News

28.03.2019 – Daily report. It is clear that nothing is clear: The Brexit drama goes into the next act. But the DAX won’t be deterred by this – the index posted slight gains on Thursday morning. While the international stock market was predominantly calm and many brokers are waiting for news on the Chinese-American Trade War, a big spectacle is looming in the currency market. The next few days could be exciting for the Turkish lira.

Moderate Plus for the DAX

Slight movement in German equities: The DAX has risen to 11,500 points, which at times meant an increase of a good half a percentage point. Real market-moving news was scarce at first, but US economic data is only due in the afternoon. The situation was hardly any different in global trading either.

Waiting for the Customs Agreement

Asia had suffered losses on Thursday. Economic worries pulled the Nikkei down in Tokyo by 1.6 percent to 21,034 points. In China, the CSI 300 lost 0.4 percent to 3728 jobs. The principle of hope remains: today, talks between US Trade Representative Robert Lighthizer and Finance Minister Steven Mnuchin with Chinese officials were scheduled for today. News in theTrade War should move the markets.

Wall Street Resigns

The evening before, waiting had also been the dominant theme in New York. At the closing bell, the Dow Jones fell by 0.1 percent to 25,626 points. The market-wide S&P 500 even lost 0.5 percent to 2805 positions yesterday (Wednesday). The Nasdaq 100 fell by 0.6 percent to 7308 points. The inverse yield curve already mentioned here caused skepticism: three-month US bonds continue to offer a higher yield than ten-year bonds. This is seen as a warning signal for a recession.

Brexit Chaos without End

The foreign exchange market is currently far more exciting than online stock trading. Initially, the British pound is facing new performances in the political theater. Because the parliament in London proved itself incapable for a direction decision. Yesterday evening the House of Commons rejected all eight alternatives for Prime Minister Theresa May’s deal with the EU. May had even offered her resignation for approval of the treaty. This looks very much like a political twilight of the gods. In other words, let us prepare ourselves for a change of government.

Showdown in Turkey

The most exciting piece is currently performed in the Turkish lira. First Ankara had initiated an investigation against JPMorgan, which last Friday had attracted the anger of the autocracy. The major US bank warned that the lira would crash after the March 31 local elections because the country’s banks would then stop burning forex reserves to support the lira. The analysts set the price target at 5.90 lira for the dollar, while on Friday the lira was quoted at 5.76 lira.
Now it was currency traders’ turn: the cost of the lira’s overnight swap rate exploded from 25th to 27th March to the fabulous rate of 1338 percent. The overnight loan of the lira thus virtually froze over. In the short term, the politically desired short squeeze was successful, the Turkish lira recovered strongly against the euro (6.26 lira) and the dollar (5.56).
But the performance is likely to be expensive in the long run. If long investors can’t protect themselves or only at a high price and have to fear to be burned with such a smut show, then there is the possibility that these investors might withdraw from their investments sooner or later. If in a capitulation of the long side the curtain should fall, this could become the really interesting challenge for Ankara. Especially since nothing has changed in the homemade reasons for the decline of the Turkish economy: Inflation, economic crisis, lack of confidence. So keep an eye on this exciting market!

This is What Thursday Brings

Otherwise, a lot of economic data is coming up today. For traders in dollars, bonds and stocks it will be particularly exciting at 1.30 pm. Then the data for the American gross domestic product will be shown on the screens. The forecast is plus 2.6 percent. At the same time, initial applications for unemployment benefits are received. If the figure is far above the forecast 220,000, the markets are likely to react with horror. Finally, the pending house sales for February are reported at 3 p.m. – forecast: plus 0.4 percent. We wish you a very successful day trading!

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.

27.03.2019 – Daily report. The rise to new price peaks is a tough business for the Frankfurt Stock Exchange. After initial gains, the DAX is now trading in the red, and risk aversion persisted on Wednesday morning. Federal bonds were in demand for this. The factors ECB and Brexit were responsible. After all, hope germinated for the upcoming round of talks in the US-China Trade War.

The DAX is Trapped

Slight losses in Frankfurt: After an early plus at noon, the DAX has returned to the south. In the meantime, it slipped by around 0.4 percent to around 11,380 points. A small hint for chartists: the DAX is currently trapped between the 200- and 50-day lines. It toasted at the upper 200 mark six trading days ago and fell. On the lower 50 line, the index turned up again two days ago. Traders who trade CFD professionally will now naturally shake their heads. Such simple indicators should be meaningful?!? Never… Apparently they are – if enough investors follow them. We are curious, how it will continue. If trading in this narrow range continues, the DAX will have to make a decision about its direction in the coming week. Either a breakout upwards or downwards. Of course you can trade both with CFD.

