Good morning dear readers,
the number of Corona cases in Germany rises rapidly. Authorities reported 21 more infected people yesterday. In North Rhine-Westphalia alone there are around 1000 people in domestic quarantine, Interior Minister Horst Seehofer said yesterday that the situation had “worsened significantly”. From the federal government’s point of view, various measures are conceivable to prevent chains of infection: from the Cancellation of major events such as the international tourism fair ITB to the closure of Cities or border closures, The Grand Coalition switched from observation to action mode.
Because the new virus is also used for Burden on the domestic economy could degenerate, the federal government is examining various instruments with which companies particularly affected can be helped. It is still unclear how aid package could look concrete. But the federal government knows about them signaling effect of his considerations. After all, business is, ex-chancellor Ludwig Erhard knew, 50 percent psychology.
The problem is: against sick employees or production losses no classic stimulus program helps. The state cannot replace goods that are not produced, they are simply missing. Turnover and profits shrink, and layoffs threaten in an emergency. A difficult one to break through vicious circle,
The growing nervousness is particularly evident in the stock market, The German stock index Dax closed yesterday for the sixth day in a row. The loss was more than 400 points, Compared to the record high of 13,795 points in mid-February, the Dax now lost more than ten percent. Also at the Wall Street the course decline continues. The Corona virus has the markets under control.
The question of all questions that concern investors worldwide has the Handelsblatt on the topic of the current cover story made: Crash or correction? Brexit and the trade conflict between the United States and China have that world economy already weakened. And the central banks have little scope for monetary policy stimulus to calm the markets. The risk of a serious crisis is not small. Required reading for everyone who wants to save their portfolio.
My colleague Jens Münchrath managed to interview Robert Shiller, Nobel Laureate in Economics, about the corona crisis. The US economist is not just anyone, Shiller has burst Internet bubble shortly after the turn of the millennium and the Real estate prices crash predicted in 2007. His thesis on the corona crisis: “There is a threat downward spiral, The virus could start a cascade of events that feel like a second financial crisis. ”
Presented in a good mood Werner Baumann yesterday the results of the Bavarianfootprint, “Bayer AG has never achieved a higher profit. We have delivered, ”said the group boss. In fact, adjusted profit grew by almost 30 percent 11.5 billion euros, Baumann can also use the money well. An extrajudicial comparison with the more than 48,000 glyphosate plaintiffs Bayer can easily cost several billion euros. The Monsanto acquisition remains a costly investment for the chemical company.
Thyssen-Krupp has sold its elevator division to financial investors. The sales value adds up 17.2 billion euros, CEO wants with the billions Martina Merz reduce the debt burden, secure pension obligations and finance investments. With the emergency sale, Thyssen-Krupp only has that grossest money worries solved, The shrunken group still has to provide an answer to the future viability of the future business model.
And then there is Yngve Slyngstad, The boss of the Norwegian sovereign wealth fund has every reason to be happy. The fund, which manages income from the Norwegian oil and gas industry to fund the country’s social spending for the next generations, generated $ 180 billion last year. That corresponds to a return of about 20 percent, With such numbers you can become a popular hero in Norway.
I wish you a relaxing weekend. Stay healthy!
editor in chief
Here you can subscribe to the morning briefing.