Markets Update Thursday 12/11/2020 – Realization

Frankfurt – 12/11/2020

Realization

More and more investors are becoming increasingly aware that there is still a long way to go before the corona crisis is overcome, despite the prospect of a vaccine. As a result, the pressure on the stock markets has increased and many global indices fell today.

But it is not only the concerns about Covid and the numerous economic and social consequences that take the wind out of investors’ sails again. Also, the presidential drama in the USA, as well as Brexit, are still risk factors that should not be underestimated.

Investors also continue focussing on the reporting season. Also, today again, numerous enterprises opened their books. 

US Markets at a glance

The US stock markets posted losses across the board today. The euphoria about confident study data on a possible vaccine against the coronavirus was no longer much supportive to the markets. Investors thus realise that it will still be a long way until social and economic life are back to normal.

At the start of US trading, the Dow Jones Industrial already showed a decline of 0.56 per cent to 29,231.91 digits, but the losses increased over intraday. The leading US index ended 1.08 per cent lower at 29,079.12 points. The NASDAQ Composite started off in the plus zone, but was also unable to escape the downward pull in trading and closed with a minus of 0.65 per cent at 11,709.59 units.

Far East Markets at a glance

Asia’s stock markets again showed an uneven trend. The Japanese leading index Nikkei 225 climbed by a total of 0.68 per cent to 25,520.88 points by the end of trading, while the Shanghai Composite Index on the Chinese mainland lost 0.11 per cent to 3,338.68 points. Hong Kong’s Hang Seng 50 was ultimately 0.22 per cent lower at 26,169.38 index points.

Asia’s stock markets were dominated by a mixture of ebbing vaccine euphoria and profit-taking. Some markets still started off with profits, but these crumbled during the day. There was talk in the market that a wait-and-see attitude would be adopted, as it could take some time before the vaccine was approved and could be used worldwide. 

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European Markets at a glance

The European stock markets went down on Thursday. The EuroSTOXX 50 moved deep into the red falling by 1.13 per cent to 3,428.20 points. 

The German stock market was also significantly weaker on Thursday. The Dax 30 index fell 1.24 per cent to 13,052.95 points, while the TecDAX slipped a marginal 0.02 per cent and closed the trading day at 3,027.61 points.

After the vaccine hopes of the past few days, disillusionment became increasingly widespread on the European stock markets. 

Meanwhile, investors turned their attention to a flood of corporate figures for the past quarter. Although many companies were able to make up some of the losses from the spring in the third quarter, the markets realise that consequences of the corona crisis are likely to continue to be felt for some time.

Forex, gold, oil and crypto

Hopes for an effective corona vaccination continue to dominate the foreign exchange market. Therefore, the US dollar could not make up ground today, although the US unemployment figures surprised quite positively. The Euro gained slightly in the Forex market and is trading at 1.1803 US dollars at the end of the day.

Oil prices gave up some of their gains on Thursday after surprisingly higher US crude oil inventories. North Sea Brent gave up 25 cents to 44.07 US dollars per barrel. WTI light oil, on the other hand, was able to gain 35 cents to 41.80 US dollars.

After the recent sell-off, gold was in demand again today, and the price for the troy ounce of the precious metal increased by more than 10 US dollars to $1,876. 

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Bitcoin continued its rally mode and left the $16,000 mark behind. Intraday, the best-known cryptocurrency gained 2.2 per cent to $16,200, while Ethereum, XRP and co remained almost unchanged at $460 and $0.2550 respectively. 

Corporate and world news

Economic data

The number of new applications for unemployment assistance in the USA has continued to decline but remains at a high level. Last week, 709,000 people applied for unemployment benefits, as the Department of Labor announced in Washington on Thursday. Analysts had expected 731,000 initial applications. 

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Inflation data for October were also published in the USA. The price pressure has eased somewhat: Consumer prices in October were only 1.2 per cent higher than in the same month of the previous year, in September it was still 1.4 per cent.

Tencent with new profit jump

The Chinese Internet giant Tencent posted a jump in profits in the past quarter, driven by video games and advertising business. The net result jumped 89 per cent to 38.5 billion yuan (4.2 billion US dollars), exceeding analysts’ estimates of 30.8 billion yuan, Tencent reported. Sales increased by 29 per cent to 125.4 billion yuan. 

SFC signs exclusive agreement with Toyota

Bavarian fuel cell specialist SFC Energy has entered into an exclusive partnership with Toyota’s distribution company for the Japanese market. The agreement makes Toyota Tsusho the exclusive partner for marketing and distribution of SFC hydrogen and direct methanol fuel cells for industrial and commercial applications in Japan. “Japan has always been one of the world’s leading markets for fuel cells. With its renewed commitment to hydrogen as the basis for a low-carbon society we expect further strong growth in Japan”, said SFC CEO Peter Podesser.

Emirates flies in $3.4 billion loss

After losing billions of dollarsduring the ongoing crisis, the Arab airline Emirates is relying on state aid. 

Between April and September, it flew in a loss of 3.4 billion dollars, the airline from Dubai announced on Thursday. It was the first half-year loss in more than 30 years. Passenger numbers plummeted by 95 per cent to 1.5 million, while sales fell by 75 per cent to 3.2 billion US dollars. The government in Dubai will continue to support the airline, said Emirates Chairman Sheikh Ahmed bin Saeed al-Maktoum. He is also a member of the ruling family and, in addition to his role at Emirates, also holds high-ranking government positions. In the first half of fiscal 2020/21, Emirates has already received two billion dollars in government aid from Dubai.

The world’s largest operator of the Airbus A380 wide-body aircraft is particularly hard hit by the pandemic because it only operates international flights. According to insiders, thousands of pilots and flight attendants lost their jobs. The number of employees in the Group, which in addition to the airline also includes travel agencies and aircraft handlers, fell by 24 per cent to 81,334 between April and September. The Emirates Group did not disclose how many of these are employees of the airline.

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