News

16.08.2019 – Daily report. Finally green prices on the trading platform again – the German leading index gains in early Friday trading. Positive signals in the tariff dispute between China and the USA breathed new life into the world’s stock markets. In addition, according to US data, there was growing hope that the recent fears of recession were exaggerated.

Profits in Frankfurt

Finally activism on the long side in global trading again – stocks were also in demand again in Frankfurt. The DAX recently rose by 1 percent to 11,530 points. That was about time: within three weeks, the index has now lost around 1,000 points. On the previous day, the price indicator had fallen to its lowest level since mid-February. The German benchmark index has since slipped so low below the 200-day line that a slight panic, or at least a severe depression, can be observed. If so many optimists have capitulated, how many sellers are left? In other words, the rebound was overdue.

Small expiration date

Apart from increased volatility, nothing is guaranteed at all. Because today the options on stocks and indices on the futures market expire. Big names in the market then like to push heavyweights in the indices in their direction. When you trade CFDs or buy stocks online, you should keep today’s small expiration date in mind.

New hope in the customs dispute

Politics, too, continues to cause prices to fluctuate. The day before, Donald Trump had explained that he saw an imminent settlement of the trade conflict with the People’s Republic. “I have the feeling that it will be rather short,” he told journalists. Trump made it clear that both sides wanted to do something, but didn’t give any details. Beijing played the ball back. Chinese Foreign Office spokesmen stressed that they were still hoping for a trade agreement. Trump and Chinese President Xi Jingping remained in contact.

Caution in Asia

In China, the CSI-300 increased by 0.5 percent to 3,711 positions. The Nikkei climbed by 0.1 percent, while the weekly minus was 1.3 percent. The situation in Hong Kong caused many brokers to exercise restraint. Before the demonstrations planned for the weekend, the official “Global Times” warned against the option of violent intervention by the Chinese leadership in the former British crown colony. A bloody invasion by the Chinese People’s Liberation Army is likely to have an impact on customs negotiations between China and the US. And with it the world’s stock exchanges.

Slight recovery in New York

The development in the tariff dispute had led to a small recovery on Wall Street on Thursday. The Dow Jones Index gained 0.4 percent to 25,579 points, breaching the 200-day line down, but at least working close to it again in the end. The S&P 500 rose 0.3 percent to 2,848 points. The Nasdaq Composite, on the other hand, lost just under 0.1 percent to 7,767 positions.
Economic data from the USA also provided new hope. Retail sales in July rose by 0.7 percent – far more than expected. All important data can be found here: Market Mover
Obviously consumers cannot be deterred from shopping – private consumption is the mainstay of the US economy. Were the recent fears of recession triggered by the inversion of interest rates exaggerated? We will see.

Japan holds most US bonds

Let’s stay with the Treasuries. According to information from the US Treasury, Japan replaced China as the largest holder of US government bonds in June. Tokyo has bought 21 billion dollars worth of bonds since May and reached 1.12 trillion dollars. Even China bought – despite contrary threats of some state-related experts in the customs dispute. The stock increased by two billion dollars. The People’s Republic now holds bonds worth 1.11 trillion dollars. If China were to sell US government bonds in a trade war, the number 3 in the ranking would still have potential for purchases: the US ally Great Britain now holds bonds worth 342 trillion dollars, compared with 323 trillion a month earlier.

This is what the day brings

There are only a few important dates on Friday.
At 2:30 pm the American building starts and building permits for July will be announced.
At 4:00pm consumer confidence of the university Michigan for August will be published.
In view of the small amount of incoming data, the stock market remains politically dominated. So keep an eye on regular market updates and direct market access open.
The Bernstein Bank wishes you successful trades and a relaxing weekend!

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.

15.08.2019 – Daily report. Bloodbath in global trade: Prices in New York and Frankfurt had collapsed on a deep red Wednesday on the way south. On Thursday, the DAX first tries to recover. But this collapses after a short time. No wonder: fears of recession and China are weighing on. Perhaps a bunch of important US data in the afternoon will bring relief.

No DAX recovery

That was it at the Frankfurt Stock Exchange: Yesterday, the DAX broke through the 200-day line at 11,493 points, the last time at 11,648 points. Some optimists were swept out of the market with a full minus of 2.2 percent. Most recently, the leading German index was down 0.6 percent to 11,423 points. Will the strong hands soon be reaching out again? The signs are bad at the moment, but unexpectedly often comes.