Fear of Risk

Meanwhile, investors increasingly parked capital in federal bonds. And they are even paying the federal government money for this. The yield on ten-year German government bonds slipped from minus 0.014 percent to minus 0.048 percent – the lowest for two and a half years. The skepticism received new food from ECB boss Mario Draghi: At a speech in Frankfurt on Wednesday he indicated, as usual in a veiled manner, that the turnaround in interest rates could be postponed further in the event of a stronger downturn in the economy. The central bank is observing a deterioration in demand from outside the euro zone, he said at the conference ‘The ECB and Its Watchers XX’.

Slight Gains in Asia

German investors had previously received a little push from Asia. The Nikkei in Tokyo closed 0.2 percent lower at around 21,379 points. In China, however, the blue chip index CSI 300 climbed by 1.2 percent to 3,743 points. Here the anticipation of an expected customs agreement between China and the USA was building up again: US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin are scheduled to travel to Beijing for further talks tomorrow, Thursday.

Wall Street Rises Moderately

Behavior was the tailwind for Frankfurt also from New York. Wall Street had closed in positive territory on Tuesday. However, prices had crumbled. The Dow Jones, for example, said goodbye with a gain of around 0.6 percent at around 25,658 positions. The S&P 500 gained 0.7 percent to 2818 positions. And the Nasdaq 100 recorded a plus of 0.5 percent to 7351 points. The private market research institute Conference Board reported little positive news: in March, the mood of US consumers had become surprisingly gloomy. The start of construction in February had also fallen more sharply than forecast. You can find all concrete data as a service of the Bernstein Bank here to read if you scroll down a bit: https://bernstein-bank.com/de/research/#Market

Tension in the Oil Market

Of course you can also use our collection to prepare your trading day. For example, today at 3.30 p.m. you will find an interesting event in the oil market: The Energy Information Administration (EIA) reports the stock level in the USA. The question is how the US producers will react to the reduction in OPEC production. At the beginning of the year, the cartel and its allies had agreed to cut daily production by 1.2 million barrels a day in order to support the price of oil. The Saudis, in particular, have made an open secret of the fact that they are letting their pumps rest more than the rest in order to raise the price of oil to 70 dollars a barrel. The sheikhs are afraid of national bankruptcy. According to estimates by the International Monetary Fund, Riyadh even needs a price of 80 to 85 dollars a barrel.

New Brexit Loop

Wednesday’s Never Ending Story on the Brexit may provide new impulses for forex trading. The British Parliament will discuss alternatives to the Brexit deal with the EU by Prime Minister Theresa May during the day. In London, rumors had recently spread that the Prime Minister would offer her resignation to the hardliners among the Brexiteers if there were approval for the Brexit deal with the EU. So please keep an eye on the pound. And be patient. But let us be lenient in the face of the drama: such a huge step does not happen every day, even politicians have to learn. We wish you a successful day trading!

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.

26.03.2019 – Daily report. So much for the hoped recovery: The German stock market continues to crumble. Spoiler alert, following slight pre-IPO gains, the GfK consumer climate index ruined the party. It was worse than expected. The targets from overseas were also mixed. Investors are now eagerly awaiting the coming economic data from the USA.

GfK Index Disappointed

In early Tuesday trading, the DAX plunged to 11,300 points, but then recovered slightly. But the counter-movement was not really convincing for the bulls. The poor mood of German consumers, captured in the consumer climate index of the Gesellschaft für Konsumforschung (GfK), caused a meagre mood in Frankfurt. In March, the indicator reached 10.4 points, one of the lowest values in the past two years, as GfK announced on Tuesday morning. And a drop of 0.3 points since February. The forecasts were particularly disappointing, with a slight increase to 10.8 points.

Mixed Targets from Asia

It was also necessary to wait and see because of the overseas requirements. Investors in Asia had not set a clear trend in the morning. Although the Nikkei rose by 2.2 percent in Tokyo to the closing level of 21,428 points, the Nikkei was unable to hold its own. Above all, companies with strong exports were in demand, as the yen fell again. By contrast, the CSI 300 in China lost 1.2 percent to 3,697 points. Here, investors are waiting for news on the US-China tariff agreement, just as we are.

New York Wavering

The German shares had received no support from the New York stock exchange. Wall Street stabilized after the recent losses, but nothing more. The Dow Jones gained a minimal 0.1 percent to 25,516 points. The S&P 500, on the other hand, lost 0.1 percent to 2,798 positions. The Nasdaq Composite also lost 0.1 percent to 7,637 points.

