Markets

Dax and Bitcoin with new record highs

D.The first day of trading on the stock exchanges in the new year was characterized by confidence. Not clouded by the discussion in Germany about the federal government’s vaccination strategy, investors are betting that the end of the corona pandemic is approaching. The vaccination campaigns against the corona virus that were started around the world nourished hope. Linked to this is the expectation that there will be a strong recovery in the global economy in the new year. However, above this optimism hangs the warning sign of the continuing increase in the number of infections and longer lockdown measures that are detrimental to the economy.

The German Dax share index rose to a record high of 13,907.13 points on Monday. By the afternoon, the leading index had gained 1 percent. The M-Dax for medium-sized stocks also achieved a record of 31,280.75 points.

The crypto-asset Bitcoin continued its record hunt, further surpassing the $ 30,000 mark. On Monday, the price rose to $ 33,665, an increase of 16 percent since the beginning of the year. However, on Monday it went down to $ 28,019 at times. The enormous price fluctuations are anything but exceptional for Bitcoin. Critics therefore deny the asset, which is based on computer processing power, the quality of a digital currency, because the high rate fluctuations significantly limit its use as a means of exchange or a store of value. However, a few weeks ago the announcement from the online payment service PayPal that Bicoin would also be accepted as a means of payment in future was the starting signal for the impressive price increase. This is said to have attracted financial investors as well.

The sale is a reminder that it is a comparatively new and highly volatile form of investment that has yet to find its place, said Adrian Lowcock, head of Willis Owen’s private customer department at Bloomberg news agency. There are still many hurdles to overcome.

Gold was also very popular on Monday. The price rose by 1.7 percent to $ 1943 a troy ounce (31.1 grams). The dollar devaluation makes the precious metal more attractive to investors outside of the United States. The American currency continued to become cheaper. The dollar index, which reflects the exchange rate to major currencies, temporarily fell to a three-year low of 89.423 points. In return, the euro rose to $ 1.2309. The second reason for the price increase was the property of gold as a protection against inflation. Here, hopes are directed towards the upcoming by-elections for the American Senate in Georgia on Tuesday. Nicholas Frappell, managing director of the online broker ABC Bullion, expects the Democrats of President-elect Joe Biden to win the majority there, too. Investors were looking for assets that could benefit from higher inflation, said UBS analyst Giovanni Staunovo.


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To the detailed view

Even if it is anything but agreed how quickly the price spiral can turn upwards, investors are preparing for the possibility of monetary devaluation. This is shown by the inflation expectations on the capital markets. In the United States, they have risen by one percentage point to 1.9952 percent over a ten-year period since late April. In Germany, the comparative value rose from 0.4 to 0.9 percent. The target rate of inflation of close to 2 percent aimed at by the European Central Bank (ECB) is therefore getting closer.

For Dennis Ehlert, senior portfolio manager at Bantleon, an asset manager specializing in bonds, inflation-indexed bonds are becoming more interesting again. The interest on these securities is adjusted to the inflation rate. The risk: if inflation remains low, as in previous years, the interest rates on these securities will be unattractive. But Ehlert holds against it: Although the current restrictive measures against the pandemic would temporarily dampen inflation expectations, a significant increase in inflation can be expected again in the second quarter. Then an additional return on inflation-linked bonds of 1.5 to 2.0 percentage points compared to normal government bonds would be realistic.

In the Corona crisis, German savers played it safe. According to DZ Bank estimates, the savings rate rose to a maximum of 16 percent last year, as the F.A.Z. reported on Monday. This was the most important reason why the financial assets of German private households rose by almost 6 percent or 383 billion euros to a record high of 7.1 trillion euros in the year of the pandemic. Due to the low share of shares, increases in the value of shares would have contributed little to asset accumulation. “And because interest-bearing investments hardly generate any income, there was only the arduous path of saving to build up assets,” wrote DZ Bank chief economist Michael Holstein.

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