What made the duo success

Buffet-Munger

(Photo: IMAGO)

Düsseldorf The motto of the two American stock exchange legends is as simple as it is clear: “We only buy what we understand. If something is too difficult, we turn to something else. “

Warren Buffett and his lesser-known partner Charles Munger have followed this strategy for more than five decades. Their success proves them right: the value of their Berkshire Hathaway stock, in which they have combined their holdings, has risen from $ 19,000 to over $ 300,000 in the past 54 years. That corresponds to an annual return of around 20 percent. This rapid rise in price made Buffett a billionaire – and many early shareholders millionaires.

So much success over such a long period is unique and has earned worldwide recognition. Growing up in the small town of Omaha, Nebraska, Warren Buffett became interested in making money from an early age. When he was six, he bought a six-pack of Coca-Cola bottles for a total of 25 cents. He sold every single bottle for five cents. He pocketed the net profit with a proud net return on sales of 20 percent.

His first business with the dark shower, of which Buffett is now the largest single shareholder, he quickly expanded with the sale of golf balls, popcorn and newspapers. In 1947 Buffett bought a Rolls-Royce for $ 3,500, which he rented for $ 35 a day. His photographic memory made it easier for him to study business administration, which he had now taken up, and gave him enough freedom to earn more and more money – increasingly with shares and the purchase of entire companies.

For this purpose, Buffett founded the “Buffett Partnership” in 1956. He bought company shares, which he divided into three categories: majority stakes with influence on corporate governance, long-term investments in undervalued stocks and, thirdly, the purchase of insolvent companies. After the dissolution of this first company, Buffett founded “Berkshire Hathaway”, with which he took over more and more shares in companies, including shares in Coca-Cola, Gillette and American Express.

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Börse Express – Addiko Bank: AGM decided on a conditional dividend of 2.05 euros for 2019 / subject to two conditions

At today’s virtual general meeting, the shareholders of Addiko-Bank resolved a conditional dividend of EUR 2.05 per share for the 2019 financial year, as the bank announced on Friday. The payment of the dividend is dependent on two conditions.

On the one hand, the fact that before or at the latest by the publication of the 2020 annual financial statements on March 10, 2021, neither a recommendation by the ECB nor a legally prescribed prohibition on dividend distribution will prevent a payment, and that the Common Equity Tier 1 capital ratio (CET1) of Addiko Bank AG (and Addiko Group) is not below 18.6 percent after such a distribution. The payment day for the dividend is the 20th working day after both conditions have been met.

Since the disclosure in the first half of 2020, Addiko Bank AG (and the Addiko Group) have consistently aligned themselves with a capital ratio of more than 19 percent (CET1) for the end of 2020, whereby the proposed dividend for 2019 has already been deducted.

At today’s general meeting, Herbert Juranek and Frank Schwab were newly elected to the supervisory board after supervisory board chairman Hans Lotter and his deputy Henning Giesecke, as already announced, resigned at the end of the general meeting and left the supervisory board. The supervisory board consists of six shareholders, two women and four men.

Addiko Bank AG was also authorized to purchase treasury shares up to 10 percent of the share capital for a period of 30 months from the date of the resolution by the general meeting for the purpose of offering shares to employees, executives and members of the management board and supervisory board.

itz/sp

 ISIN  AT000ADDIKO0
 WEB   https://www.addiko.com/

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Börse Express – Oil prices inconsistent

Oil prices initially did not find a clear direction on Friday. In the morning, a barrel (159 liters) of North Sea Brent cost $ 47.81. That was two cents more than at the close of trading the previous day. The price for a barrel of the US West Texas Intermediate (WTI), however, fell by 70 cents to 45.01 dollars.

Most recently, oil prices have fallen again after reaching their highest level since the first Corona wave in spring during the week. The prospect of virus vaccines soon available is providing a boost to the oil market. The hope is that restrictions to contain the pandemic could then be removed, which would benefit the economy and increase oil consumption. Rapid and widespread vaccinations are unlikely, however.