Recession Signal from US Bonds

A strong headwind for equities blew over from the US bond market: At 2.375 percent, the yield on ten-year US government bonds fell to its lowest level since 2017. This has further intensified the reversal of the yield curve – three-month bonds yield more than long-dated bonds. The inverse yield curve is seen as a signal of recession, which the Federal Reserve is also observing.

An Ugly Divorce

Meanwhile, the Brexit turbulence continues and the volatility in the British pound should be the only thing certain in the coming days. Which in turn speaks for professional trading with the best German CFD brokers. The parliament de facto deprived Prime Minister Theresa May of her power. Although only for one day, the loss of authority cannot be overlooked. Against the will of Downing Street 10, the House of Commons now wants to discuss alternatives to the Brexit agreement on Wednesday. May immediately stressed that the government did not feel bound by the upcoming vote. The divorce from the EU is thus developing into a political war of roses, with an uncertain outcome.

This is What the Day Brings

Now we are eagerly awaiting the coming economic data. At 1.30 p.m., the US building permits for February will be issued via the ticker. The forecast here is 1.32 million. After that the consumer confidence of the Conference Board for March arrives at 15.00 hrs. Forecast: 132.0. We are watching Wall Street’s reaction with interest and wish you a very successful day with your CFD trading!

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.

25.03.2019 – Daily report. A recovery in the ifo index supported the DAX on Monday morning. The DAX initially slipped to just over 11,300 points, but then climbed slightly. Will that be enough to finally dispel the global fear of recession? There is also the threat of turbulence from the UK: There, the unfortunate Prime Minister Theresa May could be overthrown by her own cabinet. So be sure to keep an eye on your regular market updates.

Ifo Supports the DAX

Finally, a small ray of hope for German equities: the mood in the German economy brightened surprisingly in March. The ifo business climate index rose from 98.5 points in the previous month to 99.6 points. The forecast had been 98.7. The DAX rose slightly after the publication. However, it did not make any real headway. No wonder, because in the past few days a small depression has spread on the world’s stock markets. Gold was in demand. In addition, investors fled into ten-year German government bonds. Their yield was still below zero at minus 0.009 percent. Investors are thus paying the federal government money so that they can borrow something from the state.

German Fear in Asia

Fear had already kept the Asian stock markets under control on Monday: In Tokyo, the Nikkei index fell by a whopping 3 percent, closing at 20,977 points. The strength of the yen caused a sensation – the Japanese currency is a sought-after safe haven in times of crisis. In China, the CSI 300 fell by 2.1 percent to 28,496 points with the 300 most important stocks on the Chinese mainland. The starting point for the most recent slide was the German purchasing managers’ index on Friday, which was far worse than expected. By the way: “fear” is one of the few words from the Germans that have been translated into English.

Recession Signal Sinks Wall Street

This was joined on Friday by an American panic factor. For the first time since 2007, the interest rate on ten-year US government bonds fell below that on three-month money market paper. This is an early indicator of a recession. This is because investors prefer to park their money for zero or mini interest with the state in the long term rather than invest it in the short term. Risk appetite looks different. Wall Street closed in the red: the Dow Jones Industrial lost 1.8 percent at 25,502 points. The S&P 500 lost 1.9 percent to 2801 positions on Friday and the Nasdaq 100 fell 2.2 percent to 7326 points. Since the Fed announced on Wednesday that it would not be raising interest rates again this year, fear of recession has been making the rounds on the trading floor.

High Noon in London and Ankara

And what else is going on on the financial market? The music plays mainly with the foreign exchange. In Turkey, the lira is still staggering down. Surely you already noticed the preference of Turks for gold. The yellow metal is on the one hand a popular bridal jewelry, on the other hand a good insurance against the depreciation of the domestic paper currency. Turkey had condemned US President Donald Trump’s call for the Golan Heights to be awarded to Israel and warned of a new crisis in the Middle East.

Trump himself has one less worry, which Wall Street could be pleased about: The US special investigator Robert Mueller has found no evidence in his investigations of a conspiracy between the US president and Russia in the 2016 election campaign.

On the Thames, a cheerful political Western is about to begin its Brexit investigation. According to a report in the Sunday Times, eleven ministers want to overthrow the hapless Prime Minister Theresa May this Monday. Turbulence is therefore inevitable in the British pound – so please keep an eye on the news. Otherwise, it is questionable whether there can still be a contractual solution before the official EU withdrawal date of April the 12th is postponed. We wish you a successful day with your 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.

25.03.2019 – Weekly report.That’s how fast it can go: First the DAX had reached a high of several months in the previous week. Then on Friday there was sudden concern about a recession. The reason was an extremely poor purchasing managers’ index from Germany. Plus a bad omen from the American bond market. Prices on the Frankfurt stock market slipped into a deep hole. And things did not look any better in New York either. Whether the bulls will gain the upper hand again this week also depends on the ongoing issues of Brexit and the US-China Trade War. And, of course, from the abundant economic data.

