Frankfurt Many investors are currently fluctuating between hope and fear. On the one hand, they are worried about a possible second wave of corona infections. Most recently, there were record increases in new infections within a day in a number of US states as well as another corona outbreak in Beijing.
On the other hand, investors are banking on comprehensive stimulus packages that could get the economy going again after the sharp slump caused by the pandemic. On Friday, the EU heads of state and government discussed the reconstruction plan of up to 750 billion euros via video conference.
A decision had not yet been expected. But there was probably a rapprochement on important issues. The four countries Denmark, the Netherlands, Austria and Sweden had so far strictly opposed non-repayable financial aid to the EU countries most affected by the corona crisis. Apparently they have given up this attitude.
The Dax therefore closed little changed on Friday at 12,330 points. However, there was one big loser: Wirecard, the payment service provider, lost another 35 percent after the share had plummeted by around 62 percent the previous day.
After the group was once again unable to present audited financial statements, as the whereabouts of funds amounting to 1.9 billion euros have not been clarified, CEO Markus Braun took his hat.
Investors reacted positively to Braun’s resignation. At times, the share had even fallen by almost 52 percent on Friday and was trading below 20 euros. But since the details of the balance sheet scandal are still unclear, further price capers are almost programmed.
Pandemic is not over
With regard to the overall market, the fluctuations are likely to remain high as long as the corona pandemic is not over. It remains to be seen whether the latest reports on rising infection numbers in some regions are a harbinger of a second wave. But by the autumn at the latest, many virologists are expecting more cases of illness.
Neil Wilson, analyst at online broker Markets.com, said: “There are fears of the disease spreading. But it is not the fear of a second wave of infections that is putting pressure on the markets. ”Investors have become used to the increasing number of cases. Rather, it is the lockdown and the fear of people going out that are depressing the economy and corporate profits.
A lockdown similar to this spring is therefore not imaginable for many investors from an economic perspective. The costs of the hard measures are now becoming more and more apparent.
The Kiel IfW Institute, for example, predicted this week that gross domestic product should decline by 6.8 percent this year. There has never been such a sharp slump since the Federal Republic.
Commerzbank economist Bernd Weidensteiner therefore believes that there will be more selective measures in the event of a second wave: “After all this experience, the hurdle for a complete shutdown with its enormous social and economic costs should be significantly higher than at the beginning of the pandemic” , says Weidensteiner.
Rather, the authorities are likely to impose restrictions on areas in which a particularly large number of people come together, such as at large events or in the catering industry.
The decline in the number of infections in recent weeks has enabled many countries to relax their sometimes tough measures against the spread of the virus, such as curfews, travel warnings and contact restrictions. In many places, the economy gradually returned to normal, which means that the economy can also slowly recover.
Important stock indices had therefore recovered quickly after a sharp slump in March. The Dax dropped from the all-time high of 13,795 points to 8,256 points to rise again to up to 12,913 points. The leading US indices developed in a similar pattern.
Support came mainly from the expansionary monetary policy of most central banks. But then it became clear how fragile this upswing was. The leading German index rose by more than three percent in the past trading week, but had fallen by seven percent the previous week.
Weidensteiner from Commerzbank emphasizes that there will always be setbacks in the markets in the current environment. If a second wave of infection occurs, a new sharp slump in the economy like the one in the second quarter is unlikely.
However, the economic recovery would delay and the return to the pre-crisis level would be postponed further into the future.
Fiscal policy is crucial
The EU summit on Friday was also about the European economy: The President of the European Central Bank, Christine Lagarde, has warned the EU heads of state and government against negative market reactions if no agreement is reached on the financing of the economic expansion program.
The recent calm in the financial markets is partly due to the fact that investors have priced in government measures, the ECB chief said, according to the Bloomberg news agency. But Lagarde warned that without a consensus on the reconstruction fund, the mood could change again.
An expansionary fiscal policy is also crucial for Edgar Walk, chief economist at Metzler Asset Management, in order to avoid another recession in the second half of the year.
Only if the economic stimulus packages were put together generously would the chances of a further economic recovery be good if national lockdowns fail to materialize.
Eric Schweitzer, President of the German Chamber of Commerce and Industry (DIHK), emphasizes that a common, viable solution is important because no country can get out of the crisis alone: “Only if the EU economy as a whole regains its footing can we have it together Opportunity for a quick recovery. “
Not least because of this, investors are also paying attention to the economic data that the new week has in store. The next Tuesday, the purchasing manager indices for industry and the service sector will come from the Eurozone, Great Britain and the USA.
However, according to Commerzbank, these are not very meaningful. In normal times, they are a good indicator of the economy. An exception is a sharp recession. While purchasing managers’ indices are rising relatively quickly, it usually takes the economy longer to recover.
However, the ifo business climate index for June, which will be published on Wednesday, is likely to be of interest in Germany. The indicator is based on reports from over 9,000 companies on their business situation and their expectations for the next six months. After a sharp slump in April, the index recovered slightly in May.
The GfK consumer climate for July follows on Thursday. The barometer reflects consumer sentiment, which was clearly clouded over in the May survey. Here, too, a recovery from the corona shock was evident in the subsequent evaluation.
On the corporate side, the real estate group Deutsche Wohnen comes into view, which will become a new Dax member on Monday. Relegated Deutsche Lufthansa is now listed in the MDax.
At the extraordinary general meeting on Thursday, shareholders must vote on the rescue package for the ailing airline. Most recently, the new major shareholder Heinz Hermann Thiele had commented critically on the planned state participation in the airline.
However, investors should continue to pay particular attention to Wirecard. Index experts are already speculating that the payment service provider could become the next relegation candidate from the first stock exchange league.
The regular review date of the Dax by Deutsche Börse is only on September 3. With the delivery service Delivery Hero and the flavor manufacturer Symrise, potential successors for Wirecard have already been named.
More: No breakthrough in corona reconstruction, but first approach