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Bubbles everywhere

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12.11.2019 – Special Report. Celebrating the abyss: Greece is pleased with increased demand for its government bonds. Wall Street is holding its own at a record high. The warnings of crash prophets like Robert Shiller can no longer be ignored – he sees no escape from the financial Armageddon. Especially in the bond market a huge bubble is inflating.

Hellas is hip again

Hooray: As the Financial Times has just reported, for the first time since the 2008 financial crisis Athens has given up its status as the most risky sovereign borrower in the eurozone. To Italy. The yield on five-year Greek bonds was therefore over 60 percent at the beginning of 2012, most recently at less than 0.5 percent. So much optimism is surprising – what has actually changed in the Greek business model? In fact, the new hunger for risky government bonds is only the result of zero interest rates – investors are desperately looking for investment opportunities. Is the next bond bubble building up again in Europe? It looks that way.

Bubbles everywhere – no place to go

It’s no different in the United States. Nobel laureate Robert Shiller recently spoke with a drastic warning. At the end of October, the Yale professor told investors in Los Angeles: “There’s no place to go. You just have to ride it out.” And further he sees “bubbles everywhere”. The economist advised waiting, consuming savings and sitting out the crisis – flight and hiding pointless. And Shiller is not just anyone: the economist predicted the stock market crashes in 2000 (dot-com bubble) and 2007 (subprime crisis in the real estate market). His book “Narrative Economics” has just been published.

Grace period for US equities

After all, an economic crash on the stock market could still take a while, as Shiller expects an annual return of 4.4 percent over the next thirty years. Shortly before the apocalypse date in L.A., Shiller said in an interview with CNBC that a recession is still years away, which is due to the bullish trump effect in the market. And “Barrons” reported in August that Shiller sees no bubble in the US stock market – but certainly elsewhere. Like Bitcoin, Canadian real estate market, marijuana stocks.

It’s going to end badly

And the US real estate market is also in a bubble, added Shiller in LA. The whole thing is reminiscent of 2005, when San Francisco and Los Angeles were already showing signs of weakening. On the bond issue, he said, “this can’t keep going and it’s going to end badly.” So the thing would end badly.

Gigantic national debt

In fact, public debt in the US is heading towards the enormous $23 trillion mark by the beginning of the year (23 trillion in US English). As the blog Economica reported, 17 trillion are publicly traded treasuries and 6 trillion are loans within the state, i.e. for social security, pension funds or between central government, municipalities or states. Below in the chart the Federal Funds Rate (FFR), that is the interest rate for short-term debt.

Withdrawal of private investors

According to Economica, the enormous rise in public debt is an act of desperation. In a demographic sweep, the blog concludes that the poor population is growing worldwide in the wake of unrestrained overpopulation; and that even in the US, the only class that is also growing is that of owning pensioners – but that is traditionally risk-averse. This means that the Fed has no choice but to provide people with cheap loans for cars, houses and universities.
In line with this, UBS Global Wealth Management has just announced that the world’s rich are preparing for a turbulent year in 2020 and want to withdraw from the market. The reasons are the unresolved trade conflict between China and the US and the presidential election in the US. Already, 25 percent of the assets are in cash. More than 3,400 investors with at least 1 million dollars of free capital were surveyed. Four fifths of them believe in an increase in volatility and 55 percent think there will be a significant sell-off on the stock market before the end of 2020. 60 percent want to increase their cash holdings further.

Steroids from the Fed

Another crisis signal: the banks in America are still reluctant to lend money to each other in the short term. The New York Fed is continuing its infusion of dollars, once launched as an emergency operation in the Repurchasing (Repo) Market. Since the campaign began at the end of September, the Federal Reserve’s balance sheet has inflated by 200 billion dollars. The investment consultant Michael Pento of Pento Portfolio Strategies aptly called this Quantitative Easing (QE) “on steroids”.

NYFED Repo Ops

How to protect yourself from a crash

We think The Shiller warning sounds very much like a total deflationary crash like in 1929. In fact, the question is how the US and Europe will ever pay off their mountain of debt. Especially if investors don’t pump money into the real economy, which is actually the point behind the low interest rates. But when money houses instead gamble away, for example in the market for collateralised loan obligations or risky bonds issued by debt states. Panic on the stock market would be the logical consequence.
If you trade CFD or online stocks and follow Shiller in the doomsday scenario, then a short position on Wall Street indices and the DAX could be an option. Furthermore, in such a scenario it would be conceivable that gold and silver could benefit from this.
Small denominations of gold and silver would also be helpful – while people have lost faith in paper money several times in history, this has never been the case with precious metals. Then we have to sit out the reset of the hour zero. We are curious to see whether the doomsday scenario will occur and keep an eye on things for you.

Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

Candlestick Trading

ZEW Index pulls the DAX up

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12.11.2019 – Daily Report. Tailwind from the German economy: Germany’s leading index climbs ahead. Brokers also referred to the so far positive reporting season in the USA and Germany.

Profits in Frankfurt

The DAX rose on Tuesday morning. Most recently, the leading index held up 0.5 percent to 13,265 positions. The ZEW-Index from Mannheim was a source of joy, the economic expectations of the surveyed experts from the economy turned out much better than expected with – 2.1. All data can be found here: Market Mover

The consolidation of Wall Street at a high level also provided some impetus. Especially since the reporting season was well received in the USA and Germany. The most recent example of this was Infineon, which the stock market thanked with a full plus. Investors also hoped that the US would postpone punitive tariffs for the German auto industry. Otherwise, there was largely radio silence on the news front.

Nikkei in plus

Investors in China have been staying sideways lately. The Chinese CSI-300 closed unchanged at 3,904 points. In contrast, the Nikkei index rose by 0.8 percent to 23,520 points. The weaker yen provided a tailwind, and the USDJPY recently reached 109.164, a five-month low.

Mixed trend in New York

Wall Street, too, had shown no clear trend the previous evening. The Dow Jones achieved a minimal gain, but this was mainly due to price gains in the heavyweight Boeing share. The Dow recently closed 0.04 percent higher at 27,691 points. The closing record last Thursday was 27,774 points. The S&P 500 lost 0.2 percent to 3,087 positions, the Nasdaq 100 also slipped by 0.2 percent to 8,242 points.

Middle East powder keg

After the Israeli military action in the Gaza Strip and the rocket attacks of the Arabs on Israel, the oil market came into focus. Israel has switched off Baha Abu al-Ata, commander of the northern Gaza front of the Palestinian Islamic Jihad (PIJ), with a targeted military strike. The Israelis also killed Akram Al-Ajouri in Damascus, the PIJ liaison officer with the Iranian Al-Kuds Brigades in Syria. Around 50 missiles rained immediately on Israel, of which the Iron Dome defence system shot down almost two dozen. Israel justified the attacks with an imminent major offensive by the PIJ.
The always well-informed Debka website reported that Iran and its allies were currently discussing an attack on Israel. Which in turn would allow an Israeli air strike on Iran, perhaps with the support of the Saudis. If you are trading CFDs in the oil market, it is important that you keep an eye on the issue and keep market access open. The market still reacted calmly, WTI recently increased by 0.1 percent to 56.90 dollars, Brent also increased 0.1 percent to 62.27 dollars.

China faces the digital currency

Bitcoin initially hardly responded to a report from China and maintained a plus of 0.5 percent at 7,950 points. Jack Lee, Managing Partner of HCM Capital, told CNBC that Beijing has set the framework for a digital currency – Digital Currency Electronic Payment or DCEP. Lee is considered to be well connected because his investment company is supported by Foxconn Technology. With DCEP, the central bank is in a position to offer a crypto currency for commercial banks or retail traders such as Alipay or WeChat Pay. China could bring it to market within the next three months, the manager said at the Singapore FinTech Festival. And that probably means that the Western world will be focusing on regulation, which should cause considerable turbulence in the crypto market.

This is what the day brings

On Tuesday, there are no really market moving economic data on the calendar. Global trading focuses on news from the world of politics.

The Bernstein-Bank wishes successful trades!

Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

Morning Stock News

Global news are making investors nervous

By | News | No Comments

Gold   1454,98
(-0,05%)

EURUSD   1,1033
(+0,02%)

DJIA   27652
(– 0,03%)

OIL.WTI  57,04
(+0,30%)

DAX   13212,06
(+ 0,01%)

 

On Monday, there were no important economic news. An escalation of protests in Hong Kong has strongly impacted the world’s markets. But there was nothing new on the Brexit and on the US-China trade deal. In this contexts, investors are switching to more secure assets.