EMI Pushes the DAX over the Cliff

In Frankfurt on Friday, fear of the economy caused the DAX to shrink. Immediately after the arrival of the Purchasing Managers’ Index for Germany (EMI), prices plummeted. The EMI fell to 44.7 positions in March. This was the lowest level for six and a half years, according to IHS-Markit. In February, the indicator had still been at 47.6. The forecasts for March had been 48, which would have meant a slight recovery.

As Wall Street plunged, German equities continued to decline. In the end, the DAX went into the weekend with a minus of 1.6 percent at 11,364 points. On balance, this meant a weekly loss of 2.7 percent. On Tuesday, the index had reached a new high since October. Strong volatility – a paradise for anyone who trades professionally with CFDs and can react quickly. But please only with a bank with a Bafin license!

Fear of Recession in New York

The week before also ended on the US stock exchange with a clear victory for the bears. The Dow Jones Industrial came out Friday with a minus of 1.8 percent at 25,502 points. This was almost the lowest point of the day. On a weekly basis, the leading US index recorded a loss of around 1.3 percent. The S&P 500 lost 1.9 percent to 2801 positions on Friday and the Nasdaq 100 fell 2.2 percent to 7326 points. Brokers in New York cited the frightening data from Germany as one of the reasons for Friday’s sales, and Nike also reported weak figures.

Inverse Yield Curve

Furthermore, the bond market sent out a warning signal: For the first time since 2007, the interest rate on ten-year US government bonds fell below that on three-month money market paper on Friday. The reversal in the yield spread is normally an early indicator of a coming recession over the next year and a half.

Monday – US Currency Guard and ifo Index

So it’s no wonder that investors will be paying particular attention to what monetary policymakers are saying in the coming week. Charles Evans, head of the Chicago Fed, will speak in the US on Monday, as will Eric Rosengren (Boston Fed) and Patrick Harker, head of the Philadelphia Fed.

It will be exciting before Monday at 10.00 a.m. German time – then the ifo Business Climate Index for Germany will be published. If you read these lines, you will certainly know more. The index had previously stood at 98.5 points.

Tuesday – Consumer Climate and US Consumer Confidence

The GfK Consumer Climate for Germany arrives at 08:00 on Tuesday in April. The previous value was 10.8.

At 1.30 p.m., the US building permits for February will be issued via the ticker. The forecast here is 1.32 million.

Consumer confidence on the part of the Conference Board for March then arrives at 15.00 hrs. Forecast: 132.0.

Wednesday – Draghi Speaks

In the morning, journalists will analyze in detail the words of ECB President Mario Draghi. The Lord of the Money will be speaking at a conference entitled “The ECB and Its Watchers” in Frankfurt from 9.00 a.m. onwards.

At 15.30 commodity traders will look at the stock report of the State Energy Information Administration (EIA). Previously the stock had fallen by 9.589 million barrels.

Thursday – US GDP and Unemployment Figures

It will be particularly interesting for traders in dollars, bonds and stocks on Thursday at 13.30 hrs. Then the data for the American gross domestic product will appear on the screens. The forecast is plus 2.6 percent.

At the same time, the first applications for unemployment benefits are received. If the figure is well above the forecast 220,000, the markets are likely to react with horror.

Finally, the pending house sales for February are reported at 3 p.m. – forecast: plus 0.4 percent.

Friday – Retail Sales and University of Michigan

Yen traders get their money’s worth Friday night: At 00.50 German time, retail sales in Japan are reported in February. Forecast: plus 1.1 percent.

Retail sales in Germany are also expected for February. At 8 a.m. we know whether the figure of 3.3 percent has been exceeded.

Finally, at 09.55 the German authorities report the change in unemployment in March. The last figure was minus 21,000.

The British gross domestic product for the fourth quarter is due at 10.30 a.m.. Previously it had been plus 0.2 percent.

At the end of the week, three potentially price moving data arrives from the USA. First, the Chicago Purchasing Managers’ Index for March is due at 2.45 pm. Forecast: 57.0.

Shortly thereafter, consumer confidence at the University of Michigan in March runs on the screens at 3 pm. Forecast: 97.6.

Also at 15.00 o’clock the US sales of new houses are to be announced in February. Forecast: 617,000.

Brexit-Coup and New Customs Round

But that’s not all. Away from the predictable dates, the constant hits Brexit and the Trade War USA-China remain exciting.

