MARKETS EUROPE / Hope for economic recovery drives courses | 28/05/20

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FRANKFURT (Dow Jones) – The stock exchange in Europe continues to rise on Thursday afternoon. We are looking for both defensive and cyclically sensitive stocks in all industries. The upswing is only being slowed down by auto stocks, where concerns about China and a further escalation around Hong Kong are weighing on. The DAX rose 0.8 percent to 11,746 points, the Euro-Stoxx-50 rose 1.0 percent to 3,083 points.

Better data out Euro zone and USA

Economic data from the USA to the euro zone are creating a good mood: In the USA, the data for the first quarter turned out to be terribly bad, but the market looks ahead and hopes for an end to the wave of redundancies: the number of unemployment benefit recipients has fallen for the first time since March. This is seen as a signal that the bottom of the economy has passed.

In the first quarter, however, US GDP fell by 5 percent and corporate profits by almost 16 percent. However, the mood of the economy is also improving in the euro zone: the index for assessing the economic situation rose to 67.5 points from 64.9 points. To this end, the EU Commission’s plan for a reconstruction fund of 750 billion euros is driving against the consequences of the coronavirus crisis.

And even the sentiment of equity investors is not yet an obstacle to rising prices: As the current survey by the US Association of Investors AAII shows, the number of bulls is increasing. But the proportion of bears, at over 42 percent, remains massively above the historical average of only 30.5 percent.

China flexes its muscles

One is concerned about China, however, where the draft security law was passed. Not only could Hong Kong lose its status as the preferred trading partner for the United States, the conflict could also become more acute. China is increasingly threatening to do so with its own measures. Australia, in particular, is feeling its dependence on China because of criticism of the Hong Kong plan: Beijing has introduced various import restrictions and tariffs as a reaction. In the DAX, the China-dependent auto stocks suffer above all. VW falls by 2.2 percent and Daimler by 1.9 percent.

Otherwise, things are going up, even defensive stocks such as Merck KGaA and Vonovia are up over 3 percent and more, and Wirecard is up 4.5 percent.

Aviation wanted again

There is mostly positive news for the aerospace industry: engine manufacturer Rolls-Royce is slumping over 8 percent in London; but only because major shareholder Ako Capital said goodbye to his investment. MTU in the DAX only fell by 0.6 percent.

Saffron in Paris, meanwhile, grew by 1.2 percent, here the hope of restarting production at its customer Boeing is driving. Airlines are sought across Europe, and the coronavirus crisis is seen as an opportunity for massive streamlining. Among other things, Easyjet wants to cut 30 percent of the jobs, the shares climb by 5.4 percent, Lufthansa increase by 3.4 percent,

Online trade continued to be sought

Online trader stocks are sought throughout Europe as beneficiaries of the coronavirus crisis. In the MDAX, Delivery Hero and Teamviewer increase by up to 5 percent, Zalando by 3 percent. Tail wind also comes from London’s Zalando-Peer Boohoo, who jump over 16 percent there.

The reporting season still provides some impetus for second-row values: Knorr-Bremse’s figures are below the previous year, but also broadly above expectations. Here it goes up 1.5 percent. Nordex increase by 1 percent. The wind turbine manufacturer has received an order from Innogy for a 27 MW project.

According to good figures, the JDC share is up 1.7 percent. “With the new customers on the platform, it has already become apparent that the earnings side is improving,” said one dealer.

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Equity index most recently +/-% absolute +/-% YTD

Euro-Stoxx-50 3,082.59 1.03 31.51 -17.69

Stoxx-50 2,926.66 1.30 37.43 -14.00

DAX 11,746.26 0.76 88.57 -11.34

MDAX 25,566.32 1.65 414.29 -9.70

TecDAX 3,159.79 1.62 50.41 4.80

SDAX 11,514.70 1.06 120.76 -7.97

FTSE 6,216.76 1.18 72.51 -18.54

CAC 4,751.75 1.34 63.01 -20.51

Bond market recently absolutely +/- YTD

German Ten-year return -0.42 -0.01 -0.66

US ten-year return 0.69 0.00 -1.99

CURRENCIES last +/-% Thu, 8: 38h Wed, 17:11% YTD

EUR / USD 1.1039 + 0.28% 1.1021 1.0977 -1.6%

EUR / JPY 118.92 + 0.29% 118.86 118.34 -2.5%

EUR / CHF 1.0688 + 0.30% 1.0670 1.0638 -1.6%

EUR / GBP 0.8984 + 0.08% 0.8979 0.8985 + 6.2%

USD / JPY 107.75 + 0.02% 107.82 107.81 -1.0%

GBP / USD 1.2286 + 0.20% 1.2274 1.2216 -7.3%

USD / CNH (offshore) 7.1607 -0.28% 7.1730 7.1865 + 2.8%

Bitcoin

BTC / USD 9,401.26 + 3.79% 9,149.76 9,193.01 + 30.4%

ROHÖL last VT-Settl. +/-% +/- USD% YTD

WTI / Nymex 32.88 32.81 + 0.2% 0.07 -44.2%

Brent / ICE 34.79 34.74 + 0.1% 0.05 -45.2%

METALLE last day before +/-% +/- USD% YTD

gold (Spot) 1,722.69 1,709.25 + 0.8% +13.44 + 13.5%

Silver (spot) 17.36 17.25 + 0.7% +0.11 -2.7%

Platinum (spot) 838.40 824.25 + 1.7% +14.15 -13.1%

Copper future 2.40 2.38 + 0.6% +0.02 -14.7%

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Contact the author: [email protected]

DJG / mod / ros

(END) Dow Jones Newswires

May 28, 2020 10:11 ET (14:11 GMT)

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