In this situation, the major oil-producing countries will have to decide on their production policy at the beginning of next week. It is expected that the Opec + oil network, contrary to the previous plan, will not increase its production at the beginning of 2021, but will instead continue existing production limits. In this way, the association would react to the short-term economic dampener as a result of the current virus wave./bgf/mis

AXC0071 2020-11-27/08:00

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Börse Express – Austrian government bonds increased in late trading / yields decreased

The prices of Austrian government bonds rose in late trading on Thursday. In return, the yields fell. That of the trend-setting ten-year Austrian benchmark bond fell by 2 basis points to -0.44 percent. The yield spread over the comparable German bond was 14 basis points. The Euro-Bund-Future rose by 0.10 percent to 175.50 points.

The second lockdown will bring Austria into a slight recession over the winter, specifically in the last quarter of this year and in early 2021. This is what the economic experts at Bank Austria assume. In addition, economists expect that the lockdown in most European countries will last until the beginning of spring – i.e. until the end of the first quarter of 2021 – only partially interrupted by certain easing around Christmas or with an open retail trade.

On the data side, the consumer climate index determined by the research institute GfK for December fell to minus 6.7 points, after revised to minus 3.2 points in November (previously minus 3.1). In addition, the M3 money supply rose again in the euro area.

Yields of selected Austrian benchmark bonds:

Laufzeit Aktuell Vortag Veränderung Spread (in Basispunkten)
2 Jahre  -0,74   -0,72  -0,02       2                       
5 Jahre  -0,70   -0,68  -0,02       6                       
10 Jahre -0,44   -0,42  -0,02       14                      
30 Jahre 0,07    0,10   -0,03       24                      

hundred

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“You’d have to stop buying ETFs”

Mohamed El-Erian

Allianz’s chief economic advisor recommends looking more closely at individual values ​​in the future.

(Foto: Bloomberg)

New York “Vaccine Monday” is the new winged word on Wall Street. For the third Monday in a row, positive news from companies about their success in developing a corona vaccine fueled markets. First Pfizer and Biontech, then Moderna and now Astra-Zeneca are sending clear signals that an end to the pandemic could be in sight.

Mohamed El-Erian can understand the optimism. The chief economic advisor to Allianz also points out that the logistics required to transport the vaccine will appear to be simpler than initially expected. Not all products need complex cold chains. The Astra-Zeneca vaccine can even be stored in the refrigerator for months.

But El-Erian also points out that “it is not just about the goal, but also about the way there. And that will be very uneven in the coming months, ”said the former head of the largest private bond investor Pimco in an interview with the Handelsblatt.

According to El-Erian, the markets are currently in a phase of upheaval: It is no longer just a question of whether a large rotation into economically sensitive, cyclical stocks is beginning or whether the so-called “stay at home” shares will continue to dominate.

The latter mainly include companies such as the video conferencing provider Zoom, the streaming service Netflix and the fitness equipment manufacturer Peloton, which have benefited significantly from the pandemic in addition to the large technology groups such as Apple, Amazon and Alphabet.

Recently there had been a certain tug-of-war between the two groups. After the first vaccine news from Pfizer and Biontech, banks, airlines, cruise lines and industrial companies had benefited significantly, but then lost momentum again.

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“You’d have to stop buying ETFs”

Mohamed El-Erian can understand the optimism. The chief economic advisor to Allianz also points out that the logistics required to transport the vaccine will appear to be simpler than initially expected. Not all products need complex cold chains. The Astra-Zeneca vaccine can even be stored in the refrigerator for months.

But El-Erian also points out that “it is not just about the goal, but also about the way there. And that will be very uneven in the coming months, ”said the former head of the largest private bond investor Pimco in an interview with the Handelsblatt.

According to El-Erian, the markets are currently in a phase of upheaval: It is no longer just a question of whether a large rotation into economically sensitive, cyclical stocks is beginning or whether the so-called “stay at home” shares will continue to dominate.

The latter mainly include companies such as the video conferencing provider Zoom, the streaming service Netflix and the fitness equipment manufacturer Peloton, which have benefited significantly from the pandemic in addition to the large technology groups such as Apple, Amazon and Alphabet.

Recently there had been a certain tug-of-war between the two groups. After the first vaccine news from Pfizer and Biontech, banks, airlines, cruise lines and industrial companies had benefited significantly, but then lost momentum again.