Trump links Hong Kong to customs dispute

In Asia, trading was mixed in the morning. The Nikkei index lost 1.2 percent to 20,405 points. Here, the strong yen depressed sentiment. The Chinese CSI-300, on the other hand, rose by 0.3 percent to 3,694 points. And this despite the fact that US President Donald Trump now officially linked the protests in Hong Kong with the tariff dispute. Via Twitter he announced that Beijing could only expect an agreement in the trade dispute with the USA once the problem with Hong Kong had been solved. After all, Trump proposed a personal meeting to the Chinese head of state Xi Jinping for discussion. So not all doors have been slammed yet.

New York on a descent

The evening before, the hope of an agreement with China had not long supported prices in the USA. The leading indices all fell by around 3 percent. The Dow Jones Index closed at 25,479 points, the S&P 500 bid farewell at 2,840 points and the Nasdaq Composite closed the day at just under 7,774 points. Volatility rose sharply in the drama of the past few days, as did the price of oil. Due to impending price increases before the Christmas business, Washington had postponed the introduction of already announced punitive tariffs on Tuesday. But then the fear of recession raged again – for the first time since the collapse of Lehman Brothers, the bond market showed an inverse yield curve.

Inverse yield curve – flight to US Treasuries

The yields on long-dated bonds fell briefly below those of short-term bonds. And for the first time since 2007. This so-called “inverse yield curve” is a rare phenomenon and a signal of recession. This means that the yield on ten-year securities is lower than that on two-year securities. Longer-dated bonds usually yield higher yields than shorter-dated bonds. After all, the risk is more difficult to assess in the long term and must therefore be remunerated more heavily. More and more investors therefore want to park money in the long term, even though they hardly receive any interest – and they simply do not want to invest in the short term. For example, the yield on the 30-year US government bond fell below two percent for the first time. This means that all US securities are now below the Fed’s key interest rate. By the way, gold is also more expensive than it has been for about six years.

Source: Bloomberg

This is what the day brings

In the afternoon it gets really exciting when you trade CFDs or are active online in stock trading. The calendar is full to bursting. As always, you will find all important dates here: Market Mover
At 14.30 hrs, US productivity ex agricultural will be on the agenda for the second quarter. (1st publication)
At the same time, the weekly first US applications for unemployment benefits are being received.
Ditto the Empire State Manufacturing Index August.
Also US retail sales in July.
And also the Philly Fed Index August.
The Federal Reserve then reports data on US industrial production and capacity utilisation in July at 3.15 pm.
At 4 p.m., US inventories in June will finally run through the tickers.
So there’s a lot for CFD traders to do in the afternoon. The Bernstein Bank wishes 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.

14.08.2019 – Daily report. The bulls on the German stock exchange are not calming down. After the DAX had finally shaken off the paralysis the day before, early Wednesday trading is already going down again. Initially, the US’s concession to China in the customs dispute had pushed prices higher. Now new fears of recession made the rounds: The German economy has shrunk.

Fears of recession in Frankfurt

That’s how fast it can go: Germany’s leading index did not maintain its pre-trade gain. Most recently, it was down 0.9 percent at 11,640 points. The most important reason for this is that Germany’s gross domestic product fell by 0.1 percent between April and June compared with the previous quarter. According to preliminary calculations, this was announced by the Federal Statistical Office on Wednesday. Another such quarter and Germania would also be officially in recession. Particularly bitter: Germany is now, with the current figures, the economic taillight in the euro zone. As always, all important economic data can be found here: Market Mover
And already the joy of the day before was gone. Yesterday Washington surprisingly suspended some tariffs for China imports that had already been agreed, and negotiations are now continuing. Many analysts in the USA and China saw this as a sign of Donald Trump’s weakness – he had shown Beijing his nerves.

Asia celebrates US conciliation in customs dispute

Global trading and the Asian stock exchanges reacted with profits to the new development. The CSI-300 with the most important blue chips of the Chinese mainland closed the morning 0.5 percent higher at 3,682 points. The Nikkei advanced by 1 percent to 20,665 points.

Investors recently displaced the most recent development in Hong Kong. People have been taking to the streets here for two months now. China has now rallied troops on the border. CFD traders are advised to keep an eye on their regular market updates: If the situation escalates bloody here, it could have a negative impact on the tariff dispute between China and the US. And the Wall Street is swirling accordingly.

China’s industry weakens

Specifically, on Tuesday the USA postponed the introduction of punitive tariffs on Chinese goods such as iPhones, sneakers or clothing until 16 December. Actually, special tariffs should take effect from September. According to a media report, the Middle Kingdom wants to stick to the planned trade talks with the USA in September despite great scepticism. The suspension of the new punitive tariffs had always been a precondition for this.
In fact, the People’s Republic now has a problem: the trade dispute with the USA is slowing down China’s industrial production. In July this had increased by only 4.8 percent compared to the same month last year, as the statistics office announced in Beijing on Wednesday. The increase is the weakest since February 2002.

