News

27.12.2023 – For the bulls, a good stock market year is approaching the finish line. No wonder: on Wall Street and in Europe, it is now a foregone conclusion that the Federal Reserve will cut interest rates again next year. And sooner rather than later. Reason enough for us to take a closer look at this unexpected event. The financial giant BlackRock recently warned of a disappointment.

Optimism still prevails among the big names. Goldman Sachs, for example, expects an interest rate cut of 25 basis points from March to May, followed by quarterly steps. This would reduce the key interest rate from the current 5.25 to 5.5 to 4.0 to 4.25 by the end of the year. Bank of America also sees the first cut of 25 points in March and a total cut of 100 basis points in 2024. The bulls would like to see more cheap money.

Unexpectedly high interest rates

However, the two BlackRock experts Wei Li and Alex Brazier are swimming against the tide. In the “2024 Global Outlook”, they recently addressed the risk that hopes of an interest rate cut will be disappointed. In their outlook, they concluded: “Higher interest rates and greater volatility will define the new regime.” While most investors are already expecting an interest rate cut in the first quarter, the two experts are assuming a mid-year cut at best – if at all.

High-tech shares in particular are likely to be hit by a possible interest rate shock in the coming year. This is because young start-ups often live on credit, and the interest rate is also included in the discounted cash flow valuation method – the lower the interest rate, the higher the value of the company. As a result, the stock market could see a sharp downturn for the time being, here the Nasdaq 100 in the weekly chart. The index has marked a new record high in a nice Santa rally.

Quelle: Bernstein Bank GmbH

The markets are wavering between hopes of a soft landing and fears of recession,” the BlackRock analysis continued. There are also geopolitical supply bottlenecks, an ageing population and the transition to a low-emission economy – this is leading to lower growth and inflation above the central banks’ targets.

Problems for bonds

The experts’ specific recommendation: investors should steer clear of bonds with longer maturities and opt for short or medium-term maturities. Above all, the rising US debt burden is a reason to avoid long-term government bonds. If interest rates remain close to 5 percent, Washington will spend more on interest payments than on healthcare benefits in the coming years. This will probably lead to entrenched inflation and faltering growth. All in all, the risk of higher inflation remains. And this will prevent interest rate cuts.

The fund managers also downgraded the longer-term strategic assessment for equities from industrialized countries to “neutral”. This is because valuations are too high and the economic outlook is weak. The exception is artificial intelligence stocks, which remain overweighted.

This could lead to increased uncertainty in 2024. This creates a volatile environment in which active managers can play to their strengths, the strategists added. We add: Above all, a volatile environment brings good profits to traders with the right instinct. Our conclusion: BlackRock naturally thinks primarily in the long term with a horizon of around five years. However, the interest rate disappointment could indeed set the pace on the stock market in the coming year – and also determine events in the short term. Furthermore, high yields on bonds have already rubbed off on the stock market this year. We are excited to see what lies ahead – and wish you successful trades and investments!

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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. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.7

22.12.2023 –  While the stock market players are gradually getting ready for Christmas goose and red wine, the crypto bulls can hardly be tamed. Because it looks like Bitcoin, Ether and co. are about to ignite the next stage of the price rocket. The fuel is, of course, the authorisation for spot ETFs.

BTCUSD is in the process of forming an ascending triangle. The resistance lies at around 44,400 dollars – we are curious to see whether it will be broken soon. The picture shows the daily chart.

Quelle: Bernstein Bank GmbH

We have already discussed this topic: The crypto community is eagerly awaiting the authorisation of index funds. These are exchange-traded funds that invest directly in the spot market. This would enable the previously frowned upon cryptocurrencies to rise to the financial aristocracy and flush a lot of capital into the market. Now there are new indications that the previously closed doors will soon open.

Second meeting between Blackrock and the SEC
According to a report in CoinDesk, representatives of the investment giant Blackrock, Nasdaq and the Securities and Exchange Commission (SEC) have met for the second time in a month. According to a memo published by the website, the rules necessary for the authorisation of an ETF were discussed. Specifically, the memo stated: “The discussion concerned The NASDAQ Stock Market LLC’s proposed rule change to list and trade shares of the iShares Bitcoin Trust under Nasdaq Rule 5711(d).”
Rule 5711(d) sets forth the guidelines that apply to commodity-based ETFs as well as the requirements for compliance and the defence against fraud. The SEC is also concerned with the prevention of market manipulation, the website had previously reported. In this second meeting, Blackrock changed its application, particularly with regard to cash purchases, in order to address the SEC’s fears.

