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26/02/2019 – 12:00: Let’s take it nice and easy: After a weak end to trading on Wall Street and profit taking in Asia, the DAX posted a minus in early Tuesday trading. The day seems particularly interesting for forex traders: the Brexit could move the pound, Fed Chairman Jerome H. Powell is likely to focus on the dollar. And astonishing things have also happened on the oil market.

GfK Supports DAX – BASF Reports Figures

First of all, let’s wait and see what Frankfurt will give us: The DAX oscillated in negative territory on Tuesday morning and settled just below the 11,500 mark. The DAX received slight support from the Gesellschaft für Konsumforschung (GfK): The institute predicted that consumer sentiment would remain high and therefore published a consumer climate value of 10.8 points for March, unchanged from the previous month. BASF, the world’s largest chemical company, cushioned weak figures with an increased dividend. The distribution is to increase by 10 cents to 3.20 euros per share. Earnings after taxes and minority interests fell by almost 23 percent year-on-year to 4.7 billion euros in 2018.

New York is Slowing Down

Wall Street was slightly positive on Monday – once again the hope for a solution to the Chinese-U.S. Trade War had initially provided a tailwind. However, prices crumbled in late trading. At the closing bell, the Dow Jones thus managed to save only a slight gain of 0.2 percent at 26,091 points. The daily high had been around 150 points higher. The S&P 500 gained 0.1 percent to 2,796 points and the Nasdaq Composite Index gained 0.4 percent to 7,554 points.

Profit Taking in Asia

In Tokyo, the Nikkei index lost 0.4 percent to 21,449 points. In China, the CSI-300 index fell by 1.2 percent to around 3685 points. The day before, the index with the 300 most important stocks on the Chinese mainland had gained around 6 percent. This was not only the largest daily gain since 2015. The index has now also regained the level of June of last year. The Chinese Securities and Exchange Commission (SEC) put a damper on the index – it warned of a speculative bubble. This could mean that it intervenes in stock exchange trading.

What Does the Fed Want?

Otherwise, on Tuesday the (monetary) policy will remain important for traders. US Federal Reserve Chairman Jerome Powell is to address the Financial Services Committee of the US House of Representatives. Stock market analysts expect Powell to gradually raise interest rates in an economic boom. The report in Congress will continue on Wednesday.

Brexit Pickaxes

Meanwhile, the tug-of-war over the Brexit continues, bringing the British pound into focus. The Labor Party has now demanded a second Brexit vote. Sure: Vote until the result fits. Prime Minister Theresa May is also considering postponing the Brexit date to prevent a disorderly withdrawal, according to a media report.

Trump Lowers Oil Price

Meanwhile, US President Donald Trump launched his own economic stimulus package via Twitter. The POTUS – President of the United States – briefly lowered the price of oil, leaving consumers with more money in their pockets. Trump criticized the OPEC cartel, twittering that oil prices were rising too high and that OPEC should “relax”. Simply loosening things up does not apply to traders in this exciting market.

Smoldering Conflict on the Roof of the world

And what else should you keep an eye on? For example, a potentially extremely dangerous conflict that the mass media in this country hardly have on their screens – the tensions between the nuclear powers India and Pakistan. India has just flown an air raid on its neighbor. A new level of retaliation, apparently for a suicide bombing in Indian Kashmir that cost 40 soldiers their lives. The militant group Jaish-e-Mohammad, based in Pakistan, assumed responsibility for the attack on 14 February. The dispute over the predominantly Muslim region, which is largely occupied by Hindu India, has been simmering for years. If the Kashmir conflict escalates nuclearly, there is a threat of a global stock market earthquake. Stay vigilant!

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.

25/02/2019 – 12:00: Here we go: US President Donald Trump has extended the ceasefire in the Trade War with China after all. On Sunday, Trump announced on Twitter that he would postpone the increase in US punitive tariffs, which will take effect on 1 March, to Chinese imports. This fulfilled the latest hopes of investors, who now of course want more. In accordance to the Chinese equities setting off for a leap of joy, also the DAX wants to go up on Monday morning – it marked a new high for the year.