GBP/USD day chart

After the weekend, the crypto market lost about 2%, reaching a capitalization of about $243 billion. There’s currently no positive driver that could push crypto prices up. In the US, the authorities are ever more skeptical about digital currencies, calling them the key payment method for terrorists. In this situation, most investors treat their crypto solely as a speculative instrument.

GBP/USD

GBP grew quite a lot on Monday after Nigel Farage stated that he won’t contest Conservative-held seats in the December 12 election. This improves the Conservatives’ prospects to win a majority and complete the Brexit. At the closing of the day’s session, the pound was trading at 1.2860 – a 0.7% increase since the opening.

GOLD

Gold’s downward trajectory that began in September is still confusing traders, but the trend is likely to be temporary. Gold has already grown by 14% since the beginning of the year. There are still lots of unsolved issued – from the US-China trade deal to the overdue global economic recession. Moreover, the large amount of liquidity coming from the US and EU central banks will be allocated among all the markets, including gold. For this reason, demand remains high. The price can still go back to $1500 and above per ounce.

INDICES

Most markets were trading in the red on Monday. Investors were nervous about the protests in Hong Kong and about the lack of news in the US-China trade talks. The signals about the industrial slowdown in the euro zone added to the general negativity. Only good news and positive macroeconomic data can trigger a new price rally.

What’s next?

11.30 UK: unemployment benefit requests data for October
12.00 EU: ZEW Institute indicator of economic sentiment for November


Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

Daily Trading News

New skepticism on the stock exchange

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11.11.2019 – Daily Report. Wait and see: Investors in Frankfurt are taking it easy at the beginning of the week. US President Donald Trump does not want a customs deal at any price. And the unrest in Hong Kong is causing additional nervousness.

Frankfurt resets

Slight decline at the beginning of the week: On a day with little news, the German benchmark index initially crumbled moderately. The DAX fell by 0.3 percent to 13,187 points. The indicator thus closed last Thursday’s price gap of 13,227 points. However, there remains another open gap of 12,200 points. That could be a possible celebration for the bears…

Spain bonds under pressure

After the election in Spain, investors initially parted with Spanish bonds – after the election this weekend, another hanging game in parliament threatens. The yield on ten-year bonds climbed to a three-and-a-half month high of 0.418 percent, according to “Börse Online”. The risk premium over comparable federal government securities thus climbed to its highest level for around five weeks.

Worry lines in the global economy

A message from the Ifo institute also caused a frown. The Munich-based institute stated that the mood in the global economy was worse than it had been since the crisis year of 2009. The corresponding indicator slipped to minus 18.8 points in the fourth quarter. In the previous quarter, it had been 10.1 points. The Institute surveyed 1,230 experts from 117 countries.

Trump slows down hope for China

A little tailwind from China and the USA would be welcome. But here Trump cooled down hopes. He complained about the speed of trade talks with China. The talks went ahead, “way too slow for me”. He went on to say that China in particular was interested in an agreement. However, he limited: “If it’s not a great deal, I won’t make it”.

Power struggle for the customs deal

One important background for your trades: In the White House there is apparently a power struggle raging between a faction that absolutely wants a deal with China and another faction that makes no concessions at all. Screen your regular market updates for Peter Navarro (Falke) and Larry Kudlow (Taube; Director of the National Economic Council). Whenever you hear a request to speak from one side, the free real-time prices could react accordingly.
Peter Navarro, a White House consultant and director of the National Trade Council, told National Public Radio on Friday that if punitive tariffs were eliminated, the pressure on Beijing would be reduced. Contrary to what China recently announced, there is no agreement to eliminate the tariffs – that is the decision of the US President alone. And lo and behold, shortly thereafter Trump put the brakes on hopes. No wonder that the yuan fell from around 6.97 to 7.01 against the dollar again.

Nervousness in Asia

Investors in Asia were disappointed with the recent developments. The Nikkei 225 dropped by around 0.3 percent to 23,331 points after its recent twelve-month high. In China, the CSI-300 slipped by a whopping 1.8 percent to 3,903 points. Investors were also concerned about the unrest in Hong Kong. On Monday morning, another person was shot by a policeman who escalated violence on the streets. Demonstrators blocked the subway and some streets, the police used tear gas. There is speculation about an impending general strike. Trump warned Beijing weeks ago of military intervention in the former British crown colony and linked the matter to the customs dispute. The Hang Seng in Hong Kong closed with a sizable minus of 2.6 percent at 26,927 points.

