Helaba and DZ Bank trust the Dax with 14,000 points

Because the state is supporting the economy in the Corona crisis like never before, Helaba’s chief economist Gertrud Traud speaks of a nanny. Government support drives stock prices but weakens a known currency.

In the evening, visitors stand at a height of around 198 meters on the viewing terrace of the Main Tower, which also houses the Helaba.

Dhe first major banks are venturing out of cover with their capital market outlook for the new year despite great uncertainty about the progress of the corona pandemic. The Landesbank Hessen-Thüringen (Helaba), the central bank of the Sparkassen, and the DZ Bank, the central bank of the VR-Banken, both expect the German share index Dax to rise from the current 13,100 to 14,000 points in the course of 2021. That would be an increase of 7 percent and a new record.

Gertrud Traud, Helaba’s chief economist, makes different assumptions for her forecast, develops three scenarios from them and regularly comes up with witty names for them. Sometimes it went to the fairground, where the investors drove in the main scenario carousel; Last year it went to the theater, and Traud predicted a “melodrama” as the main performance. For 2021, she thinks it would be more appropriate not to choose a location as a leitmotif, but a person.

Helaba has therefore named its main scenario “Nanny” as a symbol for the state that is setting up new rules in the Corona crisis and as a way out of the recession, bans on contact and the obligation to wear a mask, but also takes a lot of aid money into hand so that the “child is back comes to strength “. The structure of the European monetary union was changed. “We are on the way to the transfer union in the EU,” said Traud on Tuesday in a conference call with a critical undertone.

National debt weaken the dollar

The economist admitted, however, that the capital markets welcomed the EUR 900 billion EU package of reconstruction funds and short-time work assistance. “The money welds the euro zone together.” A negative side effect of the Corona aid is that in the United States in particular, the national debt “goes through the roof” with almost 150 percent of annual economic output (GDP). The euro exchange rate will therefore appreciate against the dollar from 1.18 to 1.25.

China is simply the winner of the crisis. Container throughput there is currently 15 percent higher than a year ago. “It is buzzing,” said Traud. In Germany, too, the mood in industry – unlike in the service sector, which was partially hit by the second lockdown – is “extremely good”. Therefore, she does not expect a GDP decline in the fourth quarter, but only a pause in the upswing, which will solidify in 2021. German GDP will grow by 5 percent in the coming year and will return to pre-crisis levels in the third quarter of 2021.

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To the detailed view

In addition to the central banks, the commercial banks – unlike after the financial crisis – would also provide a monetary impetus through more lending in addition to state aid. Traud expects the inflation rate to climb from the current 0 to minus 1 percent towards 2 percent. The Dax will benefit from the support measures of the states and the central banks. DZ Bank sees it similarly. “After recessions, German companies have generally recovered quickly. Your profits will be back where they were before the crisis by 2023 at the latest, ”says Christian Kahler, who heads the equity strategy of the cooperative central bank.

Even if Traud assumes a stronger economic recovery for Germany in 2021 than DZ Bank with 3 percent in her main scenario “Nanny” with a 70 percent probability of occurrence with 5 percent GDP growth, Helaba believes that the risks that things will turn out to be worse are bigger than it gets better. In their “poltergeist” crisis scenario (probability of occurrence 20 percent), the pandemic and uncertainty continue to spread, the economy is falling back into recession, the Dax is slipping towards 10,000 points, and the crisis currency gold rises towards USD 3,000 instead of USD 2,000 in the main scenario per troy ounce. In the positive surprise scenario “Avatar” (probability of occurrence 10 percent), the aid funds from the EU actually serve to accelerate technical progress. Then, according to Traud’s forecast, the Dax could even rise to 16,000 points in 2021.