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19/10/2018Price losses pile up, companies are weakening, investors are shivering - the perfect stock market storm
Christoph Rottwilm
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Stock traders in Frankfurt: The mood on the stock market has become increasingly gloomy as the year progresses.
The nervousness is increasing: Since the beginning of the year, the Dax has already lost more than 10 percent. Many public companies are currently disappointing with their quarterly results - and the reporting season has just begun.
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Overview: stocks to eat
On the stock market, it is currently possible to observe what happens when bad news hits an already nervous mood: heavy price losses.
For years, the stock market has gone up more or less without major interruptions. Since the beginning of the year, however, the picture has slowly but surely changed: The German leading index Dax stock market chart show reached at more than 13,400 points, an all-time high - and has been weakening ever since.
There are plenty of reasons for uncertainty among investors: the increasingly rigid monetary policy of the central banks, the trade dispute between the US and China and the EU, even the sluggish Brexit negotiations and the internal European conflict over Italian budget policy are contributing to the gloomy mood on the stock market ,
No good conditions for the listed companies to present their investors with bad news from their own company. But that's exactly what many corporate group leaders have to do these days. For months, a slowdown in the overall economy has been announced. Now the companies are showing what that means for them in concrete terms: declines in sales, loss of profits - and, above all, gloomy prospects for the future.
On Friday, it was initially the French tire manufacturer Michelin stock market chart show that caused even on the local stock market once more for price losses. Michelin announced a pessimistic business outlook, slipping its own shares on the Paris Stock Exchange by up to 7.5 percent. In Germany, especially the papers of the competitor Continental were pulled into negative territory; their losses were at times more than 4 percent.
Later on Friday, Daimler also once again dropped its expectations, after which the shares of the Stuttgart-based carmaker collapsed again massively.
Such and worse stock market crashes of large, often Dax-listed corporations are currently happening on a daily basis in the daily rhythm:
- Thursday of this week: HeidelbergCement stock market chart show and SAP stock market chart show plunge by 10 and 7 percent.
- Wednesday just before: With Fresenius stock market chart showing and Fresenius Medical Care stock market chart showing, it is down 12 and 14 percent even more.
- In the previous week: With Wirecard stock market chart show as well as again Continental stock exchange chart show two further Dax values also suffer double-digit price losses.
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No wonder then that the Dax seems to have lost his grip. Since the beginning of the year, the index is now in the loss zone with more than 10 percent, which is currently officially a course correction takes place on the stock market.
Many investment professionals may continue to cling to their optimism. For them, the share prices - at least public statements - usually know anyway only two directions: "up" and "soon up again".
@Christoph RottwilmHowever, reasonable investors should recognize that the uncertainty of stockbrokers is likely to change little for the time being, and that in the light of the economic slowdown for the time being continue to expect bad company news. Finally, the current reporting season, in which the public companies publish their third-quarter results, has just begun.
So it's a good time to face reality, where stock prices also know two directions: up but down as well.
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