News

18.03.2019 – Daily report. The DAX remained just below the 11,700 mark in early Monday trading. The main topic in Frankfurt is the merger talks between Deutsche Bank and Commerzbank. A report on a delay in the Chinese-American customs agreement caused scepticism.

Banks at the Top of the Index

Brokers were delighted: Deutsche Bank shares were listed at the top of the DAX in early trading, while Commerzbank also recorded the strongest gain in the MDAX. On Sunday, the two banks announced the start of merger talks. The news did not really come as a surprise, but it is interpreted as a strengthening of the German banking centre. This was reason enough for the DAX to hold itsself on a high level- last week it peaked at over 11,700 points, its highest level since mid-October.

Newcomers to the MDAX

The new appointments to the MDAX will take effect as of today: Knorr-Bremse and Dialog Semiconductor are now included in the index of mid-caps. Salzgitter and Schaeffler had to be submerged in the SDAX for this purpose. In the DAX, everything remains the same.

Profits in Asia

In Tokyo, the Nikkei index defied negative economic news on Monday: the index gained 0.6 percent to 21,584 points. Japanese exports fell by 1.2 percent year-on-year in February to 6.38 trillion yen, or around 50 billion euros. This is a stronger minus than expected and the third in a row. Investors were overwhelmed by the joy at the announcement of new economic stimuli in China, which should also boost imports from Japan. The CSI 300 rose by 2.9 percent to 3,852 points.

Customs Agreement Probably Delayed

China and the USA put a small damper on the bulls: According to a report in the “South China Morning Post”, the customs agreement will probably be postponed until June. According to insiders, one obstacle is the security measures to ensure compliance with the agreement. Within US President Donald Trump’s team, there are differences of opinion. It remains to be seen whether there will simply be a basic agreement to be sold as a success, or whether effective monitoring measures will actually be implemented to control the Chinese.

According to media reports, the deal was initially to be signed at a summit in Mar-a-Lago, Florida, at the end of March. But the US ambassador to China, Terry Branstad, explained in the meantime that the meeting would be postponed by one month. Now it will be summer.

Correspondingly, the indication for the Dow Jones was recently about 0.2 percent lower at 25,817 positions. On Friday, the Dow recorded 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.

Decisive Oil Producers

Interesting news triggered from the oil market: The Russian oil minister Alexander Novak stressed in an interview with the television station CNBC in Baku that Moscow would fully support OPEC’s cuts in production in the coming weeks. The cartel and associated states will meet again in mid-April to review the cuts. At the beginning of the year, both sides had agreed to pump 1.2 million barrels less oil per day over a period of six months. So good arguments for a possibly rising oil price, the question is whether the US will take countermeasures.

Otherwise the week starts rather slowly from a reporting point of view. We will keep you informed.

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.

15.03.2019 – Daily report. The stock market can be as deceptive as a mirror-smooth lake before the thunderstorm: In early trading on Friday, the DAX was largely motionless. But it would be a miracle if the usual hectic to the big expiration day failed to appear this time. The first trading hours remaind calm because of the ongoing dispute over Brexit and the customs dispute between China and the USA.

Silence before the Storm

In the morning, the DAX oscillated slightly above the 11,600 mark. But that could only be the silence before the storm: At noon and in the evening, the Eurex futures and options exchange is facing the big quarterly decline. Futures and options on equity indices will initially expire on the so-called “Triple Witching Day”. At the close of trading, futures and options on individual stocks will expire. Since the DAX has oscillated between 11,500 and 11,700 over the past few days, this might likely be the limits of movement. Thanks to free real-time prices in your trading platform you can easily observe the movements.

Trouble in Asia for Wirecard

Wirecard had to endure a completely different kind of turbulence: According to a report in the “Handelsblatt”, the authorities in Singapore have set their sights on Wirecard’s Indian subsidiary. Investigations are underway against Wirecard employees and several companies of the Group on money laundering and document forgery, among other things.