DAX Conquers New High for the Year

That’s how nice the beginning of the week is for the stock market cops: In the first few minutes of trading, the DAX climbed above the striking barrier of 11,500 points and gained 0.6 percent to 11,529 positions. He then made progress towards this mark. The balance of the past two weeks is therefore impressive, with an increase of just under 6 percent.

Stock Exchange Party in China

The corks popped in China: The CSI300 blue-chip index and the Shanghai Stock Exchange index climbed by more than 5 percent. The Japanese Nikkei ended trading somewhat more cautiously with a plus of 0.5 percent at 21,528 points. Of course, Japanese stocks with strong business ties to China were in demand.

Hole-in-One in Florida

Trump announced a 90-day delay in punitive duties. The US President also announced another summit with Chinese President Xi Jinping and that an agreement would be reached at the Mar-a-Lago Golf Club in Florida if both sides made further progress. He did not mention a date, but according to the US television station CNBC, the end of March is announced. Not a bad idea, he said – finally undisturbed entertainment in the great outdoors. And by the way, push the world’s stock markets for a moment.

Applause on Wall Street

No wonder US futures were also trading in green territory on Monday. At the end of last week, Wall Street had already celebrated the latest developments in the China dispute. For the first time since November, the Dow Jones Index surpassed its stubborn resistance at 26,000 points on Friday. The leading index closed 0.7 percent higher at around 26,032 points. The Nasdaq 100 advanced by as much as 0.9 percent to 7091 points, and the S&P 500 left with a gain of 0.6 percent at 2793 points. Technology stocks such as Apple and Microsoft were particularly in demand on Friday.

Way to Ruin the Party Covestro

The stock market players are thus hoping for a fresh boost for the world’s stock markets and a fresh cure for the global economy through a settlement of the Trade War. Only a few concerns remained in Frankfurt with regard to the German automobile industry because of possible special customs duties in the USA.
The plastics manufacturer Covestro was also not really positive. On Monday, the DAX Group reported a 67 percent decline in earnings to 293 million euros for the fourth quarter. Sales also shrank. The reasons: Stronger competition and increased logistics costs. For 2019 as a whole, the Group had further negative effects in store.
In Europe, the economy will otherwise be looking to Barcelona from Monday onwards, where the trends in the technology sector will be presented at the Mobile World Congress.

Nervous Flutter at the Pound

Nervousness is rising in the currency market about the British pound. According to a report in the Guardian, the European Union is considering postponing Britain’s withdrawal from the EU for two years. Such a hanging game could of course be a challenge for traders in the “Cable”. Actually, the Brexit is scheduled for March 29th and Prime Minister Theresa May recently confirmed several times that she wants to keep this deadline. But there will be no vote in the British Parliament this week on the Brexit agreement negotiated between May and the EU. However, the vote on the next Brexit steps on Wednesday in the London Parliament will remain. Before that, May will make a statement in the House of Commons on Tuesday. Therefore, foreign exchange traders could need strong nerves.

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.

25/02/2019 – Weekly: New week, same game: China in particular is moving courses. Will the USA and the Middle Kingdom end the Trade War or not? The positive signals are accumulating, and the coming days will be particularly exciting for Wall Street and the DAX in view of the ceasefire that is actually coming to an end. A second mega topic is on the agenda in the currency market, as Fed Chairman Jerome H. Powell will speak before the Congress.

Praise from Wall Street

Investors in New York were already giving praise to the potential imminent China deal: For the first time since November, the Dow Jones index overcame its stubborn resistance at 26,000 points. The leading index closed 0.7 percent higher at around 26,032 points. On a weekly basis, the index posted a plus of 0.6 percent – the ninth weekly gain in the past nine weeks. The Nasdaq 100 even advanced by 0.9 percent to 7091 positions, which is also the ninth weekly gain in a row. The market-wide S&P 500 bid farewell on Friday with a gain of 0.6 percent at 2793 points – the eighth white weekly candle was on the horizon in nine weeks.

DAX Climbs Upwards

The DAX had also achieved a plus on Friday. Although the Friday gain of 0.3 percent to 11,457 points does not seem very impressive at first, the DAX had a positive effect on Friday. However, the German benchmark index closed just under the three-month high. At times, the leading index also managed to break above the 11,500 mark, suggesting a breakout from the latest sideways range. The first investors are already looking again at a sustained conquest of the December highs at 11,550 to 11,600 points.