It will be exciting from 08 January
According to the well-connected financial journalist Charles Gasparino from Fox Business News, there is already speculation in the market about a decision by the SEC immediately after 8 January. It is possible that the stock exchange supervisory authority, which also fears money laundering, could install a safety net in the event of authorisation. For example, the obligation to buy tokens using the “in-cash” method: this would make the origin of the underlying more transparent – it would be clear where the fund obtains its shares from, and most traders would presumably only buy from reputable exchanges. However, the method would incur higher costs than “In-Kind” – where the underlying is traded directly against fund shares. Nevertheless, the boost to share prices would be enormous.
Ultra-bull Michael Saylor, CEO of MicroStrategy, recently said on Bloomberg TV that the approval of Bitcoin ETFs was the biggest development on Wall Street in the past 30 years – it could trigger a bull run in the coming year because the increase in demand would lead to a supply shock.
With this in mind, keep an eye on the real-time news over the festive period. We wish you a Merry Christmas and successful trades and investments!

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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. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.7

Source: Bernstein Bank GmbH

19.12.2023 –  Shadow boxing in Tokyo: instead of finally getting into the ring, the Bank of Japan continues to warm up. In other words: once again, the monetary authorities have not raised interest rates. Nor have they sent out any signals that the fight is about to begin. The audience leaves the hall disappointed.

That’s not going to happen with the firm yen: Buyers in the forex market turned away. Here’s a look at the Canadian dollar, which rallied nicely. You can see CADJPY in the hourly chart and you can put any other major currency against the Japanese soft currency – the trend is always the same.

Source: Bernstein Bank GmbH

That’s what happened: Nothing. There was no rate hike – the BoJ left the key interest rate at minus 0.1 per cent and the yield target for ten-year government bonds at around zero per cent. The accepted upper yield band for Japanese bonds remains at 1.0 per cent. The decision was unanimous, with the central bank council pointing to the recent weakening of inflation in the Nippon.

Silence in Tokyo
While the fact of the interest rate move had been widely expected, some forex traders were disgruntled that the press conference made no verbal reference to an imminent end to the ultra-loose monetary policy.
Reuters had analysed this about a week ago: After more than 16 years since the last rate hike, Governor Kazuo Ueda would have to find cautious words so as not to spook the hyper-sensitive foreign exchange market. After all, he has already caught the market on the wrong foot twice – the yen has pulled away. Ueda must also prepare the forex market very carefully for a coming policy change in order to prevent a destabilisation of the bond market.

Definitely in spring
As a result, the central bank today remained unemotional in its dithering and hesitation: “There are extremely high uncertainties with regard to the Japanese economy and prices,” explained central bank chief Kazuo Ueda to journalists. More clarity is needed as to whether wage-driven inflation is sustainable. A few weeks ago, traders had registered completely different signals, as we reported.
According to Reuters, 80 per cent of market participants see a policy change by April. The market is now hoping for a revision of monetary policy in the first quarter of next year, commented Hirofumi Suzuki, chief foreign exchange strategist at SMBC in Tokyo. If you want to be in on the hope, you should keep an eye on the yen. Whether long or short – Bernstein Bank wishes you successful trades and investments!

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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. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.7

18.12.2023 –While the Robusta variety, which tends to be sold in supermarkets, is experiencing a small price run, the more noble Arabica variety is taking a back seat. We shed light on the background.

Robusta has just climbed to a new five-month high. The bulls are taking a breather in Arabica, here is the daily chart..

Source: Bernstein Bank GmbH

This is the background. While Robusta farmers in Vietnam and Brazil are holding back stocks and betting on further price rises, Arabica came under pressure from news from Brazil.

News from Brazil
The Brazilian producers’ association Conab has just raised its estimate for the 2023 harvest – by 700,000 to 55.1 million bags. At least the price is still being supported by the drought: the weather service Somar Meteorologia recently announced that the important growing region of Minas Gerais had recently only received half the average amount of rain. Minas Gerais accounts for around a third of Brazil’s Arabica production, as the website “Barchart.com” explained.

Mixed factors
The medium-term fundamentals are otherwise mixed. On the bullish side, the commodity exchange Intercontinental Exchange recently reported a 24-year low for Arabica beans in its co-operating warehouses.
On the bearish side, exports are picking up, as the International Coffee Organisation (ICO) recently announced. Global exports of all varieties rose by 0.9 per cent year-on-year to 9.53 million bags. The Brazilian Ministry of Trade had already reported an increase of 8.5 per cent to 235,000 tonnes on 1 December. Honduras had even reported an increase of 63 per cent to around 110,000 bags for November.

