Düsseldorf Investors are concerned about the infection rate at home and abroad, which has now gotten out of control. Fear of large-scale new lockdowns is increasing, and further economic setbacks threaten. The German share index and the Euro Stoxx 50 fell further on Tuesday. The Dax closed at 12,736 points at the close of trading. Today, Wednesday, the leading German index was slightly up at 12,792 points.
Will encouraging company balance sheets prevent price losses in Wednesday’s trading session? Ulrich Stephan, chief investment strategist for private and corporate customers at Deutsche Bank, says that the current balance sheet season has the potential to give the stock markets a tailwind. The market expectations are so low that it should be easy for many companies to exceed them.
In Switzerland Nestlé today publishes figures for the first nine months of fiscal 2020. The corona crisis had already slowed the growth of the world’s largest food manufacturer in the second quarter. In Sweden the telecommunications equipment supplier Ericsson presents its figures for the third quarter of the financial year. With earnings of 4.5 billion Swedish kronor (around 430 million euros), the group had recently significantly exceeded analyst estimates.
In the Netherlands reports Akzo Nobel financial results. In the months from April to June, the result of the manufacturer of paints and specialty chemicals fell significantly. In Germany Darmstadt-based Software AG currently has to cope with the consequences of a hacker attack. For this reason, only central data for the third quarter just ended will initially be reported.
Also in the USA the reporting season continues: The US wireless operator Verizon reports on the third quarter. Sales had fallen in the previous three-month period by a good five percent to 30.5 billion dollars compared to the previous year. In addition, Adena Friedman, head of Nasdaq, announces the figures for the third quarter. In the previous three-month period, the exchange operator was able to exceed market expectations.
What is also important for investors today:
1 – Trade in the United States
Wall Street bounced back from its weak start to the week on Tuesday after a nervous trade. The Dow Jones Industrial closed 0.4 percent higher at 28,308 points. At the beginning of the week, the US benchmark index slipped 1.4 percent into the red. The market-wide S&P 500 gained 0.5 percent on Tuesday to 3443 points. The technology-heavy selection index Nasdaq 100 rose 0.4 percent to 11,677 points.
According to a representative of the Federal Reserve, the US economy will be less affected by a second wave of infections than initially assumed. “It looks like we’re going to fight our way through there, no matter how dire the consequences for households and families across the country,” says the head of the Fed branch in Chicago, Charles Evans.
2 – trade in Asia
On Wednesday, Asian investors reacted differently to renewed hopes for a US economic stimulus package: the Tokyo stock exchange was initially stronger, Shanghai slipped. “It’s going to be a pretty mixed day,” said Ryan Felsman, CommSec senior economist. “People are rethinking the opportunities for a US stimulus package and the markets are very cautious about that.”
The Nikkei index, which comprises 225 values, was 0.5 percent higher at 23,677 points. The broader Topix index rose 0.8 percent to stand at 1638 points. The Shanghai stock exchange was 0.4 percent in the red. The index of the most important companies in Shanghai and Shenzen lost 0.4 percent. The MSCI index for Asian stocks outside of Japan rose 0.3 percent.
3 – Motion of censure against Spain’s head of government
In the midst of the corona crisis, Spain’s parliament will deal with a motion of no confidence by the right-wing populist Vox party against the left-wing Prime Minister Pedro Sánchez from Wednesday. Vox boss Santiago Abiscal takes positions similar to other right-wing nationalist parties in Europe and accuses the government, among other things, of a “criminal” corona policy.
The conservative Partido Popular (PP) as the largest opposition party is in a dilemma. If it abstains, it could cost it to vote in the political center. If she votes against the motion of no confidence, then even more former PP voters could migrate to Vox.
More on the subject:
4 – US Aid Package Negotiations
Will there be movement in the dispute over the US aid package? Two weeks before the US presidential election, incumbent Donald Trump is giving a new twist to the discussion about further stimulus measures in the pandemic. Trump told Fox News that he would approve sums in excess of the $ 2.2 trillion demanded by opposition Democrats, even against opposition from his Republican party friends.
His government originally proposed $ 1.8 trillion. Trump’s Republicans in the Senate are reluctant to spend on this scale. The Democrats, on the other hand, think 2.2 trillion is appropriate. Treasury Secretary Steven Mnuchin and the US House Chairwoman, Democrat Nancy Pelosi, are negotiating an agreement.
The US Presidential Office and Congress are under increasing pressure to provide further aid for the economy, which is badly affected by the pandemic. The stimulus package currently under discussion would add $ 3 trillion in corona aid that Congress approved earlier this year.
5 – Google share under surveillance
In the middle of the presidential election campaign, the Internet giant Google is facing the biggest competition in more than 20 years. The Justice Department and eleven states sued the world’s largest search engine operator on charges that it was abusing its dominant position.