Profits in New York

The American stock exchange had also celebrated the latest development in China the evening before. Stocks from the high-tech sector, which is closely linked to Asia, rose particularly rapidly. The Nasdaq 100 gained 2.2 percent to 7,728 points. The Dow Jones Industrial climbed to 26,427 points, the highest level since the beginning of August. At the closing bell, the Dow was 1.5 percent firmer at 26,280 points. The S&P 500 also rose by 1.5 percent to 2,926 points.

This is what the day brings

The appointment calendar on Wednesday is rather sparsely stocked. The import and export prices for July start at 2.30 pm.
This is followed by the weekly oil report of the Ministry of Energy at 4.30 pm.

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.

13.08.2019 – Daily report. No ray of sunlight currently reaches the floor of the Frankfurt Stock Exchange. The world appears grey and gloomy to most shareholders. Just as in global trading, fears of recession are making the rounds – the ZEW index is collapsing sharply. In addition, trouble spots such as China, Italy and now Argentina are pulling on the nerves.

DAX below the 200-day line

Tuesday morning didn’t go very well for the cops. The DAX recently traded at minus 0.7 percent at 11,600 points. The ZEW index intensified the depression of recent days: The August indicator for economic expectations dropped dramatically to minus 44.1.

Fresh food for the bears on the German stock exchange. And for all investors who trade short CFDs – but please only with Germany’s best CFD brokers with a Bafin license. The DAX is already hanging just below the 200-day line, which most recently stood at 11,640 points. The German leading index has thus perforated its safety net. The closing level will now be important. Just as in previous meetings, the question arises as to whether the support will not tear in the long term.
Italy could become a factor for the stock market to plunge. Investors in the bond and currency markets are also keeping a close eye on developments there, as a possible new election and victory of the Lega could mean stress for the euro. In the government crisis, the Senate votes today at 6 p.m. on a date for the vote of no confidence against Prime Minister Giuseppe Conte.

Threatening invasion depresses Asian stock markets

Several negative factors at once led to price losses in Asia. The Nikkei 225 slipped by 1.1 percent to 20,455 jobs. The Chinese CSI-300 closed with a minus of 0.9 percent at 3,666 points. The Singapore government has just lowered its growth forecast for the current year to almost zero. In addition, the strong yen led to a reluctance to buy shares in export-oriented corporations.
However, the continuing trade dispute between China and the USA and the situation in Hong Kong in particular caused nervousness. Beijing is apparently preparing an invasion of the former crown colony, and the indomitable demonstrators are facing a massacre. Videos from the neighbouring Chinese city of Shenzhen with columns of military vehicles circulate on Twitter. The question remains how the USA would react to a military intervention. Perhaps with new sanctions: In the customs dispute, new punitive tariffs are to come into force on September 1 anyway.

Backstabbers in New York

The situation around China had already worried Wall Street the evening before. Fears of a possible economic war with the People’s Republic of China were the cause of the recession. The Dow Jones Index bid farewell to the closing bell with a minus of 1.5 percent at 25,896 points. The broad-based S&P 500 fell 1.2 percent to 2,882 positions. The Nasdaq Composite slipped by 1.2 percent to 7,863 points.

Crash in Argentina

What remains is a glimpse of the next crisis. Argentina could offer a good investment opportunity for all courageous investors who like to bet on violent counter-reactions. Because there is panic raging – and after that usually a certain relief follows. The financial markets collapsed after the presidential primary election. The reason: Argentina’s President Mauricio Macri has suffered a bitter rebuff. The stock market slumped by about a third. Government bonds also crashed, and the yield on bonds due in 2026 with an interest rate of 5.875 percent rose from around 10 to 15.16 percent. The 20-year bond with a coupon of 3.75 per cent rose from around 8.75 per cent to just under 11 per cent. The peso continued to fall in price. Already last year it had collapsed by about half due to currency crises.

Demand for gold and silver

In the face of all the unrest, investors fled to safe havens. Like gold, silver has become more expensive. Interesting things are looming in the chart technique for the white precious metal: It currently looks as if the silver ounce is forming a small flag at around 17 dollars. And that suggests further price gains.

This is what the day brings

You see, the table for CFD traders is richly laid. The view remains in the calendar. At 2:30pm the US consumer prices are reported, ditto the real incomes for July.
At 10:30pm, the weekly crude oil inventory data from the private American Petroleum Institute complements today’s OPEC monthly report.
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.

13.08.2019 – Special report. So now he’s dead – pedophile pimp Jeffrey Epstein was found hanged in his Manhattan cell on Saturday. However, the potential state crisis continues to smoulder, it has by no means left with the mysterious death. And this also has to interest CFD traders. Because the election of the US president has always moved Wall Street.

