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FINANCE

Why German stocks just hit a record high

Germany's main stock index reached a record high on Monday, buoyed by a pandemic recovery package agreed in the US and Britain's Brexit deal with the EU.

Why German stocks just hit a record high
The DAX index in Frankfurt on Monday as it jumped to a record high. Photo: DPA

Having been closed since December 23rd, the blue-chip DAX index bounced 1.7 percent, reaching 13,819 points at the open, topping the previous high set in February before the coronavirus pandemic forced Europe into lockdown.

The index has now pared some of its gains to 13,791 points, a rise of 1.5 percent.

The jump came after US President Donald Trump signed a $900 billion (€735 billion) stimulus bill late Sunday, averting a government shutdown and removing considerable uncertainty for the world's largest economy.

The US leader had previously refused to sign the relief package, arguing that it included wasteful spending.

On December 24th, Britain and the European Union agreed a post-Brexit dealthat ended the potentially destructive possibility of its disorderly exit from the bloc.

The Brexit deal and the US aid package were pushing the DAX to “a new high”, Jochen Stanzl, an analyst at CMC Markets, said.

The market is “breathing a sigh of relief” after the Brexit deal, independent analyst Timo Emden added.

Germany began rolling out its first Covid-19 vaccinations on Sunday, but some delays were reported and production capacity remains limited.

READ ALSO: First doses of Pfizer's Covid-19 vaccine arrive in German regions

“For the markets, it remains crucial to get Covid-19 under control as soon as possible,” Emden said.

The DAX's previous high was 13,795 points in February, but it plunged to 8,255 points in March as the pandemic shutdowns battered Europe's economy.

Markets recovered as restrictions on the economy were lifted in the summer and after central banks pumped billions in monetary stimulus into the economy, including €1.85 trillion ($2.3 trillion) by the European Central Bank.

Member comments

  1. Well that’s just great for the bankers, politicians & their scumbag mates,but this does nothing for the blue-collar workers. Wall Street is no real reflection of main street.

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CULTURE

‘People liked the silence’: How Berlin’s club scene is struggling after lockdowns

Berlin's clubs are suffering from staff shortages, a lack of guests... and neighbours who've grown used to the silence, representatives for the scene say.

'People liked the silence': How Berlin's club scene is struggling after lockdowns

Some operators from Berlin’s club scene are bracing themselves for a difficult autumn. For months now, people have been allowed to dance again and life has returned to normal in the dark corners of Berlin’s famous nightlife scene.

But the clubs have far from recovered from the pandemic. They face staff shortages, rising prices and the prospect of a return to Covid restrictions in the autumn.

“We go into the autumn with huge fear, because the omens are totally unfavorable,” said association head Pamela Schobeß.

Spring and summer went anything but smoothly, she said. “There has been an oversupply of events. People aren’t going out as much, and some are still afraid to move around indoors.”

Money is also an issue. “A lot of people are afraid of rising energy prices.”

The industry lost workers during the pandemic and it’s hard to convince them to come back with the outlook for the autumn looking so gloomy, Schobeß says.

Her colleague Robin Schellenberg tells a similar story. People have switched to various other jobs and would even rather work on a supermarket checkout, which may have been considered less sexy in the past. Now, he says, some have learned to love not having to work nights.

READ ALSO: 

Schellenberg runs the Klunkerkranich, a small club on a parking garage deck in Neukölln. Because a number of things have become more expensive, they have also had to increase their admission prices.

His impression is that people are going out less often and are deciding more spontaneously. In addition, people in the neighborhood are now more sensitive to noise. “Many people found the silence very enticing,” he said.

Some in the industry wonder what will happen next. Will club admission have to become much more expensive? Will that exclude people who can no longer afford it? And what happens if Covid infection numbers rise sharply?

If masks become mandatory indoors in October, Schobeß believes that would be bad for the clubs. “Even if we don’t get shut down by the state, we’ll actually have to close down independently ourselves,” she reckons.

Masks take all the joy out of the experience, she says. People have drinks in their hands and are “jumping around and dancing” and then security guards have to tell them “please put your mask on.”

The federal government is considering whether states should be able to make masks mandatory indoors starting in October. Exceptions should be possible, such as at cultural and sporting events, for people who have been tested, recently vaccinated and recently recovered.

In the event that Covid numbers soar, the states could then be allowed to tighten the rules and eliminate all exemptions.

READ ALSO: German court declares techno to be music

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