Despite the third corona wave, many stock indices are setting records – thanks to positive economic data and company news. Even the leading German index never flies that high. But the air is getting thin and thinner.
IIn the midst of the corona pandemic, the hunt for records on the stock exchanges continues. Driven above all by a whole series of surprisingly positive economic data as well as strong company figures and an overall growing confidence, the major American indices repeatedly reached new highs over the course of the week. The Dow Jones managed to surpass the 34,000 point mark on Thursday for the first time in its long history.
In this country, however, the Dax only managed to surpass its record of 15,312 points set up after Easter on Friday – certainly spurred on by the price rally in America. In the days before that, the German standard values showed little movement. The Dax climbed to 15,474 points – an increase of 12 percent since the beginning of the year. The values in the second row in the M-Dax also set a record this week. The smallest value index S-Dax was also above 16,000 points for the first time. The Euro-Stoxx-50 for the euro area climbed to more than 4,000 points – the highest level since the financial crisis in 2008.
Record growth in China
A growth record was also reported from China. China’s GDP grew 18.3 percent in the first quarter, the fastest it has ever seen in a quarter since these data were announced in 30 years. The country’s economy has developed very well despite the pandemic. However, there is also a certain base effect, as it fell by 6.8 percent in the first quarter of 2020 and thus significantly down.
Contrary to what the stock market rally might suggest, the environment is still characterized by many risks, especially since many stocks are now considered to be highly valued. According to the World Health Organization, the number of new corona infections per week has almost doubled in the world in the past two months. The third wave of infections is also picking up speed in Germany, but further significant restrictions are foreseeable. In America, the vaccination program is making rapid progress despite the recent uncertainty surrounding the Johnson & Johnson vaccine, but the number of infections is also rising strongly here. After all, almost a quarter of the approximately 330 million inhabitants are fully vaccinated. In Germany, this has so far only been the case for a good 6 percent of the population.
Among the many companies that reported on their business in the past few days, the big American financial houses such as Bank of America, Citigroup, Goldman Sachs, JP Morgan or Wells Fargo certainly stand out. Thanks to the stock market boom and fewer worries about defaulting loans, they posted high profits. The largest investment company in the world, Blackrock, announced that it was managing more than $ 9 trillion in assets for the first time. The course reactions were mixed nonetheless.
Brilliant debut with question marks
The brilliant stock market debut of Coinbase, trading platform for crypto currencies such as Bitcoin, also caused a stir. The first trading price on Wall Street on Wednesday was more than 50 percent above the reference price of $ 250. The business holds a lot of imagination. But a market capitalization more than twice that of the major Nasdaq and Nyse exchanges combined calls for quite a few skeptics.
In addition, good news from the economy is not all positive, as it carries the risk of higher interest rates and inflation. However, many experts attribute the significant increase in retail sales in America in March, for example, to one-off effects from the Corona aid and therefore do not yet see the loose monetary policy at risk – also because the number of unemployed is still high. In this respect, many experts believe that the stock exchanges will continue to fly higher as the reporting season continues – despite the never-ending pandemic.