The stock exchanges have largely anticipated the economic recovery from the Corona crisis. But is that sustainable? The economic data in the coming week could indicate this.
After the rapid price increase in recent months, the stock exchanges are now facing difficult times. The economy has achieved the first strong upswing after the collapse in the wake of the corona curfews. But the question of when it can get back to pre-virus levels is likely to keep investors busy for a long time to come. The focus is now on the consumer, said Robert Greil, chief strategist at the private bank Merck Finck. "A sustainable economic recovery is impossible without increasing private consumption."
In the past week, the Dax did not move and drove a slight week minus. The US stock exchanges, however, are still at a recored level. On Friday, the purchasing managers' indices put pressure on prices: although the leading indicators continued to point to growth in August, this was no longer as high as it was in July. The Ifo index, which is also expected to increase slightly, should therefore be a topic of conversation in the coming week.
Politicians in many countries have launched economic stimulus programs at record levels, said Alexander Lukas, an expert at Weberbank. But in the USA, a lot of aid, for example for the unemployed, recently ran out again. Democrats and Republicans have since been wrestling over another package, while US President Donald Trump released money by ordinance. "The longer an agreement can be reached, the higher the risk for the battered US economy," said Lukas.
Euro strength worries
The USA is particularly hard hit by the pandemic, tens of thousands are infected with the corona virus every day. That weighs on the US currency, which lost 7.1 percent to a currency basket and almost nine percent to the euro in the past six months alone. A firmer euro usually causes problems for export companies. This time the risk is lower because the collapse in demand in the USA has reduced the dependence of many European companies on the dollar, said Markus Wallner, an equity expert at Commerzbank. "If the strength of the euro continues, however, this would put pressure on BMW, Daimler, Adidas and Infineon in particular from the DAX companies."
The US election campaign is likely to cause a stir: After the official nomination of Joe Biden as a candidate for the Democrats, the Republicans now want to put Donald Trump up for a second term. At the moment it seems like Biden is ahead, said Sandrine Perret, an economist at Vontobel Asset Management. He is primarily in favor of higher taxes with which he wants to finance a green infrastructure project. In addition, he is likely to pursue a softer strategy in the dispute with China. The choice, however, is unlikely to have a blanket effect on risky assets, rather it is likely to have effects within the various sectors, she said.
On the other hand, impulses from companies are hardly to be expected in the coming week, only a few latecomers present their business figures. It was a very good reporting season, said Weber bank expert Lukas. "Measured against the extremely low expectations of the analysts, the companies were able to announce significantly better business results. This also boosts share prices."