The subsidiary of the Internet company Alphabet is accused of penalizing competitors in search results and in the advertising business. Google’s anti-competitive behavior must be stopped by a court of law and competition restored, the lawsuit said. When asked what action should be taken, a US Justice Department representative said on Tuesday that no option was ruled out. Google denied the allegations.
6 – New strategy from Hannover Re
The new Hannover Re CEO Jean-Jacques Henchoz presented his future strategic plan to investors on Wednesday. He spoke to Handelsblatt in advance about what should change and where the MDax company is growing despite the corona crisis.
The wave of corona infections has hit the reinsurance industry massively: for example, by canceling pop concerts or sports events such as the Olympic Games, but also by protecting against temporary factory closures. Earlier than expected, competitor Munich Re informed about business in the third quarter on Tuesday. The net profit was around 200 million euros and thus less than a quarter of the previous year’s level of 865 million euros, as the group announced.
7 – VW is apparently exploring interest in its Ducati motorcycle brand
According to insiders, Volkswagen is talking to potential bidders about its Ducati motorcycle brand. The group wants to sound out before its planning round in November whether there is interest in the brand, said people who are familiar with the events, the Reuters news agency.
The five-year plan is also about the future of the sports car brands Lamborghini and Bugatti. It is still unclear whether a sale of Ducati will actually be decided at the meeting. In order for a sale to be possible in early 2021, investors and banks would have to sound out price expectations and strategies.
Future planning for Ducati, Lamborghini and Bugatti could therefore also result in technology partnerships, restructuring and other options, including an IPO or a sale. Volkswagen declined to comment.
8 – Netflix gets to feel the competition
Netflix is feeling the competition from other streaming services. The company won fewer new customers in the third quarter than experts expected: In the months of July to September, 2.2 million paying subscribers were added, the group announced on Tuesday after the US market closed.
According to Refinitiv data, analysts had expected an average of 3.4 million new customers. Revenue rose nearly 23 percent year-on-year to $ 6.44 billion, while net income rose nearly 19 percent to $ 790 million.
Interest in Netflix initially increased sharply during the corona pandemic. The company itself attributed the now disappointing figures to the fact that there had already been an increase of more than ten million customers in the previous quarter. But Hollywood studios like Disney and Warner Media are also increasingly vying for video service customers. Even with sports programs, more and more competitors are competing against Netflix. Netflix shares lost almost six percent after the hours.
9 – Speculation about takeover spurs Bilfinger
With a price increase of a good eight percent, the shares of Bilfinger took the lead in the SDax before the trading session. Brokers refer to a media report, according to which several financial investors are interested in the Mannheim construction company. The American investment company Clayton Dubilier & Rice is one of the interested parties, it said. According to the information, the considerations are at an early stage. There is no certainty that a deal will come about. On the one hand, affordable financing must be obtained, it said. Another topic is the business risks related to the corona-related economic downturn and Bilfinger’s involvement in the oil and gas sector. Bilfinger and CD&R spokespersons declined to comment.
Company appointments on October 21
- 7 a.m., Germany, software, Q3 figures (call 9.30 a.m.)
- 7 a.m., Netherlands, Akzo Nobel, Q3 figures
- 7 a.m., Sweden, Ericsson, Q3 figures
- 7:15 a.m., Switzerland, Nestlé, nine-month sales (call 2:00 p.m.)
- 7.15 a.m., Netherlands, Randstad, Q3 figures
- 8:15 am, Spain, Iberdrola, nine-month numbers
- 9 a.m., Norway, Telenor, Q3 numbers
- 9 a.m., Germany, Cempleo Charging Solutions, Prime Standard initial listing
- 1 p.m., USA, Nasdaq, Q3 numbers
- 1 p.m., Great Britain, Manchester United, Q4 numbers
- 1:30 p.m., USA, Abbott Laboratories, Q3 numbers
- 1:30 p.m., USA, Verizon Communications, Q3 numbers
- 10:25 p.m., USA: Tesla, Q3 figures
Company appointments on October 21st without a time
- Germany: Hannover Re, 23rd Investor Day (online)
- Denmark: Novozymes, Q3 figures
- Sweden: Svenska Handelsbanken, Q3 figures
- Sweden: Telia Company AB, Q3 figures
- Norway: Storebrand, Q3 figures
- USA: Whirlpool, Q3 numbers
- USA: Xilinx, Q2 numbers
- USA: Align Technology, Q3 figures
- USA: Lam Research, Q1 figures
- USA: Biogen, Q3 numbers
Dates for economic data on October 21
- 8 a.m., UK: consumer prices 9/20
- 10 a.m., Poland: Retail sales 09/20
- 4 p.m., USA: Speech by Cleveland Fed President Loretta Mester
- 4:30 p.m., USA: EIA oil report (week)
- 6 p.m. USA: Speech by Minneapolis Fed President Neel Kashkari
- 6 p.m. USA: Speech by Dallas Fed President Robert Kaplan
- 8 p.m. USA: Fed, Beige Book
With agency material.