Beijing Sets People into Buying Mode

The Chinese leadership sent even more pleasant news about the tickers: Prime Minister Li Keqiang brought new stimuli into play on Friday at a press conference at the end of the People’s Congress. Specifically, he thought out loud about lower interest rates and lowering the minimum reserve requirements for banks – it determines how much money credit institutions have to deposit as collateral with the central bank. He went on to say that China would not allow waves of redundancies. As a result, the Chinese blue-chip index CSI 300 gained 1.3 percent to 3745 points. In Japan, the Nikkei 225 climbed by just under 0.8 percent to 21,451 points.

Disillusionment in Customs Dispute

Wall Street was largely lethargic on Thursday. At the end of the trading session, the Dow Jones recorded a barely noticeable plus of 0.03 percent to around 25,710 points. The collective index S&P 500, on the other hand, fell by 0.1 percent to 2808 points. And the Nasdaq 100 fell by 0.2 percent to 7243 points.

The news that arrived was more of a show stopper: the number of new buildings sold had fallen surprisingly in January. On the other hand, the weekly initial applications for unemployment benefits increased more strongly than expected. According to news agency Bloomberg, the hoped-for customs agreement between China and the USA is unlikely to continue this month. US economic advisor Larry Kudlow thought it possible to reach an agreement by April at the weekend.

Perhaps today’s economic data will be able to bring some momentum into the trade: At 2.15 p.m. the Federal Reserve will speak on industrial production and at 3 p.m. the University of Michigan on the consumer climate.

New Pirouette at Brexit

And what’s going on with the British pound? The situation here has been defused for the time being. Yesterday, Thursday, the British MEPs voted to postpone the departure from the EU, which was originally scheduled for 29 March, by a maximum of three months. However, the House of Commons must agree to the final agreement with the EU by Wednesday. It is precisely this agreement that MEPs have already twice rejected. So it is clear that nothing is clear. But at least the tension remains. We wish 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.

14.03.2019 – Daily report. Tug-of-war between bulls and bears – and obviously the optimists gain the upper hand. The DAX is on its way up on Thursday. On the one hand, positive economic data from the USA initially supported the market on Thursday. On the other hand, negative figures from China were ticking over the screens. But for many investors this is only an indication that there must be a solution to the customs dispute. And then there is the seemingly endless story of Brexit. In plainwords: In a confusing situation, global trade still relies on solutions.

DAX Over 11,600 – Lufthansa with Disappointing Figures

Apparently the DAX has decided to go on a climbing tour. In early trading, it rose by 0.5 percent to 11,631 points. In the wake of the turbulences around Boeing, Lufthansa shares were listed at the end of the index. And, above all, weak quarterly figures caused the share price to plummet: consolidated net profit fell by 39 per cent to 343 million euros between October and December. The outlook was also disappointing: the planning for capacity growth in the summer was halved without further ado.

No-Deal-Brexit Rejected

Of course, the stock market also kept an eye on the currency market, specifically the British pound. On the one hand, the British do not want to leave the EU without a final deal, that is the core statement of the brief vote on Wednesday evening. On the other hand, Parliament has so far rejected all agreements. This is how standing still looks like. What comes next? A new vote, of course.

The British members of parliament will vote this Thursday on a postponement of the Brexit. Prime Minister Theresa May wants parliamentarians to decide between a short and a long postponement of the EU resignation. The precondition for an extension of the deadline: all 27 other EU Member States must agree to it. The planned exit date is 29 March. Until then, the volatility will at least remain stable, which might create chances for CFD traders.

China’s Economy Paralysed

In Asia, many brokers pressed the sell button on Thursday. The CSI 300 lost 0.7 percent to 3698 points. The Japanese Nikkei 225 closed with a loss of minimal 0.02 percent to 21 287.02 points, hardly changed. Skepticism was caused by news from China: Industrial production has grown more slowly since the beginning of the year than at any time in 17 years. The increase was only 5.3 percent. Domestic demand is falling, while the customs dispute with the USA is slowing down foreign trade.

US President Donald Trump also put a finger into the wounds: He was in no hurry to conclude a deal. An agreement should be in order, otherwise there will be none, Trump said in the White House on Wednesday. A little hint to Beijing.