New record high in S&P 500

Previously, Wall Street had presented itself calmly on Friday. The Dow Jones made up for its losses in recent trading hours and closed virtually unchanged at 27,681 points. The Nasdaq Composite advanced 0.5 percent to 8,475 positions. And the S&P 500 even gained 0.3 percent to 3,093 points, once again marking a record high.

This is what the day brings

There are no really important dates for Monday. The US bond market remains closed.
As always, you will find an overview of all economic data here: Market Mover

If you trade CFD or online stocks, you will otherwise have to read all the news from the Bloomberg news agency about trumps – customs disputes, impeachment, election chances, the economy – with a good portion of skepticism. The founder of the news agency, Michael Bloomberg, entered the election campaign on the Democratic side and was once a Republican. After all, the stock market is now potentially getting a business-friendly alternative.
The Bernstein Bank wishes you successful trades!

Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

Morning Stock News

Will there be growth after the correction?

By | News | No Comments

Gold   1463,21
(+0,30%)

EURUSD   1,1024
(+0,10%)

DJIA   27541,5
(– 0,35%)

OIL.WTI  56,72
(-1,17%)

DAX   13263,25
(+ 0,01%)

 

The US-China swing just won’t stop swinging. Though PRC representatives have already announced that Washington and Beijing have reached an agreement to phase out the tariffs gradually, Donald Trump later stated that he hasn’t yet made a decision and, in any case, won’t eliminate all the tariffs. Nevertheless, the two sides have reached an understanding and are now haggling for better terms for each.

GOLD day chart

A lack of global positive news on the crypto market is preventing Bitcoin from growing far above $9000. The market is changing, BTC is starting to become a hedging asset, and it’s quite possible that its price will follow that of gold.

EUR/USD

The week’s last trading day marked a new downturn for the euro. Bears aren’t too interested in macroeconomic data, since the pair’s exchange rate is more dependent on the strong US dollar. The key interest rate is higher in the States, which points to a stronger economy and provides the Federal Reserve with more room for manoeuvre. The as-yet-unresolved Brexit issue and the current economic slowdown don’t give the EUR/USD pair a chance to grow. The pressure is likely to persist all the way to 1.0900.

GOLD

In September, the China-US trade war spooked investors, bringing the price up to $1556. After the detente began, the price went back down to below $1500 per ounce. This value became a sort of a psychological threshold for investors and the closing price for many speculative positions. All the investors are waiting for the US and China to make their decisions. Any positive news about the trade talks will spur the market appetite for risky assets. Negative news, by contrast, will make investors doubt the future and put gold in a position for further growth.

INDICES

Friday’s correction was virtually inevitable. Traders took their profits after a period of growth that lasted the whole week. Macroeconomic data didn’t provide any reasons for a further increase in prices. Investors realized that they should reevaluate risky assets instead of mindlessly buying them. This week, the mood in the market will mostly depend on the progress in the negotiations between the US and China.

What’s next?

11.30 UK: data on annual GDP
15.30 UK: manufacturing data for 2019


Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

Trading desk

Time out after the rally

By | News | No Comments

08.11.2019 – Daily Report. New caution after the record hunt: After the new records on Wall Street, the stock market is now taking it easier again. On the one hand, many brokers are making profits. On the other hand, new doubts about the conclusion of a customs agreement between Beijing and Washington are emerging.

Frankfurt resigns

Shortly before the weekend, many stock market participants played it safe on the German stock exchange – the DAX recently recorded a loss of 0.2 percent to 13,259 points. Now, the price gap of 13,227 points, which was torn yesterday, has come to the fore again. Yesterday, thanks to the prospect of a breakthrough between China and the USA, the German benchmark index reached its highest level since the beginning of 2018 at 13,301.