Optimism in the Trade War

Investors were encouraged by the meeting between US President Donald Trump and Chinese Vice Prime Minister Liu He. Trump told journalists at the Oval Office that there was a deal with China on currency manipulation, but he did not give any details. Washington accuses Beijing of undervaluing the yuan to boost exports. The likelihood that there will be an agreement is now higher than the likelihood that there will be none, Trump added on Friday evening after the talks. Liu He also spoke of “clear progress”: China was prepared to make great efforts to reach an agreement. Trump added that he would probably meet China’s head of state Xi Jinping in Florida in March.
And it gets even better: As the US channel CNBC reported on Friday, Beijing agreed in the negotiations to buy goods worth up to 1.2 trillion dollars from the United States. That’s a nice stimulus package. And, of course, a boost for Wall Street, but also for the shares in Shanghai.

Yuan, Soy and Copper in Focus

Further positive news: The Middle Kingdom wants to buy an additional ten million tons of soybeans from the USA, as US Secretary of Commerce Wilbur Ross twittered. The US farmers are pleased, agricultural traders are looking at the contract. In addition to soya, a tariff agreement for copper is also likely to bring further movement, as the production of electrical appliances of all kinds is likely to pick up with a revival of bilateral trade – and the red gold is processed in cables. China is the world’s largest consumer of this industrial metal. No wonder that the price of copper has been rising for about seven months now.
So, all this looks as if the USA will extend the ceasefire and not increase the punitive tariffs for Chinese goods worth 200 billion dollars from 10 to 25 percent on 1 March. Apparently, the talks had made sufficient progress to justify the delay, so it was said. More and more experts on the stock market believe that the US will not increase its punitive tariffs at all in view of the increasingly dripping positive news.
And thus, the fall height rises with a disappointment, particularly since the support of the Chinese state-owned enterprises and the technology theft remain important, last still important open points. A “sell the fact” could also possibly occur, as the recent recovery of Wall Street since Christmas has been largely driven by hopes of an agreement with China. Only one thing is clear at the moment: every half-sentence from the negotiations will move the stock market strongly.

National Activity Index, BASF and Bayer

Otherwise, analysts on and off the big media stage keep an eye on the following events: On Monday evening at 7.30 p.m. German time the National Activity Index will start, which should move both the US stock indices and the dollar pairs. The index is calculated by the Chicago Fed and provides a monthly assessment of the general economic activity and inflationary pressure in the United States.

For retail and food stocks the wholesale turnovers become interesting on Monday, they are announced 15.00 o’clock American east coast time.

On Tuesday, German investors will focus their attention on the balance sheet of the DAX heavyweight Bayer. BASF will also present its figures. On the same day, traders who invest in DAX and German shares will again look at the GfK consumer confidence index, which is to be reported at 1 p.m.

Fed Chairman Powell in Front of Congress

It will be particularly interesting from Tuesday, 16:00 Central European Time: US Federal Reserve Chairman Jerome Powell will address the Financial Services Committee of the US House of Representatives. The Lord of the Dollar will explain his monetary policy and thus potentially move the Greenback, but also US bonds and Wall Street. Stock market participants expect Powell to continue the monetary policy strategy of its predecessor Janet Yellen and gradually raise interest rates in an economic boom. The report in Congress will continue on Wednesday.
Also, on Wednesday at 16:00 German time, the EU Business and Consumer Surveys are scheduled, which should have an influence on stocks from the EuroStoxx 50 and the Euro.

Traders in the crude oil market look on the same day from 16.30 o’clock of German time at the change of the US storage quantity with crude oil. Small footnote: According to a report by the Ministry of Energy, the USA was the first country ever to crack the production mark of 12 million barrels per day. US production has thus more than doubled since 2013, so the USA has made itself independent of any blackmail by the OPEC cartel thanks to fracking and cross-drilling. And, by the way, entire regions have been led into an economic boom.
The gross domestic product of the USA on Thursday at 13.30 local time will be interesting for Wall Street and the dollar.

