S.he takes place almost annually on the stock markets: the year-end rally. Thanks to the Christmas bonus, private investors want shares in the Advent season. Fund managers are interested in window dressing their portfolios by buying winning stocks. But the year that is drawing to a close is an extraordinary one in view of the corona pandemic. The past trading week has shown what the markets are missing: certainty about the end of the pandemic and the economic consequences of the lockdowns.
The former rises and falls with the prospect of a vaccine being used soon. Now there are two vaccine projects that give rise to hope. The second question remains uncertain for even longer, because government aid measures such as the suspension of bankruptcy filings hide the true extent of the corona crisis.
One of the optimists is Carsten Klude, chief economist at the Hamburg private bank M.M. Warburg: “The stock markets started the year-end rally.” What is striking about the current development is that cyclical companies in particular have developed positively. This is shown by a look at the winners in the Dax last week: Daimler, BMW, the plastics manufacturer Covestro and Adidas are all companies that go with the economy, based on the old hit by Hazy Osterwald.
But the high number of infections and the tightened economic measures are still weighing on the mood on the stock exchanges. That is why Commerzbank analyst Markus Wallner remains cautious about company figures in the fourth quarter after the results were very good thanks to the strong economic recovery in the third quarter. He believes that the new restrictions imposed in many European countries are likely to affect the business of many companies.
According to analysts at DZ Bank, monetary and fiscal policy support combined with the change of power in the United States as well as hopes for a vaccine and the post-corona boom are driving the stock markets. Corporate profits should recover in the next two years thanks to a better economy and bring new records to the Dax, they write in their weekly outlook. In their initial forecast for the end of 2021, the DZ Bank analysts expect the Dax at 14,000 points. That would be an increase of a good 6 percent compared to the current level. That’s little for an economic boom, but a large part of that has recently been priced in.