Good Mood in New York

On Wednesday, Wall Street had closed in positive terrain. The Dow Jones rose by 0.6 percent to 25,703 points at the closing bell. The S&P 500 recorded a plus of 0.7 percent to 2811 points. And the Nasdaq 100 even advanced by 0.8 percent to 7257 points. In fact, the USA does not seem to need a deal in the customs dispute as urgently as China: orders for durable goods in the USA had risen surprisingly strongly in January, with forecasts showing a minus. In addition, construction spending climbed faster than expected at the beginning of the year.

All Important Data at Bernstein Bank

If you would like to know how the US economic data actually turned out, you can conveniently take a look on the Bernstein Bank website: Just follow the menu item “Research”. In addition to forecasts and current figures, you will also find the times of the expected publications. A small service from Bernstein Bank.

The top event on Thursday: At 1.30 p.m. German time the first applications for unemployment benefits in the USA are published. This could set the futures and the DAX in motion.

We wish 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.

13.03.2019 – Daily report. Things are getting serious for the British pound: After the recent defeat in the vote for British Prime Minister Theresa May, the chances of a chaotic Brexit have risen. Nervousness is spreading on the currency market. And there is also unrest on the stock market. Because the deadline for the British exit is 29 March. Since the exit is a novelty, it remains completely open how the pound will develop – so chart analysis is probably of little help.

Focus on Adidas and Wirecard

Investors in Frankfurt had to nibble at the recent Brexit debacle in the middle of the week: In early trading, the DAX fought its way up to 11,500 points, slightly below the close of the previous day.
In addition to the events in London, Adidas and Wirecard attracted attention – both shares led the list of losers. At Adidas, the outlook was particularly disappointing, although the sporting goods manufacturer raised its dividend. At Wirecard, a bizarre staffing caused unrest: on Tuesday evening, Wirecard had informed that the accounting manager responsible for Asia had been released. But the “Financial Times” meanwhile stated that Wirecard had “lost contact with the employee”.

Fear of the Chaos Exit

Nevertheless, the Brexit remained the main topic: on Tuesday evening the British parliament had again rejected the EU withdrawal treaty. The vote: 391 votes to 242. This increases the danger of a Brexit without a treaty shortly before Britain’s planned exit from the EU. This could result in severe economic slumps. London reacted in the meantime: As the government announced on Wednesday morning, customs duties on 87 percent of imports are to be abolished. In addition, customs controls at the border to Ireland are to be dispensed. The plan is to be valid for 12 months.
And the voting goes on: In the evening the parliamentarians have to decide whether Great Britain should leave the EU without a Brexit agreement or not. Investors are puzzling as to how things will continue. Volatility on the market can therefore be still guaranteed.

No Thrust from Overseas

In China, investors first took profits: The Hang Seng in Hong Kong lost 0.4 percent to 28,807. The Nikkei in Tokyo lost one percent to 21,290 points.
New York had shown no clear trend on Tuesday: The Dow Jones Industrial was pulled down by Boeing and closed 0.4 percent down at 25,555 points. The market-wide S&P 500, on the other hand, climbed 0.3 percent to 2792 points. And the Nasdaq 100 gained 0.5 percent to 7201. After all, at 7219 points, the high-tech index had reached its highest level in almost five months.
On Tuesday, the US Consumer Price Index (CPI) for February had made the exact forecast with a plus of 0.2 percent. The inflation rate in the USA thus fell in February to its lowest level since September 2016. This is likely to be confirmed by the Federal Reserve’s wait-and-see attitude towards interest rate hikes.

Who Suffers from China?

Let’s stay a little longer in forex trading, which is so important for CFD trading. And let’s take a look at China, where fears of a sustained economic slowdown have recently been cushioned by the announcement of new stimuli. The question is which economies could be pulled down in the wake of China. The answer: Australia and New Zealand. Both countries are reacting strongly to developments in China as it is the largest trading partner for both countries. So traders should keep an eye on these currencies.

Tension in Crude Oil

The same applies to the oil market: the oil price continued to rise on Wednesday. The reason: Saudi Arabia’s decision to cut production more than previously announced to support prices despite criticism from US President Donald Trump. The question is how US producers will respond. American production is currently at a record high. In the afternoon, new data on American production and oil reserves in the United States are expected.
Whether foreign exchange, stocks or commodities – the Bernstein Bank wishes you every success in 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.