On the one hand, there is the threat of a small coup in the cabinet in Great Britain. According to a report in the Sunday Times, eleven ministers want to overthrow Prime Minister Theresa May on Monday. Turbulences in the British pound are thus inevitable.

Meanwhile, the talks in the American-Chinese Trade War are to be continued in Beijing starting Thursday. The US delegation with Trade Representative Robert Lighthizer and Finance Minister Steven Mnuchin will meet Deputy Prime Minister Liu He. We are eager to see whether Wall Street can expect good news from China. We wish you a successful week on the stock exchange!

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.

22.03.2019 – Daily report.A hard blow for the DAX: An extremely negative purchasing managers’ index for the manufacturing sector (EMI) in Germany has pulled the leading index out of its slight profit zone and into the red. The DAX has just crossed the 11,600 mark. The fear of a recession suddenly began to circulate. Investors fled to the safe haven of German government bonds: On Friday, the yield on ten-year securities was below zero percent again for the first time since October 2016.

EMI Sinks the DAX

A little deep rush in Frankfurt: Immediately after the publication of the EMI, the DAX plunged and touched the 11,460-point mark. This meant a minus of 0.8 percent. The online real-time prices you posted on your trading platform probably suddenly turned deep red. No wonder: The preliminary EMI fell to 44.7 places in March. The index thus reached its lowest level for six and a half years, according to IHS-Markit. And in February the indicator had still been at 47.6. Most forecasts for the subindex had been 48 for March, which would have meant a slight recovery.

Pessimism in Industry

So business is bad. As the reason for the pessimism, the market researchers cited precisely those topics that traders on the stock market are also repeatedly preoccupied with: Brexit chaos, the US-China Trade War, the weakness of the German automotive industry and the general decline in global demand. The most recent Fed decision and the Brexit shift in particular have at least partially clarified and defused two important issues.

Profits in New York

The liquidity aspect came to the foreground on the American floor after the Fed’s decision on Wednesday. As a result, investors were more optimistic on Thursday. The Dow Jones recorded a plus of 0.8 percent to 25,963 points at the closing bell. In the course of trading, the leading index had briefly crossed the 26,000 mark several times. The market-wide S&P 500 finally rose by 1.1 percent to 2,855 points and the Nasdaq 100 even rose by 1.5 percent to 7,493 points.
On Wednesday, the US Federal Reserve had announced the end of its balance sheet reduction. From the end of May, it will buy further US government bonds for 15 billion US dollars – per month. A lot of money will thus flow into the financial market. This year, the Fed probably does not want to raise the key interest rate any more.

Wait and See in Asia

There was little movement on the Asian stock markets. Japan’s leading index, the Nikkei, closed 0.1 percent at 21,627 points. The Tokyo indicator thus rose by 0.8 percent over the course of a week. The Chinese blue-chip index, CSI300, took off unchanged into the weekend at 3,835 points.

Brexit on Hold

In the forex market, investors continue to look to the British pound. The Brexit drama in the Cable is now going into prolongation. The EU is now offering London a postponement of the exit from the international community until 22 May. However, under one condition: The British House of Commons should now accept the withdrawal agreement, which has already been rejected twice, in the coming week. So, the tension in this drama remains with us. In the meantime, however, many investors are asking themselves what would be so bad about a Brexit without a contract – managers and politicians have been preparing to leave since the vote in June 2016.

US Real Estate in Focus

Whether the German benchmark index and global trading will be back in the black on Friday is also due to data coming in from Wall Street in the afternoon. For example, the sales of existing houses for February arrive at 15.00 hrs. The forecast is at 5.1 million after 4.94 million in the previous month. We wish you much success with your trading!

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.

21.03.2019 – Daily report. Amazement at the Federal Reserve: What exactly were the US monetary authorities trying to tell us yesterday? The fact that interest rates are not to be raised for a while was initially received positively. But most recently, concerns have grown that the economic situation in the USA is worse than feared. The Fed is stepping on the brakes harder than expected. And a cold shower of customs treaties between China and the USA also ensured that many brokers in global trade first pressed the sell button.

Losses in Frankfurt

Downward on the stock market: The DAX started Thursday’s trading down, the German benchmark index held below 11,600 points. The index thus picked up the ball from the overseas stock markets. The Fed, in particular, threw the Frankfurt stock market off track a little: investors first had to analyse the mysterious and contradictory news from the previous evening in more detail.