German exports surprise

Meanwhile, surprisingly positive news from German foreign trade supported prices: In September, exports rose by 1.5 percent compared to the previous month, according to the Federal Statistical Office. The most recent increase was in November 2017. As always, you can find the overview here: Market Mover

New doubts about customs deal

A media report on the customs dispute caused skepticism on the stock market. The US futures market declined and the yuan fell slightly. In the White House, there is supposed to be some strong internal resistance against a lifting of the US punitive tariffs against China, which were originally planned for 15 December. This was reported by the news agency Reuters. It is quite possible that new punctured internals will arrive on the weekend, shaking stocks, bonds and foreign exchange strongly at the beginning of next week. So nothing is safe except volatility – which doesn’t scare you when you trade CFDs.

Mixed Tendency in Asia

Furthermore, economic data from China had occupied the stock market this morning. The foreign trade figures were not quite as bad as many analysts had expected. In October, exports fell by 0.9 percent, imports even slipped 6.4 percent compared to the same period last year. The Chinese CSI-300 fell by 0.5 percent to 3,973 points. The Nikkei in Tokyo closed 0.3 percent higher at 23,392 points – the fifth consecutive week of gains. In the course of trading, the Nikkei had reached its highest level in 13 months.

Record hunting in New York

On Thursday, hopes of a gradual reduction in the trade war tariffs imposed by the US and China had set new records. This was accompanied by solid data from the U.S. labor market, with the number of first weekly applications for unemployment benefits falling slightly more than expected.
The Dow Jones Industrial closed with a plus of 0.7 percent to 27,674 points. The S&P 500 also posted a new final high, closing 0.3 percent higher at 3,085 points. The Nasdaq 100 achieved a plus of 0.3 percent to 8,220 points. Around two and a half hours after the start of trading, all three indices had reached record highs. Meanwhile, US bonds suffered under the new optimism: ten-year bonds fell to their lowest level since the end of July – yields rose for all maturities.

Swiss stock exchange at all-time high

A look at the Alpine republic remains: here, too, the stock exchange recorded a new record high in trading yesterday at 10,356 points. In the end, the SMI recorded a gain of 0.1 percent at 10,329 points. On Friday morning, however, the leading index was again down 0.3 percent at 10,297 points.

This is what the day brings

The appointment calendar is only sparsely filled at the end of the week.
At 4pm the US wholesale inventories for September are reported.
At the same time, the consumer confidence of the University of Michigan is published.
The Bernstein Bank wishes you successful trades and a relaxing weekend!

Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

Morning Stock News

Investors’ optimism is pushing markets toward new highs

By | News | No Comments

Gold   1468,69
(+0,02%)

EURUSD   1,105
(+0,01%)

DJIA   27612
(– 0,21%)

OIL.WTI  56,93
(-0,23%)

DAX   13272,82
(+ 0,01%)

 

On Thursday, the US markets updated their all-time highs yet again. Investors are so pleased with how the US-China trade talks are going that they are ready to take new risks. The removal of trade limitations opens up new prospects for two of the world’s largest economies.

Dow Jones Industrial daily chart

The crypto market has been calm today. Bitcoin isn’t going to break through the resistance line. The price is channeled between the 100-day and 200-day moving averages. The low trading volume in the flat market is pointing to strong price movements in the near future.

EUR/USD

For the fourth day in a row, euro is under pressure from sellers. Yet another attempt to remain above 1.1170 failed. The continuation of the trade negotiations between China and the US can push the pair into the local minimum zone at 1.0900 and scrap all the successes of October.

GOLD

On Thursday, gold has lost some of its recent gains and was trading at $1465 per ounce. The detente between US and China is pressuring the “save haven” asset and pushing investors to switch to riskier assets. Most probably, the current price of gold already takes into account the likely trade deal. The only thing that can contain the fall are purchases by the leading central banks, which might grab onto the opportunity to increase their reserves while the price is good./p>

INDICES

While the risk of a global trade war is abating, Germany still can’t put its industry in order. However, even a small decline in economic data gives investors a strong buy signal. They believe in the bright future and keep buying DAX.

What’s next?

05.00 China: annual imports and exports
15.30 Canada: employment data for October
17.00 US: Michigan State University consumer confidence index


Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

 

Trading waves

Beijing launches a course rocket

By | News | No Comments

07.11.2019 – Daily Report. Finally China announces execution: The otherwise rather taciturn trade ministry in Beijing announces that customs duties on both sides are to be gradually dismantled – with which phase 1 can be signed. The breakthrough pushes US futures north. Which is why we can look forward to new records in floor trading. Once again the DAX climbs an annual summit.