12.03.2019 – Daily report. The German DAX wants to rise – and on Tuesday the music for the financial market plays in foreign exchange trading. Specifically: the British pound as apparently a chaotic Brexit might be avoided. A further push factor for the shares in Frankfurt is a strong Wall Street: The markets across the Atlantic ocean reacted to unexpectedly positive retail data. Above all, technology stocks were demanded.

A Slight Plus for the DAX Index

Up, up and away – but please with British understatement: The DAX took the 11,600 points in early trading. However, prices crumbled a little recently. After all, the 11,500 points acted as a support level. Among the German single stocks, brokers kept a close eye on the shares of VW, which had been hesitant recently.

Brexit Vote in London

All eyes are now on London: This is where the Brexit vote takes place today. A waving through in the House of Commons is by no means certain, because both Brexiteers and the Bremain Group could refuse approval. But in the renegotiations between Britain and the EU on the Brexit agreement, Prime Minister Theresa May has gained ground. One of the results oft he latest meeting is an extension of the deadline for a border regulation in Ireland – the so-called backstop. It will be extended until the end of 2020. Britain’s exit from the EU is actually planned for 29 March. So traders and investors should keep an eye on the news ticker: Any critical or favourable comments on the river Thames could stir up the pound. Not to mention the result of the vote.

Tech Rally in New York

New York equities had expanded their gains on Tuesday after a friendly start to trading. Above all, high-tech stocks such as Apple or Nvidia were in demand. The stock market close tot he Hudson river applauded the January figures for retail sales, which had been reported late due to the US shutdown: They rose by 0.2 percent, slightly better than the 0.1 percent forecast by analysts. More importantly, the buying mood is definitely returning, as can be seen from the downward revision of the December figure to minus 1.6 percent.

In a small rally, the Dow Jones finally closed 0.8 percent higher at 25,650 points – with Boeing’s sharp price losses slowing a stronger high. Nevertheless, the Dow ended a series of losses that lasted five days. The S&P 500 gained 1.5 percent to 2,783 points and the composite index of the technology exchange Nasdaq even rose by 2 percent to 7,558 points. By the way, a small gap between 7400 and 7,480 points seems to have formed here, which traders should keep an eye on as gaps tend to be closed.

The Principle Hope in China

Investors in Asia were also in a shopping mood: in Tokyo, the Nikkei index gained 1.8 percent to 21,503 points on Tuesday. The CSI 300 with the largest stocks in mainland China gained 0.7 percent to 3755.35 points. Investors are still waiting for a breakthrough in the trade dispute between the USA and China.

Investors either dazzled negative figures from the Chinese car market with their recent gains or took them as evidence that Beijing really needs a settlement in the customs dispute with the US. In February, Chinese car sales slipped almost 14 percent year-on-year. This was the eighth month in a row with a decline over the year. By the way, China is the largest automobile market in the world, and the industry is an important indicator for the entire economy. After all, the stock market is hoping for a buying boom in the future. Because in view of the not yet concrete stimuli of the Chinese leadership, many customers are currently holding back in order to take cash with them later when buying a car.

Frankfurt, London, New York, Shanghai – once again on Tuesday traders can see themselves confronted with a full range of interesting news on stocks, currencies and bonds.

The Bernstein Bank wishes you every success!

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.

05.03.2019 – Daily report. The DAX started trading weakly on Shrove Tuesday, but then continued to recover slightly. Wall Street, too, didn’t know what it wanted the night before: A strong start was followed by a small sell-off, which finally led to a recovery from the daily low. Once again, China set the pace on the news front in volatile trade – the economic locomotive had to slow down. After all, the leadership is taking countermeasures, as it announced at the National People’s Congress.

No Clear Direction in Frankfurt

After an early minus of around 11,575 points, the German benchmark index gained a slight gain of 0.3 percent to around 11,620 points, before trading sideways. The calendar is rather thinly filled: After the end of trading, Deutsche Börse will announce the composition of its stock indices. No changes are expected for the DAX. The following data arrives from the USA at 16:00 : ISM Purchasing Managers’ Index Services and Sales of New Houses December (forecast 619K).

