Because the DAX starts its second life as the DAX40 very badly. The leading index extended its minus in September and fell to almost 15,000 points. The reasons are very complex. The general election is just around the corner and could bring with it both a left-wing coalition and a lengthy negotiation phase. Neither scenario that the stock market likes. “Shareholders positioned themselves in the run-up to the general election, which has put a strain on the DAX in the past few days.” says Jürgen Molnar, capital market strategist at Robomarkets.
Then there is the development in China. Evergrande, one of the country’s largest real estate financiers, is on the verge of bankruptcy. The situation is very opaque. “The risk markets have been demanding high risk premiums for Chinese bonds for days in view of the situation around Evergrande,” says strategist Molnar. With this development, the DAX, as a China-dependent index, is particularly in the fire of investors. Incidentally, Evergrande is also hotly traded in Europe. On trading venues such as Gettex / Munich Stock Exchange, one sees high turnover for the share. However, this stock is only for hardcore gamers.
The medium-term fundamental outlook also suggest a rather rough market phase. The purchasing managers’ indices indicate “peak growth” in the USA. The peak of the economic recovery could be behind us in the short term. At the same time, US investors have hedged themselves in the past few weeks. “The VIX, the volatility barometer for the S & P500, rises to 25 in mid-September, the VDAX-New even to the annual high of just under 30. This indicates an increased nervousness among US investors,” said Molnar. From Feingold Research’s point of view, however, positive – the fear and greed in the USA is Extreme Fear. This situation is to be rated very positively.
Also exciting is the development of Bitcoin, which is not an alternative in nervous stock market phases, but is also sold at “Risk-Off”. If Bitcoin should fall back towards $ 40,000, the Vontobel tracker VX1BTC would be a good choice, for example. In our stock exchange service, we have used the past few weeks and built up hedges. As mentioned, we will continue to use these hedging gains in the coming days to collect some of the hedges and also use our cash holdings. The current correction is by no means surprising. In the USA in particular, the indices had risen without any correction in the past few months, which is now being consolidated somewhat.
Benjamin Feingold has been a stockbroker and long-time editor at Börse Online and the Financial Times Deutschland for more than 20 years. Together with Daniel Saurenz, he founded the investment portal Feingold Research in 2013, which publishes analyzes and investment ideas on stock market developments on a daily basis.
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