Fed Steps on the Brake

More than most augurs expect, the Federal Reserve is slowing the pace of interest rate hikes. In concrete terms, the US Federal Reserve is initially discontinuing the tightening of monetary policy it began at the end of 2015. The Fed also wants to stop the reduction of its trillion-dollar balance sheet that began in autumn 2017. As expected, the monetary authorities left the key interest rate in a range of 2.25 to 2.50 percent.
The total victory for the doves: this year the Fed will probably not raise the key rate again, but only once next year. Fed Chairman Jerome Powell stressed the virtue of patience. From the economic data neither the reason to raise nor to lower interest rates can be deduced. The Fed also warned against a slowdown in the US economy: the situation on the job market is still strong. However, economic growth had weakened. The increase in consumer spending and investment had slowed.

Irritation in New York

The situation around the Fed caused little buying mood in New York. What had initially brought joy to Wall Street quickly turned into scepticism. After the Fed’s decision, the Dow had even turned positive before the economic worries returned. The Dow Jones closed Wednesday down 0.6 percent at 25,745 points. The S&P 500 fell by 0.3 percent to 2,824 points. Only the Nasdaq Composite rose by a minimal 0.1 percent to 7,728 points. No miracle: Young Hightech companies need urgently favorable credits, in order to grow. So the interest rate outlook is particularly positive for them. Financial stocks, on the other hand, suffered, banks and insurers are being held back by low interest rates.

Hard line in the Customs Dispute

The White House also threw a stick between the bull’s legs. US President Donald Trump told reporters in the White House that customs duties on Chinese goods would probably remain in place for quite some time. First of all, it had to be ensured that China would stick to a deal. The supporters of the hard line in the negotiating team have thus apparently asserted themselves. According to media reports, US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin plan to travel to China next week for the next round of negotiations. Of course, this is another reason why you need to keep an eye on your regular market updates.

Concerns in Asi

Needless to say, the recent topics in the customs dispute did not lead to price gains in Asia either. The CSI 300 in China closed almost unchanged at 3,837 points. There is no news from Japan: The stock exchange in Tokyo remained closed due to a holiday.

What is Todays Economic Data?

Another interest rate decision is pending: The news of the Bank of England will run from 1 p.m. on the ticker, the forecast is 0.75 percent. At 1.30 p.m. the Philly Fed index for March should move prices on Wall Street. The average forecast is 3.2 after -4.1 in the previous month. The indicator shows the economic development in the Philadelphia region. We wish you every success in trading!

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.

20.03.2019 – Daily report. A bitter blow for the Frankfurt Stock Exchange on Wednesday: Bayer stock plunged in the double-digit range, with the DAX heavyweight pulling the leading index down. Otherwise, investors are largely motionless on the sidelines. In the evening the Federal Reserve takes the floor.

DAX below 11,700 Again

Not a nice day for the bulls: The DAX started early Wednesday trading with a minus of 0.9 percent, so the index dropped back below the 11,700 mark with a drop to 11,678 points. The previous day, the index reached 11,823 points, its highest level since last October. Most stocks were largely inconspicuous, with little movement overall. Which shouldn’t bother you when you trade CFD, because then you can also use small swings thanks to the leverage.

Bayer Loses in Double Digits

Only one share stood out in the DAX: Bayer. The stock fell by 12 percent at times. At almost 7 percent, Bayer is one of the heavyweights in the DAX. The Bayer Group suffered a defeat in a subtrial of its U.S. subsidiary Monsanto over possible cancer risks of the glyphosate-containing weed killer Roundup. The San Francisco jury unanimously concluded on Tuesday that Roundup was a “significant factor” in the development of a plaintiff’s cancer. This could therefore be expensive for the Bayer Group, which wanted direct market access for itself with the purchase of Monsanto, but certainly no legal disaster. In the next phase of the lawsuit, the question of the amount of damages will be clarified.

Hardly Any Movement in Asia

In Asia, investors moved sideways on Wednesday morning. The Chinese blue chip index made up for temporary losses and closed unchanged at 3,835 points. The Japanese Nikkei index climbed slightly by 0.2 percent to 21,609 points. Of course, investors’ hopes continued to revolve around the rapid conclusion of a tariff agreement between China and the USA. That was not what it looked like in the end. Now the “Wall Street Journal” reported with reference to insiders that next week a high-ranking US delegation will travel to Beijing. The goal is an agreement by the end of April.

New York without Direction

Brokers in the USA had already waited for today’s big Fed event on Tuesday. The Dow Jones Industrial fell slightly into late trading and closed 0.1 percent lower at 25,887 points. The market-wide S&P 500 was almost unchanged at 2833 points. In contrast, high-tech stocks in the Nasdaq 100 rose by 0.3 percent to 7349 points. Overall, there was therefore no clear line in New York.