US Futures and DAX pull up

The stock market in global trading celebrated the news from Beijing: the contract on the Dow Jones climbed by 135 points or half a percent, the future on the S&P 500 by 0.4 percent. The DAX climbed to 13,301 points, with the leading German index recently rising by 0.8 percent to 13,286 points. This means that the all-time high of 13,596 points is no longer too far away.

German industry weakens

The fact that German industry cut back production in September receded into the background. According to a report by the Federal Statistical Office, total production was 0.6 percent below the previous month’s level. Compared to the same month last year, production fell by a harsh 4.3 percent. All data can be found here: Market Mover

China announces breakthrough

The topic of the day was the customs dispute. According to the Chinese government, Washington and Beijing have agreed on a gradual reduction of the punitive tariffs imposed on each other. This agreement will be part of a first partial agreement, Gao Feng, spokesman of the Ministry of Commerce. The extent of the tariff reduction depends on the concrete content of the agreement, Gao added. The proportions of the cap would have to be the same on both sides. The agreement is to be signed within the next few weeks.

Oil prices also rising

The happy customer also pushed the oil market – the conclusion of a trade deal would increase the chances of the global economy picking up. WTI climbed 1.4 percent to 57.11 dollars, and Brent also rose 1.4 percent to 62.62 dollars. A factlet that speaks for an oil glut receded into the background. In September this year, for the first time in three decades, the USA exported more crude oil than it imported, as Oilprice.com reported. This is the first oil surplus since 1978.

Asia has not yet reacted

Customs news came too late for Asian trade. The Nikkei gained 0.1 percent to 23,330 points in Tokyo even before the announcement. The CSI-300 climbed 0.2 percent to 3,992 points. However, the renminbi strengthened against the dollar to 6.9879 points.
What a back and forth. Only yesterday Reuters had cooled the anticipation. According to this, a meeting between Presidents Donald Trump and Xi Jinping could be postponed until December, which would delay the conclusion of an interim deal. White House spokesman Judd Deere said there had been progress on the text of the Phase 1 agreement, which would be announced as soon as there was agreement on where to sign it.

Wait and see in New York

Accordingly, the Wall Street stock market had held back on Wednesday. The Dow Jones Industrial closed unchanged at 27,493 points. The S&P 500 recorded a minimal gain of 0.1 percent to 3,077 positions. The Nasdaq 100 lost 0.2 percent to 8,196 points.
The buying mood had also cooled down with the head of the Chicago Fed, Charles Evans. In an interview with Yahoo Finance, he said that the US economy probably did not need another interest rate hike, as it was proving to be quite robust.

This is what the day brings

The Pound Sterling will come into focus on Thursday as the Bank of England’s interest rate decision is scheduled for 1pm.
At 2:30pm the weekly first applications for unemployment assistance follow in the USA.
The Bernstein Bank wishes successful trades!

Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

Morning Stock News

Investors are waiting for world leaders to decide

By | News | No Comments

Gold   1491,07
(+0,04%)

EURUSD   1,1061
(-0,05%)

DJIA   27409
(– 0,07%)

OIL.WTI  56,32
(-0,07%)

DAX   13171,67
(+ 0,01%)

 

On Wednesday, the stock market correction continued. Investors are still analysing the possible outcomes of the US-China trade talks, with a deal expected soon. As positive business activity data is reported in the US, a further relaxation of the monetary policy is becoming less probable. The markets are waiting for something new to spur them on.

USD index daily chart

The things are looking better in the cryptocurrency market. Starting from January 1, 2020, China will relinquish its harsh policy against crypto mining. The global market cap has grown by 2.8% to $253 billion. In the absence of important crypto news, traders are mostly busy speculating with their assets.

EUR/USD

Tuesday lacked significant news and economic reports, and euro was trading at 1.1070. Investors are disconcerted by the latest statement by Christine Lagarde, who could follow in the steps of Mario Draghi and lower the interest rate to a negative value. The correction that began two days ago has been expected for a while. Now, everything will depend on the European economical data and on the news of the US-China trade talks.

GOLD

Gold is trading within a narrow channel. The price now mostly depends on the outcome of the China-US negotiations. If a deal is indeed signed soon, the trade war will end, and the demand for risky assets will grow. Gold is a “safe haven” asset, so its price may undergo a correction.