And on Friday, the top currency guardian will again take action – with possible effects on everything and everyone. In other words: Dollar, Wall Street, US bonds, world stock markets. At the Citizens Budget Commission 87th Annual Awards Dinner in New York, Fed Chairman Powell talks about the latest economic developments and long-term challenges. You can assume that journalists will also be present.

So, we are once again facing an interesting week on the stock markets, in which it seems clear that apart from volatility, little is guaranteed.

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.

21/02/2019 – 12:00: On Friday morning, the DAX oscillated slightly above the 11,400 mark, reaching a new high for the year after all. However, activity was largely frowned upon recently. Domestic impulses and news from overseas were rather scarce. These were joined by setbacks on Wall Street and radio silence in the Trade War between China and the USA.

Focus on Ifo and Wirecard

Hardly any movement in Frankfurt: On Friday morning, the DAX listlessly dragged itself around 11,400 points, a sustained breakout above this level would signal the end of the latest sideways range. Already on Thursday the trading volume had been rather low. At its peak, the German benchmark index climbed by up to 0.4 percent to 11,467 points – after all, this is the highest level of the still young stock market year.
The Ifo Business Climate Index disappointed. Brexit worries and the fear of penalties for German cars in the USA are causing pessimism. The index fell to 98.5 points in February, its lowest level since December 2014. German managers also expect little for the coming six months: The subindex of business expectations slipped to 93.8 points.
Wirecard put itself into the spotlight once again with this interview: After the latest price fluctuations, Group CEO Markus Braun said in a conversation with the “Frankfurter Allgemeine” that he expects the share price to recover as soon as the allegations of allegedly incorrect booking of sales have been finally cleared up.

Hardly Any Impulses from Overseas

The Nikkei index fell by 0.2 percent to 21,425 points. And Wall Street had also provided few arguments for buying on Thursday: At the closing bell, the Dow Jones Index recorded a minus of 0.4 percent at around 25,851 points. The S&P 500 also fell by around 0.4 percent to almost 2,775 points. The composite index of the Nasdaq technology exchange also lost 0.4 percent to just under 7,460 points.
The economic data collected seemed to be rather food for the bears. Although the US labor market continues to show unbroken strength, the economic situation is still very positive. However, the business climate in the Philadelphia region deteriorated considerably more in February than analysts had forecast. Orders for durable goods also disappointed in December. And finally, industrial buyers in February were also more cautious than forecasted.
By the way, in New York, the Nasdaq Composite is currently very interesting: while the Dow and S&P 500 are already trading a bit above the 200-day line, the high-tech indicator is just holding onto it. So, the companies from Silicon Valley & Co. look like an anchor that slows down the market as a whole – no wonder, because growing companies are particularly dependent on low interest rates and the cheap production of components, which brings us back to the subject of China.

Shadow Boxing in the Trade War

In the trade negotiations, experts are rubbing their eyes in amazement: according to reports from the US television channel CNBC, Washington is demanding what Beijing supposedly wants anyway – a fixed yuan. There is a theoretical possibility that Beijing will devalue the renminbi at some point in order to boost exports. In fact, US President Donald Trump complained last July that the yuan was falling like a stone. And yes, 2018 was a difficult year for the Chinese economy, so there was a great temptation to devalue it.
But analysts told CNBC that the Middle Kingdom wants a strong currency in the future. No wonder, because the “chuppys” – Chinese urban professionals – would not forgive the communist cadres for a sustained slump in purchasing power. The Chinese middle class is enjoying the seemingly endless economic upswing once initiated by Deng Xiao Ping, as you can easily see from the imports of Swiss luxury watches, Scottish whisky and Bordeaux, which have been booming for some time now, albeit with small dents.
Let’s wait and see whether news will stir up the market here, which can happen very quickly. Meanwhile, talks between the US and China have continued at a high level in Washington. Otherwise, ECB President Mario Draghi will be appearing in public. The ECB’s chief monetary officer is unlikely to make any official statements on behalf of the ECB during his speech at the University of Bologna, where he will be awarded an honorary doctorate. But who knows, a small hint on the future of European monetary policy could slip between the lines.

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.

