Saturday, January 02, 2021
Investors optimistic despite the crisis
Corona aid keeps the stock market rally going
Despite the crisis, the Dax ended 2020 almost at a record level. Even at the beginning of the new stock market year, investors are confident despite the pandemic and lockdown. Generous support from governments and central banks could push prices up further.
Although the effects of the corona vaccinations that have only just begun have yet to develop and an end to the corona restrictions is not in sight, the stock exchange operators will continue to rely on financial support from politicians and central banks in 2021. It is not certain that the Dax will continue to rise seamlessly at the beginning of 2021 – as the last trading days before New Year's Eve have already shown. After the top marks, the important indices of the Dax family ran out of strength for the time being.
The German benchmark index ended the last trading day of the year on Wednesday with a close at 13,718 points. Despite the corona shock in 2020, he gained around three and a half percent. Since the annual low of 8255 points in March, it has even increased by around two thirds. The MDax of medium-sized stocks closed on Wednesday 0.38 percent lower at 30,796.26 points, while the SDax small-cap index was almost flat. These two stock market barometers had also reached highs the day before.
Most recently, it suited the market participants well that shortly before the end of the year after a violent tug-of-war between the two political camps in the US, another corona aid package had been passed by Congress – and the outgoing US President Donald Trump quickly withdrew his veto. Speculation about an even larger package is already in circulation after the US House of Representatives voted to increase the corona aid payments. Whether this will actually happen is questionable in view of the resistance of the Republicans. In the Senate, higher aid payments to citizens were initially blocked.
Little company data
The trade pact between Great Britain and the European Union, negotiated to the last second, had also given the market a boost in the last trading week of 2020. However, with the record of 13,903 points reached shortly before the end of the year, investors took a certain mortgage for the new stock market year, as a hoped-for recovery from the virus crisis is at least partially anticipated. If the Dax manages to stay at this level, some investors could be forced to dissolve their bets on a price decline and thus give the leading German index additional tailwind, says investment expert Joachim Goldberg from the consulting firm Goldberg und Goldberg.
After two shortened weeks, trading on the Frankfurt Stock Exchange will begin again for a full five days from Monday. However, many players are likely to still be in the Christmas break and trade will be leisurely. At the beginning, the local stock exchanges are likely to depend on the US stock exchanges and initially understand the last price movements there. The Dax had ended its trading on Wednesday before the US kick-off, and unlike in Frankfurt, Wall Street was also traded on New Year's Eve.
The agenda for the coming week is primarily geared towards the economy. The European purchasing manager indices will begin on Monday. The US labor market development should be exciting in December. The US service provider ADP's monthly unemployment figures on Wednesday will be followed by the US government's official labor market report on Friday. How the start of the new year looks like for the many restaurants and retail stores currently closed in Germany will be decided in the coming week. On Tuesday, the Prime Minister and Chancellor Angela Merkel will discuss how to proceed in the Corona crisis. Most recently, there were many indications that the tightened lockdown, which currently applies until January 10, will be extended.
There are only a few appointments on the corporate side. Also on Tuesday, the leasing specialist Grenke, who has been targeted by short sellers, is expecting new business figures in the fourth quarter.
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