Potential consequences for the financial market

The fact that national policy influences share prices, dollars or treasuries is particularly true in the case of Donald Trump: the White House is taking on protectionism from China. Not to mention India and the European Union. The recent turn in the sex scandal with the death of Epstein could decide the election in favour of Trump. After all, the pendulum against the leading grandees of the democratic party has finally been broken. But one thing at a time.

Murder or suicide?

On Saturday morning, Epstein, who was once well connected in the highest political circles, was found hanged in his cell in the Metropolitan Correctional Center (MCC) in Lower Manhattan. In our first special report on the matter, we had already suspected that Epstein’s life expectancy was rather short.
Death raises some questions. What did Epstein hang himself with? Both the prisoners’ clothing and bed linen are made of lightly tearing, thin fabric. According to the New York Post (NYP), there are cameras in Epstein’s wings – but they don’t film into the cells. Why? Especially since Epstein, according to NYP, was housed in the high security wing, the Special Housing Unit. According to Reuters, the guards had ignored the mandatory half-hour surveillance interval for the most politically dangerous prisoner in the United States on Saturday night. Why? Furthermore, the 24/7 “Suicide Watch” was lifted at the end of July. Why? Three weeks ago Epstein had already been found almost unconscious with injuries to his neck. And “DailyMail.com” wrote with reference to an insider that the normally quite reserved Epstein had been in good spirits recently. However, he had reported that there were signs that someone was trying to kill him.

Democrats, presidents and a well-known prime minister

In view of this fear, it is worth taking a look at the momentum of documents from a lawsuit that was closed in 2017 that was unsealed before the weekend. In 2015, a woman named Virginia Roberts Giuffre filed a lawsuit against Epstein’s matchmaker “Madam” Ghislaine Maxwell. Maxwell is said to have procured Giuffre and other minor girls for the various orgies. Giuffre claims that she had to sleep with several high-ranking personalities. Among them the British prince Andrew. And especially explosive: Also with the former senator George Mitchell (democrat from Maine) and the former governor of New Mexico, Bill Richardson (democrat). All deny it. This important plaintiff also exonerated Trump: He never took part in sex parties and did not flirt with her.

And even more explosive: Giuffre had not only been forced to have sex with prominent American politicians and powerful businesse executives – but also with foreign presidents, a well-known prime minister and other world leaders. These are the documents published by the financial blog “ZeroHedge” with a link to the busy journalist Adam Klasfeld.

Heads must roll

After Epstein’s death in the cell, the FBI has now initiated an investigation. The lawyers of the abused victims announced that they were only at the beginning – now the estate of Epstein is to be divided in order to atone for his deeds with money. The Republicans have licked blood: “Heads must roll,” demanded Ben Sasse, senator from Nebraska and member of the Senate Judiciary Committee. The American media are digging hard – this could be the scandal of the century. And even if the Journaille in this country in the usual Anti-Trump-Reflex dismiss his Twitter message concerning a possible connection to Bill Clinton as a conspiracy theory, it is worth taking a look at exactly this track.
The Death List
As early as 2016, CBS Las Vegas published a death list with almost 50 names from the environment of Bill and Hillary Clinton. Among them are politicians, colleagues – and eleven bodyguards alone. All people who either knew something about the Whitewater real estate scandal, the various rape charges against Bill or the e-mail scandal in the Democratic Party around Hillary. Plane crashes, car accidents, suicides, unsolved murders.
https://lasvegas.cbslocal.com/2016/08/10/the-list-of-clinton-associates-whove-died-mysteriously-check-it-out/

Goals against the Democrats

This currently results in a strong imbalance on the Democratic side. If this continues, it could lead to the Democrats being destroyed in the presidential election and also in Congress. Donald Trump, on the other hand, scored points: even the left-wing Washington Post has now admitted that the friendship between Trump and Epstein broke after a dispute over a real estate deal in 2004. And thus even before the first sex revelations against Epstein in 2005, with which Trump could loosely govern in matters of border fences to Mexico, taxes, Iran, customs disputes with China etc.. Which speaks for a business-friendly policy and a strong bull market on Wall Street. But let’s wait and see.

Is Trump involved?

Of course, you never know what dirt will come to light when it comes to Trump. Among other things, the website “Vox.com” reported as early as 2016 that 15 girls had reported sexual assault. A 13-year-old girl had claimed that she had been raped by the current president as a 13-year-old on an orgy. When the woman with the pseudonym “Katie Johnson” and “Jane Doe” was supposed to speak at a press conference of lawyer Lisa Bloom, however, she missed the appointment. Then she dropped the charges – and reported that she had received death threats. Further, in 1997 a woman named Jill Harth Trump accused (sex assault) of sexual assault, but dropped the charges even though she upheld the allegations.

