Beijing stops the DAX

By 28/11/2019News
China Börsenachrichten

28.11.2019 – Daily Report. German shareholders are already familiar with this: Wall Street is attracting and setting new records. Nevertheless, the DAX is not getting off the ground. Once again, the reason lies in the China-USA conflict. Moreover, the American market remains closed on Thanksgiving – before the trading break the risk of positioning oneself on the wrong side increases.

Moderate minus in Frankfurt

Investors on the German stock exchange were cautious on Thursday morning. The DAX recently dropped by 0.4 percent to 13,234 points, further retreating from the previous year’s high of 13,374 points reached by Germany’s leading index in the previous week. The same naturally applies to the all-time high of 13,596 points in January 2018.

Threats from China

The reason for this reluctance was the Hong Kong case. US President Donald Trump has signed the bills passed almost unanimously by Congress. This bans the export of tear gas, pepper spray, rubber bullets and stun guns to the Hong Kong police. The government will, however, treat parts of the laws differently in order not to undermine the constitutional authority of the president in foreign policy issues, wrote Trump. It remained unclear which passages were actually at stake.
China reacted indignantly: The Foreign Ministry in Beijing reported that Deputy Foreign Minister Le Yucheng had appointed US Ambassador Terry Brandstad. The ministry demanded an immediate end to this policy and further damage to bilateral relations. Furthermore, a spokesman for the Foreign Office raged in Beijing, the United States supported “violent criminals who beat innocent people and set them on fire”. He spoke of “evil intentions” and a “United States conspiracy”. “We advise the United States not to act arbitrarily, otherwise China will take decisive countermeasures.

Asian stock markets skeptical

And of course there were immediate concerns that a customs deal between China and the USA might not work out after all. The Hang Seng lost 0.2 percent to 26,894 jobs. The Chinese CSI-300 slipped by 0.3 percent to 3,862 points and the Nikkei fell by 0.1 percent to 23,409 points.

Records in New York

The evening before, American investors had been betting on a settlement in the customs dispute, and records were the logical consequence. The Dow Jones climbed by 0.2 percent to 28,164 points, at times to around 28,175 points. The S&P 500 closed up 0.4 percent at 3,154 points, marking a final record. The Nasdaq 100 also marked a new final high, posting a plus of 0.7 percent to 8,445 positions. Before Thanksgiving and the shortened trading session on Friday, however, trading volumes were flat.
The second estimate of economic growth in the USA in the third quarter also provided a good mood – GDP turned out stronger than previously calculated. All data can be found here: Market Mover

Sterling and Politics

So that’s another short detour into the forex market – if you trade CFDs in EURGBP or USDGBP, you should keep an eye on the opinion polls. A new analysis has once again revealed a catastrophe for Labour in the December election. YouGov calculated a majority of 359 seats for the Tories in parliament – 42 more than in the 2017 parliamentary election. Labour would lose 51 seats and win only 211 seats. That would be the second worst election defeat after the war – and it looks very much like clear conditions. And after a business-friendly policy. Ergo, Sterling has recently presented itself as robust. YouGov interviewed as many as 100,000 people; the institute had already predicted a parliament without a clear majority in 2017.

That’s what the day brings

Wall Street will be closed on Thanksgiving. Important dates are also scarce elsewhere.
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. 68% 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.