04.12.2019 – Daily Report. The next day, the DAX tries to recover. US President Donald Trump pulled the bull out of the hoof on Tuesday in a customs dispute with China. But on Wednesday, a new announcement in the matter caused a U-turn.
The DAX wants to go up
Astonishing resilience on the German stock market: The DAX presented itself on Wednesday morning with a plus of 1.2 percent at 13,141 points.
In Europe, punitive tariffs on cars imported into the USA continue to threaten. The American government continues to keep open the possibility of imposing 25 percent customs duties on imported cars. It remains to be seen whether these duties will be needed, Commerce Minister Wilbur Ross said in New York on Tuesday. President Donald Trump had not announced any new punitive tariffs for imported cars after the six-month inspection period that expired in mid-November.
Another new hope in the customs dispute
The Bloomberg news agency provided new hope in the customs dispute on Wednesday. Despite the recent rhetoric, the US and China are getting closer to the question of the punitive tariffs that will be reversed in Phase 1, the news agency reported, citing insiders. Trump’s recent statements – see below – are not an indication that talks have stalled.
The futures on S&P 500 and Dow Jones both rose by 0.3 percent. Hu Xijin, the cynical editor-in-chief of the communist Global Times, dismissed the news as fake news to support the share price – soon a US politician or trump would certainly report great progress. However, the ups and downs offer wonderful times for traders! If you trade CFDs or online stocks, it will be particularly exciting for you on December 15th when the next American punitive tariffs against China are due to come into force.
Trump releases the bears
The day before, Trump had let the bears loose on worldwide trade. He told journalists in London that talks with China were currently going very well. However, a deal would depend on whether he wanted it or not. There was no deadline – perhaps it would be better to wait until after the election. In a way, he likes this idea, Trump stressed several times. However, it was only a matter of him playing with his thoughts. So Trump let the whip bang in the direction of Beijing. It is interesting that he ignored the current impeachment acquisition and that he also assumes that he will be re-elected. Let’s wait and see.
Furthermore, the US House of Representatives had passed a law to support the human rights situation of the Uighurs in northwestern China. Beijing reacted angrily.
The Chinese CSI-300 closed unchanged at 3,850 points on Wednesday. The Purchasing Managers’ Index in the services sector provided support, climbing to a seven-month high of 53.5 points in November. The Nikkei, on the other hand, lost 1.1 percent to 23,135 points.
New York dives into the abyss
Wall Street’s reaction to China News yesterday was not long in coming: prices plummeted. The Dow Jones Industrial fell by 1 percent to 27,503 points. The S&P 500 fell 0.7 percent to 3,093 points on Tuesday. The Nasdaq 100 also lost 0.7 percent to 8,255 points. After all, the major indices were able to contain some of their losses again. With yesterday’s move, the Dow broke a nice downward gap between roundabout 27,800 and 27,500. The S&P 500 over 3093 points looks similar. Chart analysis teaches us that such gaps are normally closed again.
Hope for oil
The bulls in the oil market rushed into the hope that OPEC+ might be able to cut production after all. WTI increased by 1.2 percent to 56.79 dollars, Brent by 1.3 percent to 61.61 dollars. Iraqi oil minister Thamir Ghadhban recently announced a reduction of 400,000 barrels a day, according to Bloomberg. There were also votes for further cuts, but these would probably not be enforceable at the rate of 1.2 million barrels per day.
This is what the day brings
The calendar on Wednesday brings some interesting events, you can find the overview as always here: Market Mover
At 2:15pm the ADP Labour Market Report November for the USA will be published.
At 3:45pm the Service Markit for November purchasing managers’ index (2nd publication) will follow.
At the same time, the ISM-Index Non-Processing Industry for November will ticker on the screens.
At 4:30pm the US crude oil inventory data from the state Energy Information Administration follows..
Last but not least at 10:15pm the decision about possible changes in the indices of the DAX family of Deutsche Börse is made.
Bernstein-Bank wishes you successful trades!
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