, Vienna)
Other dates on June 29
- 10:00 DEU: Opening of the Airport Corona Test Center (FCT) at Frankfurt Airport
- 11:00 DEU: German Economic Forum (online) with, among others, Federal Labor Minister Hubertus Heil, Federal Development Minister Gerd Müller and Prime Minister of Baden-Württemberg Winfried Kretschmann
- DEU: Chancellor Angela Merkel meets with French President Emmanuel Macron
- DEU: Special meetings of the Bundestag and Bundesrat for further help in the corona crisis
- Bundestag finally advises on the second Corona Tax Assistance Act (reduction of VAT)
- Federal Council advises on second Corona Tax Assistance Act and supplementary budget
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