25.11.2019 – Daily Report. But now the customs agreement between China and the USA should really work out soon. At least one Chinese publication reported that it is well connected with the leadership in Beijing. The DAX is rising. Meanwhile, the crypto currencies have to be put on the scaffold because of Beijing.
Profits in Frankfurt
Here we go: Germany’s leading index broke an upward gap of 85 points on Monday morning. Most recently, the stock market indicator was up 0.4 percent at 13,217 points. On Friday, the DAX entered the weekend with a moderate plus of 0.2 percent at around 13,163 points.
Last Tuesday, the DAX reached its high for the year to date at 13,374 points. On Monday morning, the Ifo index will be in the spotlight again, you can find it here: Market Mover
Above all, however, the customs dispute between China and the USA was the focus of attention. Global trade was full of praise, and US futures rose by 0.3 percent. The gold price, on the other hand, crumbled by 0.2 percent to 1,458 dollars.
Bullish signals for Phase 1
And that was what happened: The Chinese “Global Times” reported on Monday on Twitter that the USA and China were “very close” to concluding the planned first partial agreement. The paper referred to experts close to the government. The paper is published by the newspaper “People’s Daily”, which belongs to the Communist Party.
Even before that, the tone in the customs dispute had been rather conciliatory. On the one hand, Beijing stressed that it was making serious efforts to reach an agreement. Chinese state and party leader Xi Jinping had said that Beijing was working to avoid a trade war. China was also committed to reaching an initial agreement in the conflict with the USA. However, Xi stressed that his country was prepared to retaliate if necessary.
Secondly, US President Donald Trump said on Friday in an interview with Fox News that an agreement was “possibly very close”. Many brokers were relieved: since both the US and China had an incentive to settle the trade dispute, they expected a deal in the medium term. However, Trump also warned China against sending soldiers to Hong Kong.
Asia wants to go up
In China, the CSI-300 gained 0.7 percent to 3,878 positions in the morning. Not bad: This year, the increase so far amounts to almost 30 percent. The Hang Seng gained 1.5 percent to 26,993 points. Brokers also justified the good mood with the victory of the candidates of the democracy movement in the elections in Hong Kong. We wonder whether conflicts with Beijing are not inevitable. In Tokyo, the Nikkei rose by 0.8 percent to 23,293 positions.
Restrained joy in New York
Wall Street celebrated Friday’s Customs News with moderate applause. The Dow Jones Industrial, for example, closed the day with a plus of 0.4 percent at 27,856 points. Nevertheless, the Dow recorded a weekly loss of 0.5 percent. The broadly diversified S&P 500 rose by 0.2 percent to 3,110 points on Friday. The high-tech index Nasdaq 100 climbed moderately by 0.1 percent to 8,272 points.
The bulls also received support from economic data: According to the consumer climate survey conducted by the University of Michigan, the mood of US consumers had surprisingly brightened significantly in November.
Crypto bloodbath in China
In the case of crypto currencies, the slaughter festival of recent days continued. Bitcoin recently recorded a minus of 7.5 percent at 6,117 euros. In the past two weeks, the high had been 8,212 euros. Ethereum lost 9.3 percent to 123.42 euros, here the ten-day high had been 172.19 euros. The blog CoinTelegraph reported that crypto exchanges operating in China had recently been exposed to increased search pressure. On Thursday the authorities allegedly stormed the offices of Binance and Bithumb, which both companies denied. The publication “Sanyan Finance” reported that 39 companies in Shenzhen had been raided. In addition, the People’s Bank of China announced on Friday that it would now step up its action against traders. Beijing had recently fired suspicions about the introduction of its own government-backed crypto currencies – which is why its uncontrollable competitors are now to be eliminated.
So much oil everywhere
In view of the hope in the customs dispute, WTI increased by 0.3 percent to 57.94 dollars, while Brent increased the same percentage to 62.55 dollars. Meanwhile, Oilprice.com reported a signal for the bears in the oil market: For the first time since the 2008/2009 crisis, refineries in the USA have cut back their crude oil processing. Reuters has determined this by evaluating data from Energy Information Energy. The reason: demand for oil products has fallen both in the USA and overseas; there is an oversupply of gasoline, especially in Asia. According to last week’s EIA report, the occupancy rate at US refineries in the week ending 15 November was 89.5 percent – two years ago the rate had been 91.3 percent.
This is what the day brings
The appointment calendar on Monday is only sparsely filled.
The Chicago Fed National Activity Index (CFNAI) for October could be of interest at 2:30pm in the USA.
The Bernstein Bank wishes you successful trades!
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