“I believe that in the future we will have to look much more closely at individual values,” says El-Erian, referring to the airlines. “The prospect of a vaccine soon is undoubtedly positive for the industry. But the coming months will be very tough. So it depends on the individual airline and on robust balance sheets. “

Until the vaccine spreads, El-Erian expects the price fluctuations to intensify

The past few months have had a major impact on the financial market expert. “People are underestimating what lies ahead of us,” he warns, and reckons that the consequences of the new waves of infections will also affect the markets. Until the vaccines spread, it will be much more volatile. Europe must certainly prepare for a relapse into recession.

However, it is not yet entirely clear whether there will also be a W-shaped recovery in the USA. Last week economists at the largest American bank JP Morgan Chase were the first to downgrade the forecast for economic growth in America to minus one percent.

Investors should invest cautiously, not in breadth

El-Erian advises investors to be very selective. “You should actually stop buying ETFs,” he says. “This is actually the time for active management, for detailed analysis, for scenario planning and for tactical investing.” Ultimately, it can be assumed that there will be overreactions on the way out of the pandemic, which investors should take advantage of.

But there are currently no signs of a return to active investments. In 2020, more money flowed into ETFs than in the whole of last year. Industry insiders assume that the vaccine outlook will drive investors even more into the exchange-traded index funds.

“ETFs made things very easy,” admits El-Erian. But they would have tempted investors in certain areas to take too high risks. This applies above all to ETFs on illiquid assets such as high-yield bonds and corporate bonds from developing countries, for which ETF providers have promised too much liquidity.

El-Erian believes that the mood on the markets will also be influenced by the US Federal Reserve (Fed) in the coming months. On the one hand, central bankers are currently discussing possible additional supports for the economy in the form of bond purchases, quantitative easing or “QE” for short.

Since the beginning of the corona crisis, the Fed has been buying US government bonds worth $ 80 billion and mortgage-backed securities worth $ 40 billion every month.

graphic

There is also a dispute that US Treasury Secretary Stephen Mnuchin instigated with the Fed last week. This involves a number of emergency programs that the Treasury Secretary does not want to extend contrary to the recommendations of the Fed. These are, for example, loans to small and medium-sized companies and the purchase of municipal securities to support cities and municipalities in the crisis.

The Fed was only able to launch these programs thanks to financial support from the Treasury Department. They expire at the end of the year but could be extended. According to El-Erian, the programs are an important pillar of the markets, even if they are not used in large quantities.

“The markets dismissed that too quickly,” believes El-Erian. Investors would expect the new government under Joe Biden to provide aid again. “But it’s not that easy. The Treasury Department needs a reason to approve such contingency programs, ”he says. So there must first be another disruption in the markets.

A US Treasury Secretary Yellen sends out a good signal to the markets

El-Erian believes that the former central bank chief Janet Yellen Biden is to become finance minister as a good signal for the markets. It tends to prop up the markets. Fed Governor Lael Brainard, who was also in discussion for the post, would tend to “focus on Main Street rather than Wall Street”.

After Biden’s intention to nominate Yellen became public on Monday afternoon, the major stock indices in New York rose again significantly. On Tuesday, the US leading index reached a new record, breaking the 30,000 mark for the first time.

Overall, however, El-Erian hopes that the Biden government will focus less on the markets than was the case under Trump. An “extreme interdependence” has developed between the White House and the stock market. Like no other president, Trump has made his success dependent on the good mood on Wall Street. In the long term, however, this is not good for the country.

It will not be easy to break away from it. “It’s like taking candy away from a child. Then it will scream for a while. But you have to endure that, ”says El-Erian. “Otherwise you are putting the child’s health at risk.”

El-Erian is cautiously investing his money in cyclical stocks

When it comes to his own portfolio, El-Erian remains cautious for the time being. He had precisely predicted the Covid recession and sold most of his investments in February and March. In April he got back in and invested with conviction in “Stay at Home” shares. In June he got out again. “That was too early,” admits the chief advisor.

Since then, he has been cautious again, especially in cyclical stocks, which would benefit from a wider opening of the economy. However, El-Erian is not really convinced of the trend: “It’s more like putting my toes in the water.”

