19.07.2019 – Daily report. There you go. The head of the New York Fed spoke plainly about low interest rates. And global trade is applauding. The DAX also wants to go up. Even if only moderately.
New Yorker Fed delights Frankfurt
Who would have thought: a Federal Reserve central banker doesn’t mince his words. And the stock market is delighted. The head of the New York Fed, John Williams, said yesterday, among other things: “First, take swift action when faced with adverse economic conditions. Second, keep interest rates lower for longer.” So: act quickly if a crisis is looming. Then lower interest rates for a longer period. Fuel for the stock market. Applause, applause. The DAX rose to 12,340 points on Friday morning before crumbling again. Most recently, it held up 0.3 percent. A brief note on the subject of chart analysis: The German benchmark index closed yesterday at exactly the 50-day line and has now rebounded upwards again.
Asia is pleased about cheap money
Williams’ words echoed in Asia, too. Even though a Fed spokesman tried to relativize them as academic and theoretical. In addition, inflation data from Japan in the morning helped investors to regain momentum. The small price increase in the core rate could lead the Bank of Japan to further easing. Even more cheap money everywhere. And the Nikkei gained 2 percent to 21,467 points. The CSI-300 climbed 1.1 percent to 3,808 points.
Bad awakening for Beijing
Meanwhile, one news item made the round, which should force Beijing to provide additional economic support and cause bad stomach pains in German editorial offices: Donald Trump is apparently on the winning track in the trade dispute with China. According to “Nikkei”, more than 50 international companies are currently withdrawing their production from China to Southeast Asia. These include Apple, Nintendo, Dell and HP. Even the Chinese electronics group TCL is considering going to Vietnam. And the Chinese tire manufacturer Sailun Tire will soon be producing in Thailand. Ergo: CFD traders should perhaps take a closer look at the stock exchanges in India, Vietnam and Thailand.
Is that all?
Oh yes, Trump. Currently, there is no reason for CFD traders on Wall Street to price in a crash of the stock exchange in the course of the sex affair around Jeffrey Epstein because of an impeachment. Now NBC has taken a snippet from 1992 from the archives. And here Trump actually speaks at a party with pedophile pimp Jeffrey Epstein. Apparently Trump says “She is hot” about a cheerleader. We say: Shocking! As a reminder: The investigation against Epstein began in 2005. This raises the question whether the Democrats don’t have sharper arrows in their quiver.
Although according to the “Washington Examiner” Maurene Comey is one of the investigators in the New York public prosecutor’s office against Epstein. And that’s not just anyone. But the daughter of James Comey, who was appointed head of the FBI by Barack Obama in September 2013. As such, Comey investigated the email affair of Hillary Clinton, but wrote to Hillary’s discharge before the investigation into the sloppy use of state secrets was completed. Trump fired Comey in May 2017, the US media suspected a connection with the investigation into alleged support in the election campaign from Russia. By the way: Trump was in turn exonerated by special investigator Robert Mueller in March 2019. But Comey still has a score to settle with Trump. Will his daughter help him with the settlement?
A slight plus New York
Whatever. Wall Street ignored this filth yesterday and focused on the New York Fed. The Dow Jones Industrial closed Thursday with a minimal gain of 0.01 percent at 27,223 points. The broad S&P 500 gained 0.4 percent to 2,995 points. And the Nasdaq 100 climbed 0.19 percent to 7904.13 points. And the US Navy’s shooting down of an alleged Iranian drone in the Persian Gulf also left the brokers cold.
Iran gives in
Otherwise, Iran seems to be giving in substantially to the nuclear dispute, which sent oil prices south. According to the Guardian, Secretary of State Mohammad Javad Zarif has offered permanent inspections of the nuclear programme if the US lifts its sanctions. The question is whether Zarif is not being pushed aside by the hardliners in Tehran because he is bowing to pressure from Washington. Let us wait and see.
That is what the day brings
At the end of the week you should screen your trading platform and the incoming news mainly at 4:00pm. The University of Michigan reports consumer confidence in July.
From 5:00pm James Bullard will be at the speaker’s desk. He is head of the St. Louis Fed.
At 10:30pm German time he is succeeded by Eric S. Rosengren, President of the Boston Fed. Both are entitled to vote in the FOMC, both speak at the annual meeting of the Central Bank Research Association in New York.
The Bernstein-Bank wishes successful trades and a relaxing weekend in the sun!
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