INDICES

Global markets are poised in expectation. A lack of global news or economical data gives investors a chance to take a breath and consider their options. European exchanges are waiting for a decision on Brexit; those in the US are expecting a trade deal with China. Many investors will likely choose to take profit and wait for more news before they take their next step.

What’s next?

11.00 ECB monthly report
14.00 Bank of England’s inflation report
14.00 UK interest rate update


Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

 

Stick chart

Investors wait and see

By | News | No Comments

06.11.2019 – Daily Report. But now it’s really time for a breather: After the close final records of Dow Jones and Nasdaq Composite, the DAX is now stagnating. Nevertheless, it is enough for a new high for the year. The same applies to the Nikkei. Once again, there is a lack of market-moving news. The stock exchange is waiting for execution of the China-USA customs deal.

Modest courage in Frankfurt

The German leading index was moderately optimistic in early Wednesday’s trading. The DAX crawled to a new high for the year of 13,181 and recently remained unchanged at 13.150 points. However, the free real-time prices on the trading platform hardly flashed at all. In addition to the reporting season, brokers in Frankfurt focused their attention on German economic data. However, the figures on sentiment among German purchasing managers and European retail sales did not really move prices. All data can be found here: Here is the overview: Market Mover

When’s the customs deal coming?

The number one issue in global trade remained the trade dispute between China and the USA. It is still unclear when or where US President Donald Trump will sign the agreement with President Xi Jinping. The market also hopes to cancel the new US tariffs announced on 15 December. Trump said both sides were looking for a location to fix the partial agreement, and Reuters said the signing could take place this month.

Beijing strengthens the Yuan

Meanwhile, China sent out a sign of good will on the currency market. The People’s Bank of China set the daily midpoint fix at 7.0080 against the dollar. According to CNBC, this was the highest price since August 8. The onshore yuan may float in a band of 2 percent above the fixing. Washington is likely to watch the move benevolently: The USA had accused China of devaluing the yuan in order to make exports cheaper – and thus circumvent the punitive tariffs. Only yesterday did the yuan cross the red line again at 7.

Mixed tendency in Asia

The Asian stock markets reacted differently to the latest developments in the morning. The Nikkei 225 reached an annual high in early trading and closed 0.2 percent higher at 23,304 points. The weaker yen supported prices. Meanwhile, the Chinese CSI-300 with the most important red chips dropped 0.5 percent to 3,985 points in the morning.

New records set in New York

Investors in New York were also initially optimistic the night before. Both the Dow Jones Industrial and the Nasdaq 100 and Nasdaq Composite reached new highs on Tuesday.
The Dow rose to 27,560 points, and entered the closing bell with a new closing record of 0.1 percent at 27,493 points. The Nasdaq Composite squeezed out a minimal gain of 1.48 points and closed at around 8,435 points – the second final high in a row. The Nasdaq 100 had climbed to 8,229 points in the course of trading, but had to end trading 0.01 percent down at 8,210 points. The S&P 500 crumbled by 0.1 percent to 3,075 points. In addition to the optimism regarding the customs dispute, the data from the US service sector delighted the stock market.

Anticipation of US bonds

This also applies to treasuries: the yield of 10-year-olds rose by six basis points to 1.787 per cent, the largest increase in three weeks. The 2-year note gained 3.2 points to 1.594 percent. And the 30-year bond gained 6.2 basis points to 2.274 percent – again the highest daily gain in three weeks.

Repocalypse puzzle solved

Meanwhile an interesting news about Credit Crunch has arrived from the end of September. According to a Financial Times report, the culprit was JPMorgan. The bank went out of cash and invested massively in long-dated US bonds – a total of 130 billion dollars is said to have flowed out. The bond portfolio increased by 50 percent, while loans were reduced. The reason: loans granted are considered riskier than government bonds. And that’s why the G-SIB surcharge is rising, so JPMorgan has to hold back more cash reserves (G-SIB: Global Systemically Important Bank). But JPMorgan in particular has very little cash leeway because of dividends and share buybacks. We are curious to see whether this really was the sole reason for the freeze in the interbank market.

This is what the day brings

The view remains on a rather thinly filled daily calendar.
US productivity in the third quarter is due at 2:30pm.
At 4:30pm the weekly crude oil inventory data is reported to the state Energy Information Administration.
The Bernstein Bank wishes you successful trades!

Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.