Strangle Course in New York

There was also little stimulus from Wall Street – it almost seems as if the brokers in New York had read our market report yesterday and, as a precautionary measure, made cash. Apart from profit taking to avoid any disappointment in the Chinese-American customs dispute, there was little to be heard in New York as a reason for the interim sale. But wait: disappointing construction spending dampened the mood on Wall Street.

After all, the indices recovered from their daily lows. The Dow Jones closed with a minus of 0.8 percent at 25,820 points. The S&P 500 and Nasdaq 100, which had initially marked fresh annual highs in early Monday trading, also fell. The S&P lost about 0.4 percent to 2793 points in the end. The Nasdaq 100 nevertheless caught on and recorded only a minimal minus of 0.01 percent to 7151 points. In Tokyo, however, the Nikkei closed 0.4 percent lower in the morning at 21,726 points.

Cold Shower from Beijing

Once again China provided the news of the day – and it turned out to be in line with trading without a clear trend. Prime Minister Li Keqiang was unusually pessimistic at the start of the annual meeting of the People’s Congress: he forecast economic growth of 6.0 to 6.5 percent for 2019. This is the lowest growth target for almost three decades – so China urgently needs a deal in the customs dispute with the USA.

In an unusually concrete way for a communist cadre, the prime minister spoke in front of around 3,000 delegates, as everyone already knew: China’s trade war with the United States had had a negative impact on the “production and business of many companies as well as market expectations”. Li also spoke of “increased downward pressure” on the Chinese economy. In addition, the growth rate of consumption is slowing down, investments are lacking in “driving force” and the real economy is encountering “difficulties”.

China Supports the Economy

China announced tax cuts and higher infrastructure spending. In addition, companies are to receive loans more easily. Top stocks from mainland China have risen accordingly: The CSI-300 index gained 0.6 percent to 3816.01 points on Tuesday. The question remains as to whether China will meet its gigantic challenges.

Ticking Time Bomb

An interesting footnote: China Evergrande, China’s largest project developer, has just lowered the price of its real estate by 10 percent. The reason: poor sales in January and a threatening cooling of the market.

At this point we had already told you about a hardly noticed danger for the Chinese People’s Republic. According to a sensational study by Professor Li Gan from November 2018, around 50 million apartments are vacant – which accounts for around 22 percent of the total market. Gan teaches economics at Texas A&M University and is also Director of the Survey and Research Center for China Household Finance at Southwestern University of Finance and Economics in Chengdu, China. The vacancies and the ghost towns are a ticking time bomb: if the sell-out begins, the construction sector will go down on its knees. With unforeseeable consequences for the economy as a whole and the world’s stock markets.

So it’s worth paying attention to what’s happening outside the media mainstream in order to be prepared for surprises in the market.

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.

04.03.2019 – Daily report. New week, new support from China: The DAX continued its share price run on Rosemonday. According to a report in the Wall Street Journal, an agreement between Beijing and Washington is imminent. Driven by the unusually detailed article on the US-Chinese customs dispute, Germany’s leading index rose to 11,700 points in early trading, but then crumbled slightly.

Customs Dispute Allegedly before Breakthrough

The dominant topic on the stock market was once again China: The “Wall Street Journal” (WSJ) fired the buying mood on the world’s stock exchanges with a report containing so many details that it could only have been pierced by an official body. The financial blog “ZeroHedge” revealed details: According to WSJ, the negotiations in the customs dispute have reached a final stage. The talks had progressed so far that an agreement could be signed at a summit between US President Donald Trump and Chinese President Xi Jinping around 27 March, after Xi had visited Italy and France.

In concrete terms: Beijing should be prepared to lower its tariffs and other trade barriers for American agroculture-products, chemicals, cars and other goods. In return, the US should consider dropping most, if not all, of the sanctions against Chinese goods.

Furthermore, the People’s Republic is said to have promised to accommodate the USA in terms of foreign ownership rights to car ventures in China and to lower car duties for US cars below the current level of 15 percent. Furthermore, the Middle Kingdom is said to have agreed to buy American goods on a large scale. According to the WSJ, the purchase of 18 billion dollars worth of liquid gas from Cheniere Energy by the Chinese petroleum giant Sinopec could be a cherry on the cake, according to insiders.

