Dax and Euro Stoxx: The appointments of the day

Even if it could go up two days in a row: Market experts do not currently expect permanent trends on the global stock exchanges. “Apparently the market needs new directions,” said JJ Kinahan, chief investment strategist at TD Ameritrade brokerage firm. For example, the increasing number of infections in the USA is not a reason for a larger sell-out. “Without new impulses that make investors optimistic, things will not go up significantly either.”

Otherwise the trading impulses at the end of the week are manageable, the guidelines from the USA are benevolent, in Asia the stock exchanges started the trading day with a small plus. During the day, some smaller company numbers and economic data are waiting. Among other things, the University of Michigan publishes its consumer confidence index for June in the afternoon – it should clearly reflect the increased private consumption in the USA.

The aftermath of the historic balance sheet scandal surrounding the insolvent payment service provider Wirecard should once again cause movement in the markets. However, the group in the Dax is now only weighted at 0.12 percent. A reaction to the now official state bailout of Lufthansa can also be expected, of course one exchange lower in the MDax.

1 – Requirements from the USA

After the recent price slide, investors took the opportunity to re-enter the US stock market. The standard value index Dow Jones rose on Thursday after initial losses by 1.1 percent to 25,745 points. The technology-heavy Nasdaq and broad-based S&P 500 each gained around one percent after all three lost more than two percent on Wednesday.

Financials in particular rose. The background to this is the easing of regulations that make life easier for large banks with large trading and investment portfolios. The S&P Financial Index rose 2.7 percent.

2 – Trade in Asia

At the end of the week, the Tokyo stock exchange was initially stronger. The Nikkei index, comprising 225 values, was one percent higher on Friday at 22,475 points. The broader Topix index rose 0.8 percent to 1574 points. By contrast, the MSCI index for Asian stocks outside of Japan fell by one percent.

In the individual values, Softbank was the focus with an increase of initially 3.5 percent. The technology investor has announced share buybacks.

3 – Further development after the Wirecard insolvency application

A Dax company goes bankrupt – the actually unimaginable happened at Wirecard on Thursday. As a result, the financial service provider’s share price fell 70 percent. The further handling of the scandal, including the stricter regulation announced by Finance Minister Olaf Scholz (SPD), is likely to occupy the markets for some time to come.

“The Wirecard AG case is a scandal that is unparalleled in the financial world,” said Scholz on Thursday evening in Berlin. “We also have to rethink our supervisory structures.” What has happened in the company must now be clarified “quickly and thoroughly”, said Scholz. “A scandal like Wirecard must be a wake-up call that we need more supervision and control over the financial markets than we have today.”

4 – Lufthansa shareholders vote for state entry

Already the announcement by major shareholder Thiele on Wednesday evening to approve the state bailout package at the airline had caused the company’s share price to rise sharply. On Thursday after the market closed, Lufthansa’s shareholders also formally approved the plan – and here, too, the MDax paper reacted with a significant increase in late trading. At the end of the week, the reactions should also be reflected in the Frankfurt stock exchange trading. The main question now is: how hard must savings be made and what does the view look like?

5 – Deutsche Bank copes with US stress test

Deutsche Bank passed the Fed’s annual stress test for the second time in a row. The agency has certified that the US subsidiary of Germany’s largest money house has made progress, according to the document published on Thursday after the US market closed. The Fed also raised its thumb for all other subsidiaries of foreign banks such as Credit Suisse and UBS.

Against the background of the corona virus crisis, however, it gave all major banks in the USA far-reaching guidelines for strengthening their capital base. The supervisors also announced further investigations. For Deutsche Bank, especially US chief Christiana Riley, passing the test again is a success. In 2019, the bank received the green light for the first time in years during the stress test.

6 – Evaluation of measures against the too-big-to-fail problem

During the financial crisis, numerous credit institutions were saved with public funds – also out of concern that these banks were too big to fail. To prevent this from happening again, regulators and supervisors have tightened a number of rules in recent years.

The Financial Stability Board (FSB) now questioned how effective the measures to reduce the too-big-to-fail problem were. Bundesbank Vice President Buch presented the results of the FSB evaluation as chair of the working group. Actually a niche topic, but it should also be exciting for the markets, as active and potential rescue packages and participations in the German financial sector are now viewed – possibly with current digression.

Company dates on June 26, 2020

  • 7:00 a.m., Germany: Hornbach, Q1 numbers
  • 8:00 am, UK: Tesco, Q1 Trading Statement
  • 8:00 a.m., Germany: Vapiano, Annual Report 2019
  • 8:00 a.m., Germany: Hennes & Mauritz, Q2 figures (detailed)
  • 10:00 a.m., Germany: Sartorius, Annual General Meeting (online)
  • 10:00 a.m., Germany: Software, Annual General Meeting (online)
  • 10:00 a.m., Germany: Siltronic, Annual General Meeting (online)
  • 10:00 a.m., Germany: RWE, Annual General Meeting (online)
  • 12:00 p.m., Germany: RIB Software, Annual General Meeting (online)
  • 1:00 p.m., Germany: PVA TePla, Annual General Meeting (online)
  • 4:30 p.m., Germany: Financial Stability Council to evaluate the so-called too-big-to-fail reforms

Dates for the economy on June 26, 2020

  • 8:00 a.m., Germany: Foreign trade prices 05/20
  • 8:00 a.m., Germany: Destatis: Development of sales in the commercial economy 05/20 (early experimental indicator)
  • 8:45 a.m., France: consumer confidence 06/20
  • 9:00 a.m., Spain: retail sales 05/20
  • 10:00 a.m., euro zone: money supply M3 05/20
  • 11:00 a.m., Italy: consumer confidence 06/20
  • 2:30 p.m., USA: Private income and expenditure 05/20
  • 2:30 p.m., USA: Real income 05/20
  • 4:00 p.m., USA: Uni Michigan Consumer Confidence 06/20 (final)

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.

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