Everything is Waiting for the Fed

No wonder, because nobody wants to position themselves on the wrong side before the big news. Hardly any broker expects the Fed to take an interest rate move. Investors are particularly interested in the US Federal Reserve’s projections. These were last presented in December: At the time, the Fed had signaled three further interest rate hikes by the end of 2020. Most analysts assume that this forecast will now be reduced to one or two rate hikes. So this evening at 7 p.m. German time it will be exciting. Otherwise, the day will deliver few really moving dates. At 15.30 o’clock the US data to the crude oil stocks in the USA over the screens.

New Brexit Loop

Meanwhile, traders are waiting in the British pound of things in Brexit tug-of-war. According to media reports, the hapless Prime Minister Theresa May wants a postponement of the resignation by three months, actually planned for 29 March. She wants to send a letter to Brussels. In the meantime, she wants to bring a final agreement through parliament. We look forward to seeing what happens next and wish you every success with your 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.

19.03.2019 – Daily report. The DAX started Tuesday with a stable plus of more than half a percent to a new annual high. Despite a new, bizarre turn in the Brexit chaos. Notwithstanding a rather weak news situation. All eyes in global trading are on the Federal Reserve. And the unanimous opinion is that it will not raise interest rates tomorrow. Let’s wait and see whether the advance praise will be justified.

DAX Reaches New Annual High

A broker rarely sees his trading platform so calmly when a new summit is climbed: The DAX climbed to 11,737 points. It was just last Friday when the German benchmark index climbed to its annual high of 11,725 points. At the bottom of the DAX, the Deutsche Bank share held its own, with many investors first taking profits. The bank is considering a merger with Commerzbank.

5G Auction

The auction of 5G mobile radio frequencies has started in Mainz, Germany, and will be interesting for the shares of the telecommunications industry. 5G is regarded as the next technical revolution in the Internet age, because the transmission rate is about 100 times faster than LTE. This reduces latency times to zero, which means that there are hardly any delays in the transmission of images and voice. Which in turn is the prerequisite for what some experts believe to be the telephony of the future: Holographic images that are transmitted at the same time as the sound via telephone glasses in front of the eyes. Such technology already exists in the military for pilot helmets.

Asia Inconspicuous

Asia did not provide a boost for the German stock market. The Nikkei was largely unagitated: the leading Japanese index of 225 stocks lost barely noticeable 0.1 percent to 21,566 points. In China, the CSI 300 fell by around 0.5 percent on Tuesday. The index contains the 300 most important shares of the Chinese mainland – i.e. not the independent province of Taiwan, which Beijing regards as a renegade province.

US Equities in Positive Territory

Wall Street made some gains on Monday: The Dow Jones Index closed the day up 0.3 percent to 25,914 points. The S&P rose by 0.4 percent to 2,833 points. And the Nasdaq Composite gained 0.3 percent to 7,714 points. By the way, oil prices were particularly strong yesterday. At this point, we reported to you on the Russian shoulder-to-shoulder agreement with OPEC in terms of production cuts.

Everyone is Waiting for the Fed

The Fed had been the big topic in New York. In the USA, the two-day meeting of the Fed’s Open Market Committee will begin today, and news about the interest rate decision will arrive tomorrow. So far, the monetary authorities had announced three further hikes in the key interest rate until the end of 2020. Due to the weaker economy, analysts expect only one to two rate hikes. In December, the Fed raised the key rate to between 2.25 and 2.5 percent. Investors are paying particular attention to indications as to how far the Fed could even loosen its course in order to support the economy. The US order intake for January at 3 p.m. German time today provides an indication of this. The forecast amounts to -0.5 per cent.

Chaotic Days in London

Meanwhile, a new Brexit vote is probably off the table for the time being: President John Bercow only wants to allow a vote if the substance of the motion has been changed. He referred to an old law from the 17th century. But the vote actually planned for today should once again include the proposal to approve the withdrawal treaty with the EU, which has already been rejected twice. This will keep the tension on the british pound.
Please keep an eye on your news ticker – the situation is changing extremely fast.

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.

18.03.2019 – Weekly report. This will be the trading week of the central banks: three interest rate decisions will probably bring a lot of movement in the financial market. The Federal Reserve, the Swiss National Bank and the Bank of England are appearing in front of the press. Against this backdrop, not only the US dollar, the Swiss franc or the British pound could move, but also equities and government bonds. With the British Brexit theater, another long runner is directing our attention towards the foreign exchange market.

Starting Basis Annual High

First of all the review of the events at the end of last week: On Friday’s triple witching day, the DAX presented a ride toa new years highr. At the end of the triple witching day, the German benchmark index was up 0.9 percent at 11,686 points. The weekly gain was thus around 2 percent. At its peak, the DAX had even managed to reach 11,725 points, before the decline in futures in the afternoon pulled the index down again.