State Corporations and Shadow Banks

But be careful: even the WSJ admits that there has been little progress on other issues. Westerners have always complained about the theft of intellectual property or the preference given to Chinese state-owned companies – for example through subsidies or the awarding of major contracts. No wonder: the red giants play a decisive role in the long-term plans of the communists for the country’s development.

This is another reason why analysts are eagerly looking forward to the National People’s Congress: the Mammoth-Parliament meeting with around 3,000 members will begin tomorrow in Beijing. One of the most important decisions there could be that Beijing instructs its shadow banks – i.e. all donors outside the official financial sector – to pump more credit into the economy. Which, of course, would generate new applause on the stock markets.

Asian Stock Markets are Picking Up

Meanwhile, investors in Asia have already taken a bold step: the Japanese Nikkei climbed by around 1 percent to 21,822 points. In China, the blue chip index CSI 300 rose by 1.2 percent to 3794 points.

Up, Up and Away in New York

In the USA, too, there have been signs of new profits recently: The future on the Dow Jones Industrial was 0.4 percent higher on Monday morning. Wall Street had already closed with a plus on Friday, even though prices had returned from their highs: At the closing bell on Friday, the Dow Jones Industrial only defended a gain of 0.4 percent to 26,026 points; in early trading it had advanced by almost 1 percent. The S&P 500 was down 0.7 percent to 2804 points on Friday. The Nasdaq 100 rose by 0.8 percent to 7152 points at the end of trading.

Since the Christmas low, Wall Street has thus completed a splendid rally: Since then, the Dow Jones Industrial has risen by 20 percent. The S&P 500 even climbed by around 21 percent, the Nasdaq Composite even jumped by 25 percent.

So the question remains whether the latest rally was based solely on hopes in the customs dispute. If disappointments arise here or if the stock market players decide to take profits on a large scale, then the bears will once again have the say on the floor. 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.

01/03/2019 – 12:00: Fasten your seat belt, please: The DAX has completed its short consolidation phase and is on a high flight. In early Friday trading, the German benchmark index reached a new high for the year. The reason were positive news from the stock markets in China. The US-Chinese customs dispute was once again the focus of attention. But that wasn’t the only explosive charge that provided thrust.

DAX at 11.650 Points

The DAX climbed to 11.650 points on Friday morning. Brokers referred to the currently high liquidity of large fund companies – they receive fresh money on the first day of the month, which is usually reinvested immediately.

Happy News from the Red Dragon

Market observers marked news from the news agency Bloomberg as the top news of the morning: According to this, a trade agreement between the United States and China is virtually ready to be signed. We are curious to see whether the world’s two largest economies will now deliver.

But that wasn’t all – a 180-degree turn to the negative news of the previous day drove investors to buy. After the surprisingly gloomy sentiment data of large Chinese state-owned corporations on Thursday, the business magazine “Caixin” now followed up: The index for medium-sized private companies in the manufacturing sector, which the magazine published, rose surprisingly significantly to just under 50 points. Values below 50 indicate a contraction, with figures above this indicating an expansion of activity.

And the index operator MSCI also put a smile on the faces of the Chinese bulls: The weighting of Chinese A-shares in the MSCI Emerging Markets Index will more than quadruple, increasing from currently 0.7 percent to 3.3 percent in the future.

Poor Economic Figures from Beijing

The Chinese Purchasing Managers Index shows that an agreement between Washington and Beijing would urgently be needed: In February, the PMI fell to 49.2 points, its lowest level since the beginning of 2016. In December, this important leading indicator in the world’s second largest economy fell below the critical threshold of 50 points for the first time in two years, suggesting a contraction in industrial activity.

Investors in Asia are on the Buy Side

It’s no wonder that there was a buying mood in Asia. The CSI 300 index with the 300 most important stocks of the Chinese mainland climbed by 2.2 percent to around 3750 points. This week the index rose by 6.5 per cent, and since the beginning of the year the rally has totalled 25 per cent. In Japan, the Nikkei 225 rose by around 1 percent to 21.603 points on Friday.

