04.04.2019 – Daily report. Short descent after the high-altitude flight: The DAX has turned a little to the south in the morning session on Thursday. After the new annual high of the previous day, unpleasant news from the German economy hung like a stone on the leading index. Perhaps news about the hoped-for deal in the Chinese-American customs dispute will provide new momentum.
DAX commutes over 11,900
The DAX certainly deserves a breather: Germany’s leading index has just reached its highest level since the beginning of October at 11,961 points. Most recently, however, the DAX still held above the 11,900 mark with a minimal loss. A Financial Times report that Italian Unicredit was preparing a takeover bid worth billions for Commerzbank causing a sensation. The financial group would be ready should the merger negotiations between Commerzbank and Deutsche Bank fail.
Decline in orders in the Industry sector
Unexpectedly bad news arrived from ther German industry: In February, it had to accept the sharpest drop in orders for over two years. New business shrank by 4.2 percent compared to the previous month, mainly due to weak demand from abroad, according to the Federal Ministry of Economics. Orders had already fallen by 2.1 percent in January.
Customs dispute over and over again
A buying mood on the stock market could again be fuelled by concrete signals of an agreement in the customs dispute between China and the USA. A meeting between US President Donald Trump and Chinese Deputy Prime Minister Liu He is scheduled for Thursday. The meeting was scheduled for 16:30 local time at the White House.
Yesterday evening, the news that Trump’s economic advisor Larry Kudlow had demonstrated confidence in a solution to the trade dispute brought joy. According to CNBC, he said China had given in to intellectual property theft, forced technology transfer, and cyber security on the top issues. The Financial Times had previously reported that 90 percent of a deal was in dry cloths.
Accordingly, investors in China on Thursday took action: the CSI 300 gained 0.5 percent to 4,042 points. In Japan, brokers were more cautious, and the Nikkei closed unchanged at 21,719 points.
Wall Street slightly up
In New York on Wednesday, the stock market had stocked up on shares in view of the news about the China deal. The Dow Jones Industrial rose by 0.2 percent to 26,218 points. The S&P 500 also gained around 0.2 percent to 2873 points. And the Nasdaq 100 even rose by 0.6 percent to 7545 points.
And this despite the fact that US economic data disappointed: Employment in the private sector, for example, rose surprisingly weakly in March. In the service sector, sentiment had deteriorated more than expected. All economic data can be found here: Market Mover
Here are the events of the day
Now we are eagerly awaiting hopefully soon arriving details of the Chinese-American customs agreement.
Beforehand, the European Central Bank will publish the monetary policy meeting from March 7th at 1:30 pm.
At 2:30 p.m., the brokers are looking anxiously at the US futures, because then the first applications for unemployment benefits will be received.
It will be interesting for friends of the Canadian dollar at 4:00pm: the Ivey Purchasing Managers’ Index for March will then run across the screens.
Bernstein Bank wishes you a very successful day with your trades!
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