Wall Street is Celebrating

In the evening, the stock market bulls extended the party. After a weak start at the closing bell, the Dow Jones Industrial marked a plus of 0.5 percent to around 25,849 points. The US leading index thus gained almost 1.6 percent over the course of a week. The market-wide S&P 500 went into the weekend on Friday with a plus of 0.5 percent at 2822 points and the Nasdaq 100 rose by 0.9 percent to 7307 points.

No Reason for Interest Rate Hikes

By the way, trading in New York on Friday was initially slowed by bad economic news: the Empire State Index from New York fell by 5.1 points to 3.7 points, according to the regional central bank. This is the lowest level since May 2017, with forecasts pointing to an increase to 10.0 points. But: This gives the Federal Reserve new arguments to keep its feet still. In other words, not to raise interest rates for as long as possible. Especially since US industrial production climbed by only 0.1 percent in February, analysts had forecast a plus of 0.4 percent.

Inspiring China

The news that the Chinese government wants to lower the value-added tax from April 1 in order to boost private consumption created a good mood. In addition China wants to pass an investment law that is supposed to bring more fairness to foreign companies and investors. Specifically, the National People’s Congress approved a law on Friday that is to come into force on 1st January 2020. Foreign companies are to be granted securitised rights. For example, forced technology transfer is to be prohibited in the future.

Two completely different things are to be right and to get right – and of course the Chinese courts are dancing to the tune of the communists. Nevertheless, this is a concession towards the USA. Hopes have thus returned that the customs agreement between America and China will finally be adopted in the near future, which, as things stand at present, is not expected until April.

Bank Merger Ahead

Investors should keep an eye on German financial stocks this week: Deutsche Bank and Commerzbank are now starting formal merger talks. The two largest German private banks announced this move on Sunday.

Tuesday will be exciting for German bonds and equities: At 11.00 a.m. the ZEW will announce its economic expectations for Germany in March. The forecast is -14.0 after -13.4 before.

At 3.00 p.m. German time, new orders from the USA are due for January. The forecast is -0.5 percent.

Brexit Again and Again

Also on Tuesday, according to the latest press releases, the British House of Commons should vote again on the resignation treaty negotiated by Prime Minister Theresa May with the European Union. After two rejections, however, approval is hardly considered realistic, which is why May is apparently considering a rejection of the vote. Most analysts now consider a hard Brexit to be probable. If accepted, the British would have to file an application for an extension in the aftermath of the EU summit on Thursday.

Thus anglophile investors direct on Wednesday at 10.30 o’clock the views on the consumer price index for January, the prognosis lies with 1,9 per cent.

Tension on the Oil Price

Oil market traders should pay close attention to regular market updates due to the threat of NOPEC legislation: If, contrary to expectations, the US Congress adopts the “No Oil Producing and Exporting Cartels Act”, OPEC will be threatened to leave – and then all ex-members of the cartel could increase oil production to the maximum, Suhail al-Mazrouei, the oil minister of the United Arab Emirates, threatened, according to press reports in a meeting with bankers. A crash in the oil price would destroy US oil shale producers because banks would then no longer lend them any money.

In keeping with this, the US data on crude oil stocks in the USA will be displayed on Wednesday at 3.30 pm.

FED Speaking

Finally on Wednesday evening at 7 p.m. German time things will get exciting: The US Federal Reserve Chairman Jerome Powell will comment on American monetary policy. A rate hike of the current 2.5 percent is currently regarded as extremely unlikely – in the meantime the first brokers are even discussing rate cuts.

SNB and Bank of England

Finally on Thursday at 09.30 the Swiss franc will come into view: The forecast for the SNB’s interest rate decision is -0.75 percent.

British retail sales for February are also scheduled for Thursday at 10.30 a.m.. According to forecasts, this will amount to 0.2 per cent after 1.0 per cent in January.

Of course, the Bank of England will also discuss the domestic economy in its press conference on the interest rate decision. The interest news will be available from 1 p.m. on the ticker, the forecast is 0.75 percent.

At 1.30 p.m. the Philly Fed index for March should move prices on Wall Street. The average forecast is 3.2 after -4.1 in the previous month. The indicator shows the economic development in the Philadelphia region.

On Friday at 09:30, brokers will look at the Manufacturing Purchasing Managers’ Index for Germany in March. The forecast: 50.3.

In the afternoon the music will play again in the USA at 3 p.m.: Then the sales of existing houses will be announced for February. The forecast is at 5.1 million after 4.94 million in the previous month.

We hope that this extensive range of financial market events also includes the right thing for you – and wish you every success in trading!

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.