More: Fund manager Bert Flossbach on the importance of stocks as an asset class

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“The union seems to have finally come to naught” – Kommersant FM – Kommersant

Regular protests took place in Belarus. This time there are fewer detainees. This is partly due to a change in opposition tactics – the protesters are more concentrated in the courtyards. Nevertheless, in Minsk, the security forces used special equipment. On the eve of the Nobel laureate Svetlana Aleksievich announced the possible victory of Alexander Lukashenko. Dmitry Drize, political observer for Kommersant FM, believes that opposition leaders should try to establish a dialogue with Moscow.

Svetlana Aleksievich did not rule out that Lukashenka might win. This will happen because the opposition wants a peaceful transfer of power, but in the current situation it is difficult to imagine that this could happen. Belarus is a small country, it does not play a big role in the world, democratic institutions are not developed there, so there are not so many ways to force Lukashenka to leave in an amicable way. There is international pressure, but it is not strong enough to create big problems for the regime.

Aleksievich refused to return to Belarus while the current leader is at the helm. The Nobel laureate in literature is not ready to become president because she is a writer, not a politician. There is an opinion that Svetlana Aleksievich could lead the country during the transitional period, since she enjoys indisputable authority both inside Belarus and abroad. But, again, while Alexander Grigorievich controls the security forces, it is difficult to imagine how this can be done.

Meanwhile, regular protests were held in the republic. Lukashenka’s opponents have changed their tactics – they are more concentrated in the courtyards. Nevertheless, again detentions, dispersals, and, most importantly, the permanent leader remains in place. Can Lukashenka Really Win? In the long run, unlikely. But right now he is feeling relatively confident, at least publicly demonstrating that confidence. With Russian support, it is much easier for him, although international pressure is increasing. The electoral history in America will come to an end sooner or later, and then, probably, it will be more difficult for the President of Belarus. Nevertheless, it is better not to lead to the collapse of the economy.

Perhaps the coordination council of the opposition should act more actively, which is also being debated, create a government in exile, proclaim a plan for the transfer of power, although something similar is being done. There can be no ideal solutions in such a situation.

There is a way out – this is the formation of public opinion around the world and, most importantly, in Russia.

And here we really need authoritative enlightened people like Svetlana Aleksievich. She has already tried to do this with her message to the Russian intelligentsia. The latter responded, but not so much. We need to continue, well-known intelligent people should be at least uncomfortable when this happens in a neighboring country, besides, the Russian authorities cannot be satisfied with their partner. The project called “deep integration” and even a new alliance seems to have finally come to naught.

That is why the Belarusian opposition, perhaps, should try to grope for a dialogue with Moscow. Such attempts were made by the coordinating council, but this is not enough. It is difficult, understandable, but this is almost the only way out to avoid the final degradation of the state. And the Kremlin does not need this degradation at all, since it will inevitably come back to haunt the elder brother. It’s another matter that common sense hasn’t always won out lately. Therefore, the inevitable change of power in Belarus clearly does not promise to be cloudless.

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Where investors are most likely to find companies that pay out a lot

Wall Street view

Wall Street is where the biggest dividend payers are.

(Photo: AP)

Frankfurt, Düsseldorf Shareholders feel the consequences of the corona pandemic directly on their accounts: In the third quarter alone, companies worldwide paid out a total of 55 billion US dollars or a good eleven percent less dividends than a year earlier. Every third company cut or canceled its dividend. This is the result of a study by the British fund provider Janus Henderson of the 1200 largest companies in the world that the Handelsblatt has available.

Even if the distributions fell even more sharply in early summer because many companies suffered massive business losses in the wake of the pandemic-induced economic standstill: The fund professionals assume that dividends in 2020 will fall by at least 17 percent or 224 billion US dollars. For the first time in eleven years, the dividends are falling significantly.

This is bad news for investors: They often rely on regular dividend income, especially since there are hardly any coupon payments from bonds in the ongoing low interest rates. After all, the equity professionals expect the situation with the distributions in 2021 to ease – if not immediately.

“The worst cuts are now behind us,” says Daniela Brogt, Head of Sales at Janus Henderson, for Germany, with a view to the fact that dividends collapsed by almost a fifth in the second quarter and that she had feared an even worse dividend year. In Brogt’s view, however, it will take some time before the companies’ business and earnings situation revives to such an extent that they can let their shareholders participate more.

Before the end of the first quarter of 2021, the fund expert does not expect companies to pay higher dividends again on balance. This of course depends on the further course of the pandemic and the degree of further economic restrictions. But depending on where you look, there are deviations. In which regions are investors most likely to find companies that pay out a lot?