The political thriller continues

So pick who’s dirty around here. There’s a battle raging on Twitter between TrumpBodyCount and ClintonBodyCount.
Anyway, we suspect that some interesting news will boil up in this political thriller in the coming weeks. And we are very worried about the health of Madam Maxwell and especially about the pilots from Epstein’s private jet, the “Lolita Express”. They know best who flew to paedophile orgies exactly when. According to the website “Gawker” Bill Clinton is said to have flown the jet more than 20 times, he denies that and only talks about a handful of flights accompanied by his security.
So keep an eye on this unappetizing affair – whether you’re involved in online stock trading or CFD!

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.

09.08.2019 – Daily report. After the bloodbath of the last days the wounded bulls look hopefully at the chart technique. The DAX has torn some price gaps in this turbulent week. And they want to be closed. The rebound of yesterday’s Thursday is definitely a whim. If there hadn’t been skepticism on the German stock exchange again on Friday at noon. Italy and China are depressing prices.

DAX hovers above the 200-day line

Who trained the brokers on the Frankfurt stock market? As if they had all attended the same university, they recently looked at chart technology. In textbook terms, the DAX rebounded from the 200-day line yesterday with a solid plus of 1.7 percent. The safety net of the moving average should hold better – the abyss lurks south of 11,640 points. Exactly this mark had tested the DAX on Wednesday and closed on it.

On Friday noon, the German benchmark index moved just above this level. Most recently, the price indicator stood at 11,750 points, albeit with a minus of 0.8 percent. Support was provided by Bayer stock, which at times recorded double-digit gains. The Bayer Group is seeking a settlement with thousands of glyphosate plaintiffs, hopefully removing the ongoing issue from the table.

Escape to safe havens

Coins and bars were in demand on Friday. The gold price levelled off at 1,500 dollars per ounce. German government bonds were also on the shopping list. The Euro-Bund future climbed to 177.40 points in the meantime, the yield on ten-year German government bonds slipped to minus 0.592 percent. Investors are therefore paying the Bundesbank money to ensure that their capital is safe. Is anyone afraid of a bank crash? For example, at Southern European commercial banks that have bought their own government bonds at the behest of their governments? Perhaps even Italian bonds? Not good…

Nervous flutter because of Rome

The nervousness is understandable, because the national crisis in Italy continued to cause excitement. In Rome, after only 14 months, the right-wing alliance of Lega and the five-star movement failed. Interior Minister and Lega leader Matteo Salvini demanded a new election on Thursday. Of course, the Lega is speculating on a mega-success in a new ballot. Because the Italians don’t want to spoil the soup they got from left-wing do-gooders in this country when it comes to the refugee crisis. Strangely enough, open borders in Italy are not seen as enrichment at all, which could perhaps be due to declining internal security. So the Lega’s hard course of isolation is well received. Is that right or sensible? Here it’s worth reading our Special Report on the European elections: The political crack that runs through Europe also has an impact on the financial market.

Foreign exchange traders in euros should definitely keep an eye on the matter: Italy could try to get out of the euro and elegantly clear its debt with a parallel currency. You may remember another special report, this time on the mini-bot issue: Rome could introduce these bonds, which are randomly offered in small denominations just like euro banknotes, nationwide and binding. If Rome explains the default on its euro debts without further ado, then the common currency – and the European stock exchanges – will wiggle along with it. Italian government bonds will then dive down to zero and prepare a party for short traders.

So you see, dear reader: Told you so. We had warned you of both developments at an early stage. The Bernstein Bank won’t leave you alone as a pilot in the shallows of the stock exchange!

Customs dispute continues to slow Asia down

Investors in Asia showed a lack of direction on Friday. In Tokyo, the Nikkei 225 gained about half a percent to 25,685 points. But the CSI-300 recorded a minus of one percent to 3,634 places on Friday. The reason for this reluctance was still the latest damper in the customs dispute. Beijing had announced that it would stop importing US agricultural products for the time being. Actually, the People’s Republic had promised to increase its purchases. Washington now wants to delay its decision to resume business with Huawei.

New York in a buying mood

On Wall Street, investors had accessed on Thursday. As in Frankfurt, the reason for the price gain was good export figures from China. The S&P 500, which is particularly meaningful because it is broad, gained a convincing 1.9 percent to 2,938 points. The technology index Nasdaq 100 even gained 2.3 percent to 7,725 positions. And the Dow Jones Industrial at least recorded a plus of 1.4 percent to 26,378 points at the closing bell. All three indices closed Thursday just below their daily highs.