Wall Street Optimistic Again

Recently, of course, all of this has also put US investors in a good mood: the futures on Dow Jones and S&P 500 each rose by 0.4 percent on Friday morning. The contract on the Nasdaq 100 even rose by 0.6 percent.

A nice reversal to the losses of the previous evening: On Thursday, the Dow Jones Industrial recorded a minus of 0.3 percent at 25.916 places at the closing bell. In February, however, there was a gain of 3.7 percent. The S&P 500 also fell by 0.3 percent to 2784 points on Thursday. And the Nasdaq 100 also lost 0.3 percent to 7098.

Important Publications on Friday

At 2.30 p.m. German time, personal US income and consumption are on the agenda, followed at 4 p.m. by construction spending and the ISM purchasing manager index. In addition, Fed Chairman Powell will lecture on recent economic developments and long-term challenges at the “Citizens Budget Commission 87th Annual Awards Dinner” in New York. Perhaps an important half-sentence will escape him. Otherwise, of course, the US-Chinese customs dispute will move the markets.

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.

28/02/2019 – 12:00: The German stock market players are also initially spiritless on todays start of German carnival. The DAX recently oscillated once again just below the 11,500 mark in the minus. As an argument for the lethargy, on Thursday stock market participants used the failed summit between the USA and North Korea. This, along with a harsh economic warning from China, led to sales on the Asian stock exchanges in particular. Wall Street, too, had previously presented itself in a mixed state – the bulls are waiting for execution in the US customs dispute with China.

Zalando Fires a Rocket

In early trading hours, the German leading index lost up to 0.6 percent to 11.416 points, but at least it worked its way up again. Only Zalando in the third stock exchange league spread a little party mood. The share price rose by 17 percent, while the online fashion retailer performed surprisingly well in the final quarter of 2018. The Berlin-based company reported the strongest quarter-on-quarter growth in active customers in five years. Good news for the share price, which was highly volatile last year.

North Korea is Now Important Alongside China

The disappointment in Frankfurt was also caused by the summit between US President Donald Trump and the North Korean ruler Kim Jong Un – Trump left the meeting in Vietnam with the comment that sometimes you just have to leave. There was no result, not even a planned joint declaration.
China was again the focus of investors: US chief negotiator Robert Lighthizer dampened hopes of a quick settlement. He wants to ensure that this time the People’s Republic adheres to the agreements it has reached. The trade dispute could not be resolved by import promises from Beijing for US goods alone. In addition, American media speculated about possible differences of opinion between Trump and Lighthizer.

Poor Economic Figures from Beijing

The Chinese Purchasing Managers Index shows that an agreement between Washington and Beijing would urgently be needed: In February, the PMI fell to 49.2 points, its lowest level since the beginning of 2016. In December, this important leading indicator in the world’s second largest economy fell below the critical threshold of 50 points for the first time in two years, suggesting a contraction in industrial activity.

The Pound is Rising

The traders also looked at the British pound, which had recently made up ground due to a possible Brexit shift. Prime Minister Theresa May paved the way for a postponement of the EU withdrawal if the treaty does not find a majority. This would prevent chaos on 29 March, but the hanging game would continue.

Fed on Hold

For the dollar, Fed Chairman Jerome Powell initially provided no impetus. At his half-yearly hearing before the US Senate Banking Committee, he was hesitant. The reasons were weaker economic data and increased uncertainty. In other words, no interest rate hikes are planned for the time being, but they are possible. In view of the cooling global economy, most analysts currently see this as rather unlikely.
And what else is happening on Wednesday? First, Fed Chairman Powell will address Congress once again. At 4 p.m. German time, the EU Business and Consumer Surveys are scheduled, which should have an influence on shares from the EuroStoxx 50 and the Euro.

Asia Stock Exchanges in Bad Mood

Too much disappointment is leading to mental wounds. As result prices on the Asian stock markets have been falling for the time being. In China, the CSI 300 index with the 300 blue chips of mainland China fell by 0.3 percent to 3669 points. In Tokyo, the Nikkei index lost 0.8 percent to 21,385 points. However, the South Korean Kospi recorded the strongest losses with minus 1.8 percent to 2195 points.