21/02/2019 – 12:00: The Bulls are making a run for it – but clearly got repelled by important resistance lines. First, the DAX attempted to break out of its sideways range on Thursday morning. Even the Dow Jones did not make it past an important barrier on Wednesday evening. In addition, performance on the Asian stock markets was mixed. The topic of the day is once again the hope for an agreement in the Trade War between China and the USA. Here are the positive news across the screens.

DAX Targets 11,400 Points

On the Frankfurt floor, there has recently been a widespread hope that the German benchmark index will now leave its short-term sideways trend for good. The stock market players have their sights set on the 11,400 mark. After an early high of 11,470 points, however, the DAX fell back.
Deutsche Telekom’s figures caused little stir – the Group continues to benefit from the upswing of its US subsidiary. Deutsche Telekom reported a 5 percent year-on-year increase in earnings before interest, taxes, depreciation and amortization to EUR 23.3 billion in 2018, adjusted for non-recurring effects. However, profit fell by more than a third to EUR 2.2 billion; a year ago, a billion-dollar special income from the U.S. tax reform had caused the cash register to ring. Henkel delighted investors with the announcement of the highest dividend in the company’s history. The consumer goods group intends to pay a dividend of 1.85 euros per preferred share. Even though, last year sales shrank minimally, and operating profit rose only slightly.

Dow Fails at 26,000 Points

Wall Street had shown itself cautious on Wednesday: The Dow Jones index ended the day with a slight gain of 0.2 percent at 25,954 points. No wonder that the Dow failed against the barrier of 26,000 points: at the beginning of December last year, the leading US index had not managed to cross this hurdle – the share price slid by more than 4000 points. And stock market players don’t forget anything. The market-wide S&P 500 also made progress on Wednesday by 0.2 percent to just under 2,785 points. And the Nasdaq Composite closed with a barely noticeable gain of 0.03 percent at 7,489 points.
In Japan, the Nikkei index advanced by 0.2 percent to 21,464 points on Thursday – the fourth consecutive day of gains for the Japanese leading index. However, the Shanghai and Shenzhen stock exchanges each fell by just under half a percent.

Fed Apparently Holding Still

According to the minutes of the most recent interest rate meeting, the Fed is uncertain about the future price; however, in the Fed’s covert speech it appears that the central bank does not intend to raise interest rates for the time being. Low interest rates are water on the mills of the stock market.

New Hope in the Trade War

Latest news from China are giving the bulls from the stock exchange some nutrition: According to media reports, the talks that have been underway for months to settle the Trade War are moving forward. According to insiders, Washington and Beijing are working on declarations of intent regarding the most important US demands on the People’s Republic, such as patent rights or agricultural products. The negotiators have also drawn up a list of measures under which Beijing will reduce its trade surplus with the US.

Economic Data from the USA

To look out for on Thursday: in the afternoon at 2.30 p.m. a bunch of economic data could move Wall Street and the Frankfurt Stock Exchange, but also currencies and bonds. The new orders for durable goods, the indices of the Philadelphia Fed and especially the first orders for unemployment assistance in the USA will be reported. The Purchasing Managers’ Index for the manufacturing sector will also follow at 3.45 p.m.. As always, particularly disappointing or gratifying figures are likely to cause high volatility.

What to Focus on with Oil

At 5 p.m. the EIA (Energy Information Administration) will report the change in the storage volume of US crude oil, specifically the status of the West Texas Intermediate lead location. This could open up interesting opportunities for WTI, petrol futures and US equities in the energy sector.
Behind the scenes there is another drama with oil: the US Congress is currently forming the front line for the so-called NOPEC legislation. This is intended to punish the members of the OPEC cartel up to the expropriation of US assets if they manipulate the oil price upwards. On the Hill, the project was repeatedly postponed in order to not burden relations with Saudi Arabia. But since the Khashoggi murder Riyadh has gambled away considerable credit. Trump has also attacked OPEC several times on Twitter with a view to his voters because of high gasoline prices.
As you can see, the day once again offers a lot of opportunities.

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.

20/02/2019 – 12:00: It’s getting serious now: In the customs dispute between China and the USA, Beijing has decided to take out their torture’s weapons. After all, US President Donald Trump had previously sent out conciliatory signals – and negotiations are continuing. Thus, the DAX was in positive territory in early trading. Fresenius and FMC also put the bulls in a good mood. Wall Street had not sent out any impulses before.

