17.01.2020 – Daily Report. You probably already guessed it: Wall Street has already marked new highs. And now the DAX is also awakening – in Frankfurt the all-time high is finally within reach. Meanwhile, its little brother, the MDAX, is already showing what a storm at the top looks like.
A party for the bulls
Bullish news everywhere: The first part of the trade agreement between China and the USA is in the bag. Yesterday the US Senate also waved through an important free trade agreement. The Chinese economy is growing within the corridor envisaged by the government. The balance sheet figures of American high-tech and financial groups have been strong so far. Global trade is applauding. The odd small drop of bitterness from the American old economy has hardly curbed investors’ appetite for shares.
DAX lurks – MDAX at record high
As a result, the DAX climbed to 13,556 points on Friday afternoon, and was recently up 0.7 percent to 13,524 points. This brings the all-time high of 13,596 points from January 2018 back into view. We are curious to see whether the German stock market will now finally put the stagnation of the past few days behind it. Meanwhile, the MDAX moved to a new all-time high of 28,705 points on Friday morning. Most recently, the index of medium-sized shares remained in the profit zone at 28,682 digits, up 0.4 percent.
Optimism in Asia
Investors in Asia also showed courage: the Nikkei closed with a plus of 0.5 percent at 24,041 points. Here, the weaker yen and hopes of an upturn in global demand led to a 15-month high. In China, the CSI-300 rose by only a moderate 0.1 percent to 4,155. The Chinese economy grew by 6.1 percent in 2019, in line with government and analyst forecasts. However, this was the weakest growth since 1990, with brokers expressing hope that the bottom has now been reached in industrial production and retail trade.
The Trump bull market continues
Right here, right now: If you want to trade CFDs or online shares on the long side, you can’t avoid the US stock exchange at the moment. President Donald Trump scored another success after the China deal: the Senate approved the USMCA trade agreement with Mexico and Canada. As a result, all the major indices reached new highs in the bull market that has been going on for weeks now. The Dow rose by 0.9 percent to 29,298 points, the S&P 500 rose by 0.8 percent to 3,317 points. And the Nasdaq 100 climbed 1 percent to 9,125 points.
Investors also rewarded the company figures, which have so far been predominantly positive. Alphabet achieved a market capitalisation of over USD 1 trillion for the first time. The stock thus caught up with Apple, Microsoft and Amazon. In the banking sector, Morgan Stanley’s figures were convincing, with the share climbing 6.6 percent. In contrast, Alcoa disappointed, the stock slipped by 11.9 percent.
The upside-down world in Turkey
Meanwhile, traders in EURTRY rubbed their eyes in amazement: Yesterday the Turkish central bank lowered the 1-week repo rate from 12 to 11.25 percent. Analysts had expected this step. Thus the real interest rate adjusted around the inflation rate slipped with minus 0,6 per cent into the negative zone. Interestingly enough, the lira nevertheless rose against the euro – from 6.57 to 6.53. Analysts from Rabobank explained this by saying that the central bank had avoided a surprise. Nevertheless, the bank remains bearish, as urgently needed structural reforms are still pending.
What the day brings
Friday again brings some interesting dates – so you should make sure that your direct market access is open. As always, you can find the overview here: Market Mover
For example, at 02:30pm the American building permits for December are announced.
Shortly thereafter, at 03:15pm US industrial production for December is published
At the same time, the capacity utilization in December is reported.
And at 04:00pm the consumer confidence of the University of Michigan in January will follow.
The Bernstein-Bank wishes successful trades!
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