There are big differences in dividends by region

The equities experts find big differences by region, which is mostly due to the dominance of certain industries. There have recently been sharp declines in dividends in Australia, Great Britain and the rest of Europe, where banks and companies from the export-strong sectors such as the auto or leisure industry, which has been particularly hard hit by Corona, saved their liquidity reserves. In Europe, distributions have fallen across the board, as at Bayer in the pharmaceutical sector, Nokia in the telecommunications sector, Airbus in industry or ING in the banks.

And that is likely to continue for the time being, fear equity experts. “In the Corona times we are experiencing the turning point for the thesis that dividends are the new interest rate given the central banks’ zero interest rate policy,” says Andreas Hürkamp, ​​chief equity strategist at Commerzbank.

The result is disappointed investor expectations, which are reflected in the disappointing price performance. The Euro Stoxx 50, Europe’s flagship on the stock exchange, is trading at around 3450 points, almost the same level as five years ago. That means nothing else than that nothing could be gained from funds or ETFs with a focus on Europe.

The picture in the USA is completely different: “After the brief corona crisis, the vast majority of companies are paying out stable and even rising dividends again, which investors reward with higher expectations and thus also with rising prices,” argues the stock expert. The Janus study documents a more stable situation in the US economy with its technology giants and robust pharmaceutical companies: In the third quarter, only every sixth company cut its dividend, a total of almost four percent.

graphic

The broad market S&P with America’s 500 largest companies is almost 40 percent higher today than it was five years ago. “This is a consequence of higher profit, but also dividend expectations,” says Commerzbanker Hürkamp. Europe, including Germany, is still a long way from such a turnaround.

According to calculations by Deutsche Bank, the 500 largest American companies, as listed in the S&P 500, should pay out around 500 billion US dollars in dividends this year. That would be just under one percent less than the year before. While 67 companies cut or canceled distributions in the face of the recession, even 216 companies paid out more.

In a few countries, the study authors recently noted rising dividends. In addition to Canada, they name Hong Kong and China, which first went through the corona pandemic.

Unlike in Europe, stable dividends have a long tradition in the USA. Many companies have not reduced their distributions for decades: neither after the dot-com bubble burst and the terrorist attacks on the USA in 2001, nor in the severe financial and economic crisis of 2008/09, or now in the corona crisis.

The best dividend payers come from the United States

Above all, billion-dollar pension and investment funds attach great importance to stable distributions in order to be able to plan better with the money of their customers. Accordingly, the great role models can be found on Wall Street. Coca-Cola and the pharmaceutical producer Johnson & Johnson have been increasing their dividends here since 1963, the conglomerate 3M with the yellow Post-it notes has increased them since 1959 – and Pampers manufacturer Procter & Gamble has been increasing dividends since 60, the tobacco company Philip Morris for over 80 years.

No wonder that the best dividend payers come from the USA. After all, US companies account for a third of the dividend payments that Janus Henderson estimates at $ 1.2 trillion for 2020. The “dividend kings” this year are therefore the software giant Microsoft, which has already distributed $ 11.6 billion, the telecommunications company AT&T with $ 11.2 billion and the oil giant Exxon Mobil with $ 11 billion. The Chinese China Construction Bank follows in fourth place with 10.8 billion dollars.

Dividend payments are made differently internationally. While Anglo-Saxon companies in particular pay quarterly, in Germany an annual distribution is common. The highest dividend yield of the top 20 is offered by Exxon Mobil at a whopping 9.4 percent.

German companies do not make it into the ranking of the world’s 20 largest dividend payers. Calculated over an entire financial year, the insurer Allianz pays out the most in this country with four billion euros, followed by Siemens and BASF with around three billion euros each.

graphic

The reason for the lower absolute dividends in Germany is the smaller company size, measured by the number of shares issued. When it comes to other criteria such as the amount of the dividend per share or the dividend yield, German companies can compete well with the world’s top figures.

Allianz distributed EUR 9.60 per share in the past fiscal year. Measured against the current share price, this results in a dividend yield of five percent. BASF, Bayer and Eon also have a return of around five percent. That is twice as much as the international average of around 2.5 percent.