Stagnation on Wall Street

The New York Stock Exchange had remained skeptical on Tuesday. In the course of trading, the Dow Jones had reached its highest level since the beginning of December. But then the prices crumbled, and the Dow recorded a gain of only 0.03 percent to 25,891 points at the closing bell. On Monday there was no trading in the USA because of Presidents’ Day. S&P 500 closed Tuesday with a gain of 0.2 to 2780 points. And the high-tech index Nasdaq 100 also advanced by 0.2 percent to 7067 positions.

Focus on Fresenius in Frankfurt

Meanwhile, the DAX was up by 0.7 percent to 11,390 points in early Wednesday trading. Fresenius and FMC outperformed: Despite difficulties in the clinic business and at its dialysis subsidiary FMC, the Fresenius health care group increased sales and net income slightly more than expected last year. FMC is also creating a buying mood with a share buyback program.

China Warns the USA of the Global Crash

But the Chinese-American customs dispute continues to set the pace on the stock exchange. Every small cough will throw the stock markets back and forth. It’s starting to get exciting here: The Chinese leadership has just sent a clear warning to the USA through a mediator of the Communist Party. The KP newspaper “Global Times” reported, citing unnamed analysts, that any new US tariffs on Chinese goods could bring the world’s stock exchanges to their knees. In detail, the report says: “If the US were to impose higher tariffs and China were to react with tougher countermeasures, this would be a catastrophic blow to the global stock market.”

Of course, the Communists have also noticed that Trump has repeatedly cited Wall Street’s performance as an indicator of his success. No wonder, since gigantic players like Calpers – the Californian pension fund for civil servants – invest in the financial market; in a crash the pension of many voters would be cut. Goodbye, re-election. The S&P 500 has already won around 11 percent this year, the Shanghai Composite more than 10 percent in the plus.

Negotiators from both economic powers met again on Tuesday. Trump expressed confidence and indicated that the deadline set for an agreement at the beginning of March could be extended.
This was also positively received in Japan: In Tokyo, the Nikkei index gained 0.6 percent to 21,431 points. Japanese exports to China fell by more than 17 percent last month compared with the same month last year. Which is also an argument for China and the USA to come to a better agreement. Should Beijing be weakened further, purchases in Nippon are likely to decline even more.

The Fed Takes the Floor

And so, it continues on Wednesday: In the currency market it could be interesting for EUR/USD, because in the evening analysts will take a close look at the minutes of the Fed’s interest rate meeting at the end of January. They hope to find answers to the question of whether the Fed will tighten its interest rate screw soon or not.

Wal-Mart Tops Forecasts

Wednesday is also likely to see some movement in US retail equities. Retail giant Wal-Mart topped expectations for Q4, reporting earnings per share of $1.41, compared to $1.33 which was what analyst expected. The bulls will be interested in this sector on Wednesday. In addition, Wal-Mart raised the dividend to $2.12 per share, the 46th consecutive year in which the payout has risen.

Meanwhile, the financial calendar in the USA has thinned out considerably. The Home Builders’ Index is still due for February. In the meantime, almost all 500 companies of the S&P 500 have reported; according to the stock exchange site “Zacks”, about 400 companies reported an average increase in profits of 13 percent and an increase in turnover of 7.5 percent for the fourth quarter in a year-on-year comparison.

As you can see, the numbers at the stock exchange are richly laid out. The only thing that is clear is that volatility will hold. And there are three main topics: China, China and China.

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.

05/11/2018 – 12:00: After last week’s impressive price rally and against the backdrop of weak data from the Asian stock markets, the German benchmark index is starting the new trading week almost unchanged at 11,522 points.

The still dominant topics on the global stock market are likely to be the ongoing trading dispute between the major powers of the USA and China and the possible solutions to this issue. Market participants are now slowly expecting action in response to the big announcements made in the past.

Against this backdrop, Asian exchanges lost ground at the start of trading on Monday during the session. The Japanese Nikkei Index had to accept a discount of around 1.4 percent. The broader Topix Index lost around 1 percent in value.

