In the coming week, two topics on the stock exchange will provide plenty of talking point: the presidential election in the USA and the corona crisis. Investors have to prepare for turbulent days.
According to experts, the coronavirus pandemic and the US presidential election could shake up the stock markets in the new week. Record increases in the number of new infections and another partial standstill of the economy should be on the nerves of investors at the start of November.
It will take a while until it is clear whether the "breakwater lockdown" decided by the federal and state governments is working as desired, says analyst Jochen Stanzl from the online broker CMC Markets. "Companies, schools and daycare centers should still remain open and there is great hope on the stock exchange that this can stay that way." In terms of the economy as a whole, the closing of restaurants and several service areas will have noticeable effects for another four weeks, "even if the losses are not likely to be as severe as in the spring," says DZ Bank economist Stefan Bielmeier.
In the past few days, the explosion in the number of infections had fueled fear of a renewed recession and brought the Dax a minus of more than eight percent. He recorded the largest weekly loss since the Corona stock market crash in March.
US elections in focus
On Tuesday, investors will look to the US and the race for the White House. It is less a matter of whether President Donald Trump can assert himself or his democratic challenger Joe Biden wins, said Axel Cron, chief investor of the HSBC bank's asset management in Germany. "In essence, both will act reasonably business-friendly. For the capital markets, Fed Chairman Jerome Powell is ultimately more important than the next president, and he has already set the course: permanently low interest rates." A confirmation of this course is expected after the US Federal Reserve meeting on Thursday.
Analysts see the real risk in dealing with the election results. "Should Trump lose, he will make the process of transferring power as difficult as possible," warns Naeem Aslam, chief market analyst at brokerage firm AvaTrade. In addition, the first projections would probably provide a distorted picture, as the counting of the numerous postal votes usually only begins after the polling stations have closed, says Neil Wilson, chief analyst of the online broker Markets.com, to concerns. Investors should therefore be prepared for price turbulence.
This pushes Friday's US labor market data, usually the most important data release of the month, into the background. The figures from the private employment agency ADP two days earlier provide a foretaste. On the schedule are also the mood barometers for the German and European purchasing managers on Monday. Orders received and production figures for German industry will follow on Thursday and Friday.
At the same time, a new wave of company balance sheets is rolling towards investors. About half a dozen companies open their books in the Dax alone. These include the pharmaceutical and agricultural chemicals group Bayer and the two insurers Munich Re and Allianz. From abroad, the low-cost airline Ryanair and Berkshire Hathaway, the investment company of the stock market guru Warren Buffett, provide figures.
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