That’s what the day brings

CFD traders can expect a quiet Friday afternoon apart from the uncertainties of politics. The focus on the trading platform is only on US producer prices for July, which will be released at 14:30.

Bernstein-Bank wishes successful trades and much recovery on the weekend!

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.

30.07.2019 – Special report. Who has the longer hand in the customs dispute – China or the USA? Perhaps we will find out later this week. Because the trade talks are to be resumed. Domestic political developments play into the hands of the Americans. Because the Chinese leadership apparently fears a revolution. This could be triggered by an economic crash. This seems quite possible: the second Chinese bank has just been saved by a bailout.

New round in customs dispute

As of Tuesday, traders will be paying particular attention to their trading platform as a U.S. delegation headed by Trade Representative Robert Lighthizer is expected to visit the People’s Republic for talks. The talks were frozen weeks ago with this state of affairs: The USA is withdrawing its sanctions against the telephone company Huawei. In return, the Chinese are increasingly buying agricultural products in the USA, especially soybeans. US President Donald Trump had recently been rather pessimistic and complained that the Chinese had not yet started buying agricultural products. He also said that Beijing might be waiting for a new president to negotiate further. Specifically, to a new fool who would give in to Beijing. The question is whether China has the time to sit out the conflict. The events in Hong Kong and in the banking sector at least raise doubts.

Beijing sees a colour revolution

The Chinese leadership has just spoken on the unrest in Hong Kong. For the first time a Chinese party newspaper has described the protests as a “colour revolution”. The official “China Daily” wrote on Monday that the protests “have the same hue as the colour revolutions instigated in the Middle East and North Africa: local elements critical of the government conspiring with outside forces to overthrow governments using modern communication technology to spread rumours, mistrust and fear”.

Three red lines

Also for the first time, the Hong Kong and Macao Bureau of Affairs made a statement. The statement goes in the same direction. A spokesman drew three clear lines: first, no threat to national security. Second, no challenge to the authority of the central government and the constitution (although this fact is ridiculous, since the party is already in power and in power as it pleases). Third, Hong Kong should not be misused as a basis for infiltrating China. After all, the spokesman also addressed a critical word to the administration of the former crown colony: it must ensure that the concerns of young people are taken seriously, that they need good economic development and career opportunities.

China fears its own people

Through these two speeches, Beijing revealed how the communists ticked: they are indeed afraid of a revolution. Beginning in Hong Kong, extending to Beijing. You may remember our Special Report in which we discussed the sanctions imposed by the USA on companies from the Chinese security sector. Washington has indeed hit a sore spot with this: If the millions of surveillance cameras in the country no longer work, the bigwigs in Beijing will have to tremble for their survival if the uprising breaks out in the heartland. The Tianmen massacre 30 years ago is still in the bones of those in power. Moreover, the Chinese have not forgotten the reign of terror under Mao Tse Dong. So there are still some outstanding bills here.

There is enough fuel for the bubbling mixture. Extreme housing shortage in Hong Kong, apart from the fact that the people there felt betrayed by their leadership in democracy because they wanted to extradite dissidents to Beijing. This raises the question of how the Chinese economy is really going, apart from the falsified statistics. And what about the banks and how secure people’s savings are.

Banks in the province on the move

So another piece fits into the possible revolutionary puzzle. In Germany so far little attention has been paid to the condition of the smaller banks. At the end of May, the Baoshang Bank with assets of around 576 billion yuan, i.e. around 75 billion euros, was taken over by the state. The news of the rescue of the rather unknown financial institution caused some experts to raise their eyebrows. What about the financial sector outside the metropolises? And Barclays Bank has already drawn up a list of those financial institutions that had delayed their 2018 annual financial statements. There are almost 20 of them that are subject to suspicion: Rotten loans, thin capital cover, collapse risk.

Also on the list was the Bank of Jinzhou (93.4 billion euros). This is precisely where Beijing has just set up the rescue. As the financial blog “ZeroHedge” reports, Jinzhou reported talks with government representatives on Thursday due to acute liquidity bottlenecks. The repo rate for Chinese government bonds shot up immediately. The banking supervisory authorities announced that the country’s largest donors would have to prepare for an intervention. Of course – China must avoid a credit crunch and bank runs at all costs. Reuters announced on Sunday that the move would be implemented, according to which three state-owned companies want to take a stake of at least 17 percent in Jinzhou in return for fresh cash; these are the Industrial and Commercial Bank of China (ICBC), China’s largest lender. China Cinda Asset Management and China Great Wall Asset Management.

