Dusseldorf Economic data, which turned out better than expected, gave the German stock market a tailwind on Tuesday. Of the German leading index Dax closed 2.1 percent in plus at 12,524 points. That was the highest closing price in two weeks.
According to preliminary data, the purchasing managers’ index of industrial companies rose to 44.6 from 36.6 points in June. Managers in service companies are again much more optimistic than in May, the index rose to 45.8 from 32.6 points. In both cases, the consensus estimates were exceeded: they were 41.5 and 42.0 points, respectively.
“The easing of corona restrictions and the increase in economic activity have Corporate mood brightened significantly “, Ulrich Wortberg from Helaba commented on the result of the survey among company managers conducted by the IHS Markit Institute.
Wortberg also pointed out that French managers are again much more positive. “This gives hope for an economic recovery in the third quarter.” Although the indices in Germany were still in the contraction area, the indications for the Ifo business climate index due on Wednesday are positive.
Markit economist Phil Smith was somewhat more cautious. He expects a long recovery. “Demand is likely to continue to be impacted by the disruptions and uncertainties caused by the corona crisis.”
Most German investors are relatively calm about the stock market. According to the weekly Handelsblatt survey Dax-Sentiment, there is no particular pressure on the market, large fluctuations are not expected in the coming days.
The excitement about contradicting statements by the White House did not play a role on the Frankfurt Stock Exchange. Fears that the first phase trade agreement between the United States and China could be put to the test had caused Asian equity markets to tumble during the night: White House trading advisor Peter Navarro said the trade agreement with China was “over” there in the eyes of the United States, the People’s Republic could have prevented the spread of the novel corona virus to other countries.
The comment initially led to a sell-off on the stock markets. However, the mood recovered quickly after Navarro’s explanation that his comment had been taken out of context. US President Donald Trump also agreed on Twitter that the pact is “completely intact”.
Look at individual values
Bayer: The chemical giant’s stock is benefiting from reports of an imminent billion dollar settlement with glyphosate claimants in the United States. As the Handelsblatt learned from the circles of the negotiating partners and the company, the supervisory board of the group should advise and vote on the agreement in the coming days.
The amount of the comparison is said to be the most recently reported sum of eight to ten billion dollars – significantly less than the $ 20 billion that was initially feared. The wave of lawsuits has weighed heavily on the group’s share price for almost two years. The Bayer paper price rose by 5.8 percent.
Wirecard: After nearly ten billion euros in stock market value was destroyed at the payment service provider in just three days, the share stopped its descent. The share price rose 18.8 percent to EUR 18.82. Observers attributed this, among other things, to the fact that hedge funds ended their bets on falling prices. To do this, they have to buy back shares that were previously borrowed and then sold.
The announcement that an arrest warrant had been issued against the former Wirecard CEO Markus Braun did not change the upward movement. On Monday evening, Braun presented himself to the Munich I public prosecutor, the public prosecutor said.
BMW: The Munich-based automotive group benefits from the latest product idea from the US technology group Apple. He is introducing iPhone-based car keys, the company announced at its developer conference WWDC. Apple smartphone users could use the system to unlock and start their vehicle, as well as share the digital key with friends and family using messages. The BMW 5 Series, which will be delivered next month, will have this option. This was well received by investors: the share rose by 1.8 percent.
Volkswagen: The share of the car manufacturer from Wolfsburg also wins significantly on Tuesday. Positive economic data from Germany and the euro zone support statements by VW sales manager Christian Dahlheim. He anticipates a V-shaped economic recovery from the coronavirus pandemic, he said on Tuesday at an online automotive conference. However, the recovery will continue until 2022. Investors grabbed VW stocks, the price rose by 4.5 percent.
Other asset classes
Gold is becoming increasingly popular among risk-averse investors in the corona crisis. The price of the precious metal has risen steadily recently and the highest level in about seven and a half years was reached on Tuesday. A troy ounce (31.1 grams) cost a good $ 1767 at the top. This is the highest level since 2012. The record high of $ 1921, reached in 2011, is still a long way off.
The price of the precious metal is currently being spurred on by several sides. On the one hand, investors are investing in the metal, also known as the crisis currency, because the uncertainty about the progress of the corona pandemic is high. Added to this is the tense relationship between the two world powers, the United States and China.
Another factor that speaks for gold is the persistently low interest rate level in many countries around the world. Investments like gold that do not generate interest benefit from this. Another factor was added on Tuesday: a weak US dollar. Since gold is mostly traded in the American currency, a weak dollar makes the precious metal more affordable for investors in countries outside the dollar zone. This causes demand to rise and thus increases prices.
What the chart technique says
The Dax will probably also test the upward price gap of the past trading week on Tuesday. That lies between the index levels of 11,968 and 12,133 points. Because the daily low from last Tuesday (12,133 points) was above the daily high from Monday of the past week. Such upward price gaps are often interpreted as a sign of further rising prices and are an important area of support according to chart technology.
On the upside it is striking: the Dax had tested the short-term resistance level of 12,400 points several times in the past trading days, but always slipped quickly. On Tuesday morning, it looks as if the barometer can hold steadily above the 12,500 point mark.
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.