And in the coming year, the dividend situation should brighten again worldwide, says Brogt from Janus Henderson. “There could be increases again from the summer,” she expects. For the full year 2021, in the worst case scenario, it assumes stagnating distributions, at best an increase of a good tenth is possible.

For the USA, however, experts are more optimistic: “Especially in the USA, dividends should rise again in 2021 in view of the significant economic and profit recovery,” predicts Deutsche Bank’s chief investment strategist, Ulrich Stephan. He thinks a plus of five percent is realistic.

More: Why share prices kept rising

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This is what strategists expect for the Dax in the new week

Frankfurt Stock Exchange

The vaccine rally on the stock exchanges should be over.

(Photo: dpa)

Frankfurt The first euphoria about a corona vaccine has evaporated on the stock exchanges, but the corona fears are not yet back – despite the increasing number of cases around the globe. Nevertheless, the vaccine rally, which was triggered almost two weeks ago by the study successes with an active ingredient from Biontech and Pfizer, is still evident in the courses.

The Dax is a good five percent above its level two weeks ago, and the US benchmark index S&P 500 is a good two percent.

The premiums in the past week were only moderate in the Dax. The vaccine news from the US company Moderna could not trigger a new stock market rally. The fact that antidotes are being found against Covid-19 is now reflected in the prices on the stock markets – it is only about the point in time until when the vaccines can be approved and administered.

This also depends on how the economy develops – with the corresponding consequences for the economy and the development of companies. In the coming week, in view of the corona summit of the federal and state governments on Wednesday, more attention should again be directed to the short-term events. In addition, upcoming economic data could slow the stock exchanges.

Few impulses from Wall Street

There are fewer stimuli from the USA. On Thursday there is no trading on Wall Street because of the Thanksgiving holiday and only shortened on Friday. In the USA, however, there are growing concerns that corona infections will skyrocket again after the traditional Thanksgiving family festival. There are no restrictions there yet.

However, the Helaba experts assume that in the USA, at least regional restrictions can no longer be avoided, even if the elected US President Joe Biden has ruled out a nationwide hard lockdown so far.

In Germany, discussions about stricter measures to contain the pandemic have picked up speed again. North Rhine-Westphalia’s Prime Minister Armin Laschet has already called for stricter contact rules. Strategists like Robert Greil from the private bank Merck Finck do not expect a second hard lockdown like in the spring. Industry and as many service sectors as possible should be spared any new restrictions, he says. Nevertheless, the stock exchanges are likely to remain “short-term volatile”.

Christine Lagarde, President of the European Central Bank (ECB), on the other hand, drew a rather gloomy picture of the economy again last week in front of the Economic and Monetary Committee of the EU Parliament. The economy of the euro zone is already being “hit hard” by the new containment measures, she warned. That jeopardizes the short-term outlook for the economy.

Against this backdrop, investors will pay more attention to the leading economic indicators coming this week. This includes the purchasing manager indices for the euro zone as a whole and for the individual countries on Monday. For the economists at Bayern LB, “their direction is clear, namely downwards”. The only question is by how much.

Weaker Ifo index expected

Economists also expect a decline in the Ifo business climate index due on Tuesday, which reflects the mood among German companies. According to Dekabank, it will be interesting to see whether the positive news about vaccines is reflected, at least when looking at the companies’ business expectations.

No impulses are expected from the companies themselves; most companies have submitted their reports on developments in the third quarter. The numbers were much better than expected, disappointments in the Dax were only at SAP, Bayer and BASF.

Many companies have also raised their earnings expectations for the current fiscal year, including the pharmaceutical company Merck from the DAX and the specialty chemicals company Covestro. Siemens and Adidas, on the other hand, dampened investors’ expectations for the rest of the fiscal year. Markus Wallner, equity strategist at Commerzbank, remains cautious for the fourth quarter. “The recent restrictions imposed in many European countries are likely to affect the business of many companies.”

Is the Dax 40 coming?

Investors are also eagerly awaiting another event in the coming week that is likely to have far-reaching consequences for the Dax and the other stock market indices. Deutsche Börse announced on Tuesday to what extent it is changing the rules for the composition of the indices. Among other things, it is about whether the Dax will be expanded from 30 to 40 values.

More: Shares 2021: This is what strategists expect for the new share year

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