Short and long opportunities

Our conclusion: It ferments in the Chinese province. At the behest of the Beijing leadership, many financial institutions have either invested themselves in real estate projects or granted mortgage loans. Outside of Beijing and Shanghai as well as other mega metropolises, however, there is acute vacancy, partly with entire ghost towns and empty shopping centres, whose dull shop windows are covered with logos of Western brands to camouflage them. If exports collapse in the customs dispute with the USA, many borrowers from foreign trade will tip over. China has still accumulated enormous reserves to save some companies and credit institutions – but the mass of American government bonds must first be sold.

For traders, this means the following: Keep an eye on the banks in the flat country. Ditto the small and medium-sized property developers and project developers. When a bank collapse eats through the market on a broad front, panic ensues. Then the Chinese indices will crash. If the Chinese elegantly rescue banks and property developers – for example by buying apartments – the danger will be averted. Another side: If there are really problems on a broad front in the country, Beijing has to give in in the dispute with Washington and conclude a customs agreement. The result would be a leap of joy on Wall Street, the DAX and other stock exchanges.

Bernstein-Bank wishes you very 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.

29.07.2019 – Daily report. At the beginning of an important week, shareholders are reluctant to make new purchases. The most important date is Wednesday: A rate cut by the Federal Reserve is deemed to have been agreed. For most brokers, the only question is how strong it will be. The resumption of trade talks between Beijing and Washington has also created a tense calm.

Frankfurt waits for the Fed

Everything looks to Washington: The DAX has worked its way up hesitantly, before the Fed’s interest rate decision on Wednesday nobody wanted to position themselves on the wrong side. Germany’s leading index, for example, was down 0.2 percent at 12,400 points until Monday midday.

On Wall Street and on the Frankfurt floor, an American interest rate average of 0.25 percentage points was most recently considered to have been agreed. Only a small part of the stock market even sees a cut of 0.5 percent. But that would probably cause a little panic – is the US economy in such a bad state? It would also be a massive disappointment if, contrary to expectations, the Fed did not push interest rates at all. But anything but the first US rate cut in more than ten years would be a huge surprise in view of new economic worries and the trade dispute with China.

Asia is also holding back

It is precisely this customs conflict that is another factor in the restraint on the stock market. From tomorrow, Tuesday, investors in global trading will be paying particular attention to their trading platform, as a U.S. delegation headed by Robert Lighthizer is expected to visit the People’s Republic for talks.

The investors in Asia had positioned themselves accordingly on Monday. In Tokyo, the leading index Nikkei 225 closed with a minus of 0.2 percent at 21,617 points. The Chinese CSI-300 fell by 01 percent to 3,854 points. In addition, investors in Japan are also waiting for their own central bank, which is expected to announce a continuation of its economic stimulus program on Tuesday. And here, too, investors expect a rate cut of a quarter of a percentage point.

Good news from New York

The USA’s instructions from Friday had played into the hands of the bull. The Dow Jones Industrial only went into the weekend with a small plus of 0.2 percent at 27,192 points. The weekly balance was similarly puny. But both the S&P 500 and the Nasdaq 100 continued their recent record run. The market-wide S&P rose by 0.7 percent to 3,026 points. And the Nasdaq 100 gained 1.1 percent to 8,017 positions; here strong figures supported Alphabet.

Interest rate cut in Turkey

There remains a short look to Ankara. Yesterday the Turkish central bank lowered its key interest rate for the first time in four years. With the strong move from 24 to 19.75 percent, politicians intervened massively in the currency market. At the beginning of July, Recep Tayyip Erdogan had pushed the central bank governor out of office and replaced him with his deputy. He now delivered as requested. Interestingly, the lira has recently shown itself to be relatively stable – low interest rates normally put pressure on a currency. Does the market now see the lower interest rate as a self-confident sign that the economy is about to recover? Or is someone buying Turkish lira in the background? In any case, the lira collapsed immediately after yesterday’s announcement, only to subito miraculously recover afterwards. Perhaps the central bank had just destroyed a few shorts with support purchases. We are keeping an eye on developments.
Economic data had created a good mood: the American gross domestic product for the second quarter had grown by 2.1 percent, which was stronger than most had expected. However, the effects of the new tariffs and the trade dispute with China had certainly become apparent. Which is a good argument for a Fed cut.

But even the US stock market is unlikely to move much in the near future. The US job report on Friday is also in focus alongside the Fed. And incidentally, almost a third of the companies listed in the S&P 500 report their figures this week. For example, we are looking forward to quarterly figures from heavyweights such as Apple, General Motors, Merck and Procter and Gamble.

This is what the day brings

So full the week, so empty the Monday. Consider this a calm before the storm if you trade CFDs or are active in online stock trading.

Bernstein-Bank wishes you very 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.

