Stock exchanges: The record hunt continues

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On February 17, the DAX stood at 13,795 points, up to the record high it was still around four percent. For comparison: France’s CAC 40 stood at 6,111 points on February 19, until then the index of our neighboring country is missing about nine percent. The all-time high of the CAC 40 comes from the telecommunications bull market in 2000. At around 17 percent, the UK’s FTSE 100 is still quite a long way from the pre-Corona high, the all-time high from May 2018 is a tad higher. The European Stoxx 50 is trading around 13 percent below its pre-pandemic level, reaching its historic peak in 2000. In a European comparison, the DAX is comparatively close to the record and is hot on the heels of the Dow Jones, New York’s most economically sensitive index. One reason is certainly the mild course of the pandemic in Germany to date. The effect of the adopted corona measures on consumption and the economy could be decisive in the coming weeks as to whether the DAX follows Wall Street in its record hunt.

The US stock market ended the shortened trading session on Friday with gains after the holiday break. As on Wednesday, investors were particularly pleased on the Nasdaq technology exchange: While the NASDAQ 100 selection index ultimately climbed 0.9 percent to 12,258 points, the Nasdaq Composite set a new record right from the start. In contrast, the Dow Jones Industrial ended up only gaining 0.1 percent to 29,910 points. The leading index thus lagged well behind its record high on Tuesday, when it exceeded the 30,000 mark for the first time. After all, it posted an increase in value of around 2.2 percent for the shortened trading week. For the market-wide S&P 500, it rose by 0.2 percent to 3,638 points – at times it was not even two points short of its two and a half week old record high.

No trading took place on Thursday on the US stock exchanges due to the Thanksgiving holiday. In addition, the final bell was rung three hours earlier than usual on this Friday. Because many market participants in the USA usually say goodbye to the Thanksgiving celebrations on a long weekend, trading activity remained rather calm. Those who were there blocked interested in the latest vaccine news from Europe. The pharmaceutical company AstraZeneca announced additional investigations into its corona vaccine after doubts about the study design and the high effectiveness of the agent arose. On behalf of the British government, the local supervisory authority will now review the drug.

While AstraZeneca shares in Europe ultimately recovered somewhat from the recent downturn, corona vaccine manufacturer Moderna continued their record hunt on Wall Street: They rose by over 16 percent. The papers of the US pharmaceutical company Pfizer and its Mainz partner BioNTech, whose vaccine candidate also showed a high level of effectiveness, gained almost two and almost five percent, respectively.

In view of “Black Friday”, the focus was also on retail. Because of the Corona restrictions, customers are increasingly relocating their purchases to the Internet, which benefits mail order companies such as Amazon. Its shares gained only 0.3 percent and thus lagged behind the Nasdaq development.

The Dax had previously closed above the last hard-fought mark of 13,300 points. Thanks to the tailwind from the leading Wall Street, the leading German index closed 0.4 percent higher at 13,336 points, after having climbed to its highest level since the beginning of September. On a weekly basis, this results in an increase of 1.5 percent for the Dax.

The MDAX of the 60 medium-sized stocks gained 0.8 percent on Friday to 29,375 points. The SDAX small cap index continued its record rally and closed trading one percent higher at 13,835 points.

The investor focus is once again on chemical and banking stocks, commented analysts. The shares of automobile manufacturers are still rather less popular. These suffered from profit-taking and shifts in the portfolios of institutional investors in favor of technology and chemical stocks. Among the individual values, the preferred shares of Volkswagen lost 1.8 percent at the end of the Dax. A downgrading of the VW preferences by the investment bank Exane BNP Paribas also had a negative impact.

The shares of Infineon made it to the top of the Dax with a plus of 3.5 percent and to the highest level since 2001. A buy recommendation from Commerzbank drove the shares of the fertilizer group K + S up 3.4 percent. In early trading, they had risen to their highest level since February. Analyst Michael Schäfer wrote that unexpectedly high proceeds from the sale of the American salt business and a billion-dollar depreciation in the third quarter would have reduced the balance sheet risks. In addition, the agricultural environment is brightening noticeably, which could drive up fertilizer prices.

The fact that Donald Trump’s influence is slowly waning is shown by news that recently seemed unthinkable. Last week the US Federal Reserve (Fed) announced that it had applied for membership in the climate protection club called Network for Greening the Financial System (NGFS). The NGFS has two goals in mind: to support the development of climate risk management in the financial sector and to mobilize private and public funds to support the transition to a sustainable economy. The club started in 2017 with eight members and has now grown into a community of central banks from over 60 countries, which range from the small Seychelles to large China and together make up 58 percent of global gross domestic product, writes -Michael Lewis, DWS Head of ESG – Thematic Research.

As early as the first three months of 2020, the corona pandemic took its toll on companies’ profit distributions. That continued into the third quarter, according to the latest edition of the Janus Henderson Global Dividend Index (JHGDI). In the third quarter, total dividends fell by a total of 55 to 329.8 billion US dollars, the lowest level since 2016. All in all, more than two-thirds of companies increased their dividends or kept them stable during the third quarter the remainder shortened or canceled the dividends. The largest declines in the third quarter were seen in companies in the consumer goods sector. Here, dividends were cut 43 percent on an adjusted basis, with automakers and leisure companies making the biggest cuts. Media, aerospace companies and banks were also hit hard. The greatest resilience was seen in sectors traditionally considered defensive, including pharmaceuticals, food manufacturers and food retailers, all of which increased their payouts on an adjusted basis. In the best-case scenario, global dividend payments could fall by 17.5 percent to $ 1.2 trillion for the full year, experts at Janus Henderson estimate. In the worst case, the payouts could even fall by 20.2 percent.

One consequence of the massive slump in global profit distributions is that dividend funds, in particular, have struggled in terms of performance for global equity funds in the past twelve months. The Deka-Dividenden strategy and the DWS Top Dividende show a low negative return on a twelve-month basis. However, according to FVBS, the two flagships did better than comparable dividend ETFs. Among the major global equity funds, the Morgan Stanley Global Opportunity Fund was ahead with a gain of over 60 percent in the past twelve months – thanks in part to its high weighting in tech stocks.


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