Dusseldorf A little bit of the push of the brilliant day rally from the previous day the Dax saved on Wednesday – but not everything. The leading German index had risen by 4.5 percent in the morning and finally climbed in the late morning the daily high of 10,137 points.
But then the stock market barometer slipped in a short time by more than 650 points – a crash like in the biggest crash times in the middle of the month. The daily low is 9460 points. Shortly before close of trading, however, the leading index made a clear plus and closed with a gain of 1.8 percent at 9874 points.
The reason that the DAX slipped during the course of the day: The mood on the executive floors of the German economy has deteriorated further in recent days due to the virus crisis. The definitive business climate index of the Munich Ifo Institute for March fell to 86.1 points from 96.0 points in February, the lowest level since July 2009.
“It can be assumed that there will be a severe recession for at least two quarters,” said Ifo expert Klaus Wohlrabe. The gross domestic product could collapse between five and 20 percent, depending on the length of the shutdown.
They are very problematic poor export expectations of the industry: “Even if the demand is there: logistically, the industry often doesn’t get goods to the countries they are supposed to go to,” said the Ifo expert. “The industry is struggling with a logistics problem.”
Probably the most important reason why the German stock exchanges climbed upwards on Wednesday at the start of trading came from the USA: According to its own statements, the US government had dealt with the senators at night Aid package to cushion the economic consequences agreed the coronavirus pandemic, which will receive final approval in the House of Representatives on Wednesday. Size: two trillion dollars.
This gave the US stock exchanges first and subsequently the leading German index: The Dow Jones opened 300 points in the afternoon in German time on New York’s Wall Street. After slight losses, it is currently continuing its upward trend.
Look at other asset classes
The oil price also fell after an initially significant recovery. WTI fell 1.54 percent to $ 23.63 a barrel, but the price returned to the previous day’s level in the early evening.
The situation was similar for the North Sea variety Brent, which had, however, posted a loss of 1.1 percent in the evening, $ 26.86 a barrel. According to experts, the specter of falling demand worldwide and a rapidly spreading oil spill also make a sustainable recovery in prices unlikely.
With large parts of the global economy shut down to stop the spread of the corona virus, both Saudi Arabia and Russia continue to produce more oil to gain market share. The large trading company Gunvor Group estimates the global crude oil surplus at 14 to 15 million barrels per day.
After two trading days with clear profits the gold price takes a breather in early trading. A troy ounce costs around $ 1,615, about the same as the previous day.
A weakness in the dollar due to the agreement on the US government stimulus package in the fight against the corona crisis supports the euro. The common currency is trading at $ 1.0822 after falling below $ 1.08 last night.
The dollar index, which measures the ratio of the currency to other major currencies, also fell 0.6 percent to 101.44 points. But stock marketers remained skeptical whether the run to the world’s leading currency would abate due to the flood of money to cushion the economic consequences of the coronavirus pandemic.
Look at the individual values
Eon: Despite the corona crisis, the energy group can push ahead with the integration of the business acquired from competitor Innogy with higher profits. The shareholders should receive a dividend of 46 cents per share after 43 cents previously.
CEO Johannes Teyssen is aiming for an operating profit of 3.9 to 4.1 billion euros in the current year. From 2020 to 2022, operating profit is expected to increase by seven to nine percent annually. Investors are happy, the stock is up seven percent and is one of the biggest Dax winners.
Thyssen-Krupp: One reason why the share was the biggest MDax winner on yesterday’s trading day with a plus of 26 percent is clear today. The industrial group plans to restructure its steel business by cutting 3,000 jobs. Operational layoffs are to be avoided.
The group also agreed with IG Metall on a collective agreement that would run until the end of March 2026 and an immediate package for the corona crisis, which included, among other things, increasing the short-time work allowance to 80 percent.
Today, Wednesday, the paper rose by a further 21.8 percent – which at times meant an increase of 47.8 percent in just two trading days. An amazing value for an industrial share. In the evening, the increase from Wednesday is only 3.6 percent.
Jenoptik: The technology group posted an increase in operating profit (Ebitda) of five percent to 134.0 million in 2019, with sales up 2.5 percent to EUR 855.2 million. Due to the still unclear effects of the corona crisis on the Group’s business, the Executive Board made the planned dividend of EUR 0.35 per share, as did the forecast for 2020. The share lost 3.5 percent.
Port of Hamburg and logistics: Due to the Corona crisis 2020, the Port of Hamburg expects a sharp drop in sales and earnings. In order to conserve liquidity in the crisis, the dividend is to decrease by 12.5 percent to EUR 0.70 per A share, which will increase by 4.5 percent.
Sixt: The shares are in high demand after the presentation of the annual report. In the evening they were up 26 percent. The provider of car rental, car sharing and driving services sees itself well equipped to withstand the corona crisis.
Zooplus: Despite the coronavirus pandemic, the online pet food retailer is aiming for sales growth at the previous year’s level in the current year. Less stress is expected for online trading than in traditional sales. Due to the effects of the corona crisis on logistics, Zooplus expects a lower result for 2020, but still wants to break even.
The stock is extremely volatile, the price has almost doubled within a few days. Today’s Wednesday is down 17.4 percent.
What the chart technique says
The technical picture has brightened. The Dax has now clearly moved away from the important support zone between 8255 points – the lowest point of the crash since mid-February 2020 – and around 8000 points.
“Normal” stock market conditions will only be possible again if the Dax can break the 10,279 point mark. This number comes from December 2018 and was the starting signal for the rally, which lifted the leading German index to new record highs.
Another resistance that the stock market barometer would then have to overcome is the 200-day line, which signals the long-term trend. This line is currently trading at 12,476 points, but with a downward trend.
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.