Investors cower in front of Virus-epidemic - defensive sectors preferred

The publication of the purchasing managers ' index for February was expected in the markets with the voltage. They were the first important indicator of the st

Investors cower in front of Virus-epidemic - defensive sectors preferred

The publication of the purchasing managers ' index for February was expected in the markets with the voltage. They were the first important indicator of the state of the economy after the outbreak of the Corona epidemic. In the U.S. economy, the Virus has left noticeable traces, particularly in the service sector, has darkened the mood noticeably. In contrast, the strong improvement in the purchasing managers ' index for the Manufacturing sector in Germany and the United Kingdom has provided for relief. Many producers had previously of delivery and sales problems in trade with China reported. With just 48 points, the German Index of the expansion has converged to the threshold of 50 points is noticeably displayed. Even if it is for an all-clear too early, the new data in connection with Reports of a decline in new infections in China, confident that the economic burden of the epidemic for Europe limited.

low interest rate environment: investors avoid cyclicals

The outbreak of the Corona epidemic and the low interest rate environment have led to US stock investors prefer to power this year, once again defensive sectors such as consumer goods and utilities, and Technology stocks with high market; cyclic or "Value"sectors were avoided. This has led to the evaluation of the difference between defensive and cyclical equities segments in the US market is now twice as high as at the peak of the IT Bubble in the late 1990s. First, experts, such as strategy-legend Marko Kolanovic of JP Morgan are raising the Alarm. A similar extreme positioning had led last September to a violent counter-movement from defensive to cyclical stocks. I expect that it may change under the index surface, depending on the mood of the market again and again to Favorites and I recommend, therefore, continue to be a Portfolio that includes both defensive as well as cyclical stocks.

Turkey: Central Bank lowers key interest rate

After two Turkish soldiers died in an airstrike in the Northern Syrian province of Idlib killed, tensions between Turkey and the Russian-backed Syrian government. In addition to the geopolitical risks, macro-economic factors have also been negatively affected, the Turkish Lira and the stock market. Despite a twelve percent increase in the inflation rate, the Central Bank lowered last week the benchmark interest rate.

Therefore, the Turkish Lira during the week depreciated against the Euro by 0.7 percent. The Istanbul stock exchange lost in Euro even almost four percent. Especially Turkish financial affected companies, they stand for a quarter of the stock market and fell by almost six percent. An entry-level option, I don't see, however, Because of the risk of a further escalation in Syria and a persistent Liraschwäche I have to restrain myself in the case of Turkish stock.

Russia: share with interesting dividend yields

The RTS Index grew 2019 in US dollars, more than 40 percent. Unlike, for example, in Germany, the rally was not at the expense of the assessment. The price-to-earnings ratio is currently 6,71 and is one of the lowest in emerging countries. With a dividend yield of 6.68 per cent of the market points in addition. It is one of the highest among the emerging countries and exceeds the rate of return on long-term Russian government bonds. Currently, global growth will be loads of worries because of the Coronavirus, as well as the sanction announcements by the U.S. against companies in the Oil and gas sector on the market. Overall, I'm expecting for this year a positive Performance is not expected to approach the course development in 2019. The current course could be the weakness of risk-tolerant investors may use for selective purchases.

What this week is important

will. In the course of the week | reporting season for the final quarter of 2019: This week's ASM, Bayer, BASF and Dell reports


  • Japan: markets remain in holiday due to the closed.
  • In China, the standing Committee of the National people's Congress decides whether or not the for the 5. March will be postponed a scheduled Meeting of the entire people's Congress.
  • In the United Kingdom, the Parliament returns from the recess.
  • the ifo business climate index for Germany in February. After a slowdown in January, the expectations for the next half-year could weigh on the mood of the company again.
  • Dallas Fed Index for the Manufacturing sector of the United States, the counterpart of the Richmond Fed, on Tuesday. The data could give a first impression whether and how the Coronavirus is from the value chain of the US-influenced industry.


  • US-Conference Board-consumer confidence in February. The expected increase would indicate a still-robust U.S. consumer and the Concerns about the negative impact of Coronavirus appease.
  • France's business climate in February, the confidence Index for the consumer, follows on Wednesday. Both indices are expected to remain at a high level, could have but slightly weakened.


  • EMU economic sentiment and business climate in February. Although the indices are likely to show again a good overall mood, driven by the industry is expected to see a slight decline.
  • US-new orders of durable goods. After a strong year-end Figures are likely to have fallen again in January.


  • February-labour market data for Germany. The registered unemployment is expected to remain stable at five percent.
  • development of consumer prices for the Eurozone, Italy, France and Germany in February. The development of inflation, increased in importance due to the strategic Review and possible realignment of the ECB.
  • Japanese retail sales and industrial production in January. Both data points could have year-on-year decline, and the burden on the economy of Japan due to the VAT increase, as well as the Coronavirus underline.
the number of the day: 80

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today you will Find on the right course.


Ulrich Stephan

chief investment strategist for Private and corporate customers

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Date Of Update: 24 February 2020, 13:00