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In the morning: DAX, Dow Jones record, Novartis and KWS Saat in focus – Nord LB column

In the summer quarter, the German economy recovered much more clearly from the corona crash than previously assumed. In Q3, GDP climbed by 8.5% compared to the previous quarter and even exceeded an initial flash estimate from the end of October (+ 8.2%). In the current quarter, the second corona wave with its partial lockdown threatens a new setback that could cause the economy to shrink again.

The mood in the German economy deteriorated significantly in November. The ifo business climate index fell to 90.7 points. The future-oriented business expectations fell significantly (the sub-index fell from 94.7 to 91.5 points). This reflects the growing concerns about the rampant second wave of infections. The state containment measures are having a negative impact on hotels, the hospitality industry and stationary retail in particular. In December the ECB will make its contribution to stabilizing the European economy with a new set of measures. But fiscal policy will also continue to be called upon to shield the economy from permanent damage from the pandemic and to build a bridge to people and companies into the post-corona period.

Bond market

The positive mood on the stock markets again weighed on the prices of German government bonds on Tuesday. However, it was possible to partially make up for larger discounts at the start of trading. US Treasuries suffered repeatedly from hopes of soon available corona vaccines. Mixed US economic data did not manage to provide a counter-impulse.

Stock market

Investors cannot be told twice about the good economic data on the German economy. Their increasing willingness to take risks was clearly visible on the price lists. Previous corona losers such as MTU, Lufthansa, Fraport, Airbus and TUI continued their recovery rallies. DAX + 1.26%, MDAX + 0.11%.

Record! For the first time in Wall Street history, investors saw the barometer above the 30,000 mark. The relenting of the still-US President Trump in the dispute over the handover of office to his successor Joe Biden and progress in the development of vaccines against the corona virus helped significantly to leap over the psychologically important mark yesterday. Dow Jones + 1.5%, S&P 500 + 1.6%, Nasdaq-Comp. + 1.3%. Nikkei-225 firmer at 26,296.86 points.

Companies

The DAX will be fatter from September 2021. Deutsche Börse has announced that it will increase the leading index from 30 to 40 values. In return, the MDAX will be reduced from 60 to 50 stocks. As a consequence of the Wirecard accounting scandal, there will be stricter rules for index membership in the future. E.g. Companies are banned if they do not submit their figures on time. In addition, only companies that can be proven to be profitable should be able to enter the DAX in the future.

The seed manufacturer KWS Saat had to accept a decrease in revenues of 3.6% to EUR 184.1 million in Q1 of FY 2020/2021 due to negative currency effects. If these were excluded, sales would have increased by 6.8%. Higher costs and lower demand caused the operating loss (EBIT) to rise to EUR -50.5 (-42.3) million. KWS confirmed the outlook for the year and expects sales to be at the previous year’s level and an EBIT margin of between 11 and 11%. 13%.

Novartis plans to repurchase shares of up to $ 2.5 billion through the first half of 2021. The share buyback is an expression of the company’s own confidence in the development pipeline, according to the pharmaceutical company. Novartis currently has 49 compounds in the final phase of clinical development or approval.

currency

The euro was able to make up for part of the losses suffered the previous day due to strong US economic data.

Oil / gold

Oil remained in demand on Tuesday. The hope that the economy and thus the demand for oil would also be stimulated with the first corona vaccinations continued. After the gold price tore its technical support yesterday at US $ 1,860 a troy ounce, the “anti-crisis currency” suffered further discounts.

Security data: Deutsche Börse
Ticker symbol: DB1
WKN: 581005
ISIN: DE0005810055
Deutsche Börse – trade now on: comdirectcomdirect – flatexflatex – SmartbrokerSmart broker – Trade RepublicTrade Republic

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