Dusseldorf Surprisingly positive economic data helped the Dax to its highest closing price in two weeks on Tuesday. The values were not as bad as feared. The leading German index then closed 2.1 percent up and went out of Frankfurt stock exchange trading with 12,524 points. On this Wednesday, the Dax was trading 0.4 percent in negative territory at 12,499 points.
It is therefore questionable whether the leading index will start another attempt at midweek to defend the 12,600-point mark that has already been reached by the close of trading. The focus is again on economic indicators.
On the one hand, the Ifo Institute publishes the current business climate index, which reflects the economic outlook of companies. The Federal Ministry of Economics, Economists and IG-Metall speak about the situation of Germany as an industrial location. The International Monetary Fund (IMF) also publishes its economic forecast.
But also the further corona events, possibly with implications for nationwide measures in the event of an infection event like in the district of Gütersloh, could have an impact on the stock market events.
1 – Requirements from the USA
US investors have been relieved to see President Donald Trump’s commitment to the trade agreement with China. They are also once again betting on a vigorous economic recovery from the consequences of the coronavirus pandemic. The Dow Jones went 0.5 percent higher at 26,156 points on Tuesday. The technology-heavy Nasdaq advanced 0.7 percent to 10,131 points. The broad S&P 500 gained 0.4 percent to 3131 points.
While the economy was starting up again, many investors were sitting on large cash holdings and had missed the previous rally, said Thomas Hayes, manager at the asset manager Great Hill Capital. “This money will be forced to re-enter the market. So we still have some room for improvement. ”
2 – Trade in Asia
Asian equity markets partially worked their way up to a four-month high on Wednesday. Despite a record rise in the number of coronavirus cases, investors stubbornly clung to the prospects of a successful start-up of the economy.
The Tokyo stock exchange moved little on Wednesday. The Nikkei index, which comprises 225 values, stood at around 22,541 points on the previous day’s value. The broader Topix index fell by 0.2 percent and stood at 1583 points. The Shanghai stock exchange was up 0.2 percent. The index of the most important companies in Shanghai and Shenzhen lost 0.2 percent. The MSCI index for Asian stocks outside of Japan rose 1.4 percent.
3 – Ifo Institute and IMF present economic data
After the Council of Experts in Germany encouraged the economy to recover quickly on Tuesday, two more bodies are now presenting their assessment of the economic situation: The Ifo Institute publishes its business climate index, for which it asks companies about their expectations. The index should indicate changes in the economy as early as possible.
Any indication of the economic trend over the next few months is currently welcome, as the forecasts are far apart. A longer period of weakness in the economy seems possible, but also a quick recovery and compensation for the losses from the first two quarters.
The International Monetary Fund, in turn, publishes its global economic outlook. This is intended to provide information about whether the economic stimulus programs worldwide are suitable for pushing the economy again. This has a direct impact on export-oriented German companies.
4 – Location conference of the Ministry of Economy
Where does Germany stand in international comparison with regard to its industry-relevant economic framework? This is the key question of an analysis that will be presented at the Federal Ministry of Economics’ (BMWi) location conference 2020. The BMWi will also present the first measures from the 2030 industrial strategy that are being implemented or have already been implemented. Minister of Economics Peter Altmaier discusses this with representatives of business associations, unions and politics.
5 – Health ministers advise on corona outbreaks
The Corona outbreak at the meat processor Tönnies and the drastic restrictions for the population in the region concern the federal health ministers on Wednesday. The departmental colleagues want to discuss in a telephone conference (9:00 a.m.) about a common approach after the massive new infections in the district of Gütersloh.
The goal is a nationwide approach. It is already becoming apparent that the outbreak in North Rhine-Westphalia is likely to have an impact on many people’s vacation planning. News that means further future lockdowns and economic restrictions are well received in the markets.
6 – Cabinet adopts EU Council Presidency program
The cabinet plans to adopt the German program for the six-month EU presidency beginning on July 1 on Wednesday (9:30 a.m.). The focus is on overcoming the corona pandemic and economic recovery in Europe. The EU development programs are also intended to further develop Europe and stabilize it economically and socially. It will be interesting to see whether further information about an upcoming EU summit and approximations in the dispute over the 750 billion euro program can be reported.
7 – Sixt SE invites you to its first virtual general meeting
The corona crisis hit Germany’s largest car rental company hard. Sixt needs help from the state. The company therefore obtained a credit line of up to 1.5 billion euros from the state development bank KfW and four commercial banks in May. 70 percent – that is 1.04 billion euros – come from KfW. Today majority shareholder Erich Sixt wants to explain how things are going for the car rental company.
8 – 5G auction put to the test
The Federal Administrative Court in Leipzig is hearing on Wednesday (starting at 1:00 p.m.) about a lawsuit against the auction of 5G mobile radio frequencies. The Telefónica Deutschland company opposed the procedure, which brought the federal government revenue of 6.5 billion euros last year.
The Federal Network Agency had auctioned off the frequencies. From Telefónica’s point of view, this was illegal, among other things because frequencies had been included for which the provider still held rights of use until 2025.
Telefónica’s action before the Cologne Administrative Court was unsuccessful. Now the Federal Administrative Court has to decide on the appeal against this judgment. The decision is likely to be made on Wednesday. (Ref .: BVerwG 6 C 3.19)
Company dates on June 24, 2020
- 10:00 a.m., Germany: Sixt, Annual General Meeting (online)
- 10:00 a.m., Germany: Gerresheimer, Annual General Meeting (online)
- 10:00 a.m., Germany: Bilfinger, Annual General Meeting (online)
- 10:00 a.m., Germany: Württembergische Lebensversicherung, Annual General Meeting (online)
- 10:00 a.m., Germany: Rational, Annual General Meeting (online)
- 10:00 a.m., Germany: GFT Technologies, Annual General Meeting (online)
- 11:00 a.m., Germany: windeln.de, Annual General Meeting (online)
- 11:00 a.m., Luxembourg: Grand City Properties, Annual General Meeting (online)
- 12:00 p.m., Germany: Amprion Online-Pk on the future of the offshore network
- 1:00 p.m., Germany: The Federal Administrative Court is hearing a lawsuit against the auction of 5G licenses. Telefónica Deutschland had sued.
- 1:30 p.m., Luxembourg: Aroundtown, Annual General Meeting (online)
- 10:05 p.m., USA: Blackberry, Q1 numbers
Dates for the economy on June 24, 2020
- 6:30 a.m., The Netherlands: GDP Q1 / 20 (final)
- 8:00 a.m., Eurozone: Acea, commercial vehicle registrations 05/20
- 8:45 a.m., France: Business climate 06/20
- 8:45 a.m., France: producer confidence 06/20
- 9:00 a.m., Germany: Video link with ECB chief economist Philip Lane on the monetary policy of the European Central Bank (ECB)
- 10:00 a.m., Germany: Ifo business climate 06/20
- 11:30 a.m., Germany: bond / maturity: 15 years / volume: 2.5 billion euros
- 12:00 noon, Germany: The “way of doing business” Volker Wieland explains the latest economic forecast of the Council of Experts – via video
- 3:00 p.m., Germany: Pk for location conference 2020 on the situation of industry in Germany with Peter Altmaier, Dieter Kempf, Gabriel Felbermayr and Jörg Hofmann
- 3:00 p.m., Belgium: Business climate 06/20
- 3:00 p.m., USA: FHFA index 04/20
- 3:00 p.m., USA: IMF presents forecast for the development of the global economy
- 4:30 p.m., USA: EIA Energie
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