29.07.2019 – Special Report. In the USA, a demographic explosive device is lurking in secret. Secretly and quietly, the pension gap has grown into a worrying size. It is supposed to be 6 trillion dollars – who will pay for it? The explosive ingredients: Ageing, rising pension entitlements and fewer contributors. A new crisis of confidence is looming in the mortgage market. This mix could tear Wall Street and thus also the DAX and global trade into the abyss. We’ll tell you what signals you need to watch out for.

The pension is safe!

The former Labour Minister Norbert Blüm (CDU) already wanted people to believe that the German pension can somehow be financed in its present form. The USA has the same problem. While here in Germany shrewd politicians try to obtain fresh money by means of an alleged CO2 tax, the financing in the USA is supposed to run on pump. The American pension plans are guaranteed by a quasi-governmental organization, the Pension Benefit Guarantee Corporation (PBGC). But according to the website “RealInvestmentAdvice.com”, the PBGC will be dry in 2025. The solution of the congress: Pension funds should be allowed to get into debt individually in order to pay out the savers whenever a pension plan is no longer liquid. But who lends already fresh money to an insolvent fund! That looks like a state bailout – or a loss of savings for pensioners.

Global black pension gap

Incidentally, the pension issue is not a purely American problem. The financial website Visual Capitalist quoted the World Economic Forum as estimating that there had been a $70 trillion global pension funding gap in 2015. If the trend is not stopped, the gap will probably have risen to 400 trillion dollars by 2050 – about five times today’s global economic output. This is precisely why central banks are afraid of an international recession. But the US is likely to become the epicentre of the pension crisis, if only because, unlike in totalitarian countries, the state cannot conceal the problem here. And because the crisis is likely to hit the stock market quickly.

The 6 trillion dollar problem

In April 2016, Moodys had estimated the unfunded debt burden for all state and local pension plans in the US at $3.5 trillion, writes RealInvestmentAdvice.com. This is the amount that is not covered by current or future pension contributions or investment interest. The calculation is based on interest of 3.7 to 4.1 percent. Another estimate at the time by the conservative think tank American Enterprise Institute put the gap at 5.2 trillion dollars, i.e. 5,200 billion dollars, assuming a bond yield of 2.6 percent.
Today the bomb is ticking louder than ever. Last year, according to “RealInvestmentAdvice.com”, Moody’s Investor Service put the total US bond gap at 4.4 trillion. A few months ago, the conservative non-profit organization American Legislative Exchange Council estimated the black bond gap at almost 6 trillion dollars. That would be almost a third of the American gross domestic product, it had amounted to a total of 20.5 trillion dollars in 2018.

Pension Run

And the situation is getting worse. According to “RealInvestmentAdvice.com”, around 75 million baby boomers in America are currently retired or about to retire by 2030. That is about 26 percent of the American population. A gigantic pension crisis thus seems unavoidable. The crisis will break out when the next recession forces US pensioners to tap into their pension plans.

The Next Mortgage Muckle

And now of all times, when saving and trust in the financial market would be the order of the day, a smart mortgage bank is about to lure savers without sufficient creditworthiness into new loans. HousingWire, the Wisconsin-based Waterstone Mortgage Corporation, which specializes in the real estate market, reported that it is now lending mortgages to people without any credit history. Under the Non-Traditional Credit Program, financial receipts such as telephone bills, rent or electricity bills are to be used. The Consumer Financial Protection Bureau (CFPB) estimates that around 26 million Americans have no credit score. Ten years after the collapse of Lehman Brothers, Waterstone is again relying on extremely insecure borrowers. The only thing missing is that these shaky subprime loans are reappearing as alleged collateral in securitised bonds.

Countermeasures as a trader

So how do traders and investors defend themselves against the possible explosion of the American or even global pension bomb? Unfortunately, this is not possible at all. If the entire financial system collapses, the following will happen: Companies will lay off employees, states will save on investments, banks will tip over, businesses will close, money will be devalued. Then unrest breaks out, internal security collapses. In this case only weapons, barbed wire, bunkered food or vegetables from your own garden, petrol for a diesel generator and patience will help you. Perhaps gold and silver in small denominations to refresh supplies.
But a total crash doesn’t come overnight. In the months before, you can still earn one or the other Euro through short engagements, which you as a CFD trader then exchange for precious metal, for example.
The first signals would be the accumulation of bank bankruptcies: Most US pension funds are likely to have invested their accounts with local savings banks, i.e. savings and loans. If they are increasingly plundered, the small banks will tip over first. The big banks will follow, which would give us a new credit crunch, a freeze on the credit market. Retailers in particular would also feel the increased reluctance to buy before the crisis finally reaches Wall Street and then the world’s stock markets.
So let’s hope that the worst case doesn’t happen. We will keep you up to date!

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.