Missing Support from New York

The day before, Wall Street had already delivered no real arguments for purchase. The Dow Jones index closed Wednesday 0.3 percent lower at 25.985 points; after all, it had made up some ground during the trading session. The market-wide S&P 500 lost 0.1 percent to 2.792 points. Only the Nasdaq Composite rose by 0.1 percent to 7.554 points.
On a day without really important planned events the hope for good economic data from the USA remains: The gross domestic product is announced for today’s Thursday at 1.30 p.m. – at the moment the calendars are all a little mixed up because of the US shutdown – becomes interesting for Wall Street and the dollar. We 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.

27/02/2019 – 12:00: Waiting is Trump, pardon: The trump, on the Frankfurt Stock Exchange: The DAX presented itself in early Wednesday trading with slight losses below the 11,500 mark. Without new, positive news in the Trade War between China and the USA, the momentum was lacking recently. Especially since there was disappointment in the quarterly figures. Meanwhile, traders are looking at the oil market and the British pound.

Beiersdorf Disappointed – Bayer Pleased

On Tuesday, the DAX closed at a new high for the year at 11,540 points after slight initial difficulties – and this was the sixth consecutive day of gains. On Wednesday, however, Beiersdorf was disappointed – the share fell by almost 10 percent in early trading: The consumer goods group expects slightly lower earnings growth this year than in 2018. The Nivea manufacturer also expects a slower pace of sales growth.
Bayer, on the other hand, supported the leading index with a profit of over 3 percent: Ebitda rose by almost 16 percent to around EUR 2.1 billion in the fourth quarter thanks to the acquisition of Monsanto. However, the bottom line was a loss of a good EUR 3.9 billion (prior-year period: plus EUR 148 million). In the final quarter, sales climbed by almost 29 percent to around EUR 11.1 billion.

No Clear Direction in New York

The New York Stock Exchange did not give the German stock market any boost on Wednesday. The Dow Jones bid farewell to the closing bell with a slight minus of 0.1 percent at 26,058 points. The S&P 500 also fell by around 0.1 percent to 2794 positions. Only the Nasdaq 100 worked its way up by 0.1 percent to 7123 points.
It was heard from the floor that Washington and Beijing would finally have to deliver after all the advance praise in the Trade War. But since US President Donald Trump is currently seeking to join forces with North Korea in Vietnam, little news in the Chinese-American dispute is to be expected in the near future. In addition, U.S. economic data was only half bearish on Tuesday. The US housing market continues to weaken, as the unexpectedly sharp decline in construction started showing in December. However, consumer sentiment brightened surprisingly in February.

The Pound is Rising

The traders also looked at the British pound, which had recently made up ground due to a possible Brexit shift. Prime Minister Theresa May paved the way for a postponement of the EU withdrawal if the treaty does not find a majority. This would prevent chaos on 29 March, but the hanging game would continue.
Fed on hold
For the dollar, Fed Chairman Jerome Powell initially provided no impetus. At his half-yearly hearing before the US Senate Banking Committee, he was hesitant. The reasons were weaker economic data and increased uncertainty. In other words, no interest rate hikes are planned for the time being, but they are possible. In view of the cooling global economy, most analysts currently see this as rather unlikely.
And what else is happening on Wednesday? First, Fed Chairman Powell will address Congress once again. At 4 p.m. German time, the EU Business and Consumer Surveys are scheduled, which should have an influence on shares from the EuroStoxx 50 and the Euro.

OPEC Quite Relaxed

Traders in the crude oil market look from 16.30 German time on at the change of the US storage quantity with crude oil. Meanwhile, OPEC reacted to a Twitter demand from Donald Trump not to apply the production brake too much. Saudi Energy Minister Khalid al-Falih said in an interview with CNBC that OPEC would remain cautious. The 25 states are taking a cautious approach and are particularly interested in the stability of the market. In December of last year, the cartel states and associated countries had agreed to reduce production.

Air War in Kashmir

Otherwise, the situation in Kashmir worsened: Pakistan reported on Wednesday that two Indian fighter jets had been destroyed. The day before, Indian planes had attacked Pakistani territory for the first time since 1971 to attack a terrorist training camp. Pakistani jets are also said to have carried out air strikes in Indian Kashmir. The situation remains confusing – and could quickly escalate.

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.