A further topic that investors and analysts are likely to be preoccupied with this week is the upcoming US Congressional elections to be held tomorrow, Tuesday. Depending on the outcome of the congressional elections, there may be some movement in the capital market. In both directions!

In the ongoing conflict between Iran and the USA, the American side has today introduced a number of new sanctions. German companies and other countries with export ambitions in Iran are also affected by the new sanctions.

The European common currency has also changed little in parallel to the Dax and is currently quoted at 1.1382 US dollars.

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.

19/10/2018 – 12:00: After the German leading index had to leave its mark on yesterday’s trading day and closed the day with a minus of 1.1 percent, the targets for today’s trading day are also difficult.

After the German leading index had to leave its mark on yesterday’s trading day and closed the day with a minus of 1.1 percent, the targets for today’s trading day are also difficult.

The US stock markets seamlessly absorbed the poor trading performance in Europe and also had to struggle with some worse than expected balance sheet figures. As a result, the Dow Jones Index fell by 1.3 percent. The broader S&P 500 Index lost around 1.4 percent. Similar scenes took place on the Asian stock markets where the Japanese Nikkei Index lost 1.1 percent in the course of trading.

Like the entire trading week, investors and analysts are focusing on the yields of Italian government bonds, which provide information about the current situation in Italy. Yields on 10-year government bonds rose to around 3.74, the highest level in the past four years. This could cause some investors to have bad memories of the European financial crisis. The background for the rise in bond yields could be the explosive mix of the government in Rome, where the right-wing populist camp currently wants to cut taxes and the left-wing populist camp wants to increase government spending.

As a reaction, the European currency fell in price and is currently trading 0.1 percent lower at 1.1443 USD.
On the technical chart side, the battle for the important 11,800-point mark in yesterday’s Dax trading was won by the bears. For about 18 months this mark served as chart technical important support. The next relevant support level could be the low for the year to date at a level of 11,458 points.

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.

01/10/2018 – 11:00: Dax with a friendly start in the trading week – focus on Italy and UK .

Against the backdrop of positive specifications from the Asian stock markets, the German Dax is starting the new trading week with tailwind. At 12.318 points, the Dax is currently around 0.6 percent higher.

After the harsh losses at the end of last week, investors seem to be somewhat more upbeat at today’s beginning. This is all the more remarkable as there has not been much change in the current situation. The dominant topics of the trading week are likely to continue to be the upcoming Brexit, in addition to Italy’s debt sustainability. Italian Finance Minister Tria will have to answer questions on the Italian nation’s situation tonight at the Eurogroup meeting in Brussels. In the United Kingdom, Prime Minister May’s conservative camp is discussing the all-dominant Brexit issue at a party conference.

Nevertheless, today the Japanese Nikkei Index was able to climb to 24,306.54 points, its highest level since November 1991. The strongly export-oriented Japanese economy can profit from a sustained weakness of the Yen.
On the economic and economic news side, investors and analysts expect the Purchasing Managers’ Indices for the German industry and the Euro-Zone to be released this week. Various purchasing managers’ indices will also be published across the Atlantic.
The European single currency is currently trading at USD 1.1598, almost unchanged.

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.

16/08/2018 – 16:00: After the „Risk-Off“ trading yesterday as equities, commodities, Euro & Co. recorded significant price declines on, today the picture clears up again.

In the early hours of the morning, news agencies were tickled by the news that a Chinese delegation would travel to the US at the end of August to resume the dialogue on the trade restrictions, imposed by the Trump government on Chinese goods and services. The invitation was issued on the initiative of the US after the trade talks were abandoned without any result about two months ago. The markets used this message to switch back to “Risk-On” mode.

Equities and commodities rose accordingly, and the Euro recovered from the sharp losses of recent days against the US-Dollar. However, the risk markets are coming out of an oversold situation and so today’s rally may seem to overlook the fact that the talks are not at the highest level of government, but at best at the lower level of government.
The aim of the talks is to find out whether there is a need for discussion at the highest level of government. Let alone the content, because there are concrete things about the possible timeframe so far. So, we are still left with pure hope – and this could soon be disappointed again if the talks are repeated – to prove fruitless. Then it’s gonna be “Risk-Off” again.

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.