Millennials keen to experiment
Finally, let’s try to make a long-term forecast. We suspect that the easing, but still high inflation in the western world is likely to drive buyers towards the cheaper Robusta variety in the coming months. And that Arabica is more likely to suffer a setback.
The market researchers at Coherent Market Insights, on the other hand, expect rising prosperity in the emerging markets to boost demand for premium brands and speciality coffees in particular. Millennials in particular are curious about new things. At the same time, sales of fast products such as instant coffee and capsules will also increase. All in all, spending on coffee in India and China is expected to increase by more than 15 per cent. We look forward to seeing how things develop – and will keep you up to date!

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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. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.7

15.12.2023 –It has done it again: for the third time in a row, the Federal Reserve has left interest rates unchanged. The day after, the guesswork is in full swing: have we reached the interest rate plateau? And will interest rates go downhill again from now on? In fact, there is a lot to be said in favour of this. Because the Fed delivered a real Dovish surprise.

Many now see the renewed hesitation as clear evidence that the Fed will achieve a soft landing. In other words, the economy will not be stalled and inflation will come down slowly. This would mean that interest rates could slowly fall again – which would give a new boost to high-tech shares in particular. Or, at the very least, it means that there will be no further interest rate hike. Which would also be moderately bullish for the stock market. In any case, the Nasdaq 100 has already made a little leap for joy – here is the four-hour chart.

Quelle: Bernstein Bank GmbH

These are the facts: The Fed Funds Rate remains in the range of 5.25 to 5.5 per cent, the rate at which commercial banks can borrow central bank money. This is still the highest rate in more than two decades. Since March 2022, the central bank has raised interest rates by more than five percentage points in the fight against high consumer prices.

Bullish signals
Ultimately, however, the facts currently outweigh the bulls: The Fed’s new economic forecast indicates that interest rates will be lowered again next year. Although inflation is still higher than the Fed’s target, it is weakening. The US Department of Labour announced on Tuesday that consumer prices had risen by 3.1 per cent compared to the same month last year. In October, the rate had been 3.2 per cent. The Fed only wants inflation of 2 per cent.
The central bank is now expecting a slightly lower inflation rate than before. The inflation rate is expected to average 2.4 per cent in the coming year, compared to 2.5 per cent in September. For 2023, the Fed is forecasting an inflation rate of 2.8 per cent, compared to 3.3 per cent in September.

Soft landing
The Fed also does not see the economy overheating. The Fed is now forecasting slightly lower economic growth for the coming year than was assumed three months ago. The gross domestic product (GDP) of the world’s largest economy will therefore grow by 1.4 per cent in 2024. This would be 0.1 percentage points less than forecast in September. The central bank has now even tentatively hinted at an interest rate cut. The Fed now expects an average key interest rate of 4.6 per cent for next year, compared to 5.1 per cent in September.
The upshot of all this is that the Fed has shown itself to be far more dovish than most experts had expected, at least according to the blogs “ZeroHedge” and “Newsquawk”. As the European Central Bank acted similarly today, there is no danger of capital flowing out of Europe. The ingredients for a continuation of the bull market are therefore in place. We are excited to see what happens next and wish you successful trades and investments!

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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. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.7

12.12.2023 – Just like the first snow at the end of November, the price of natural gas has melted away. It is too mild for a bull market, not only in Europe but also in the USA.

The bears have been celebrating their feast for weeks: high inventories and weather forecasts predicting a much warmer winter than usual have sunk prices. Here is the daily chart of US gas. From a technical point of view, an important support level of around 2,550 dollars per million British thermal units (MMBtu) has been broken – the next stop will probably be 1,950, according to the experts at economies.com. We are more likely to see 2,510/2,500 (see red lines), but no matter – the trend is the same.

Source: Bernstein Bank GmbH

The weather website NatGasWeather.com commented on the latest events: “The weekend data failed to trend any colder with the setup through Dec. 26 suggesting warmer than normal temperatures and lighter than normal demand will continue through the end of the month.”

The storage tanks are full
In addition, the heating season in the US has started with the highest storage levels since 2020, as the U.S. Energy Information Administration (EIA) announced last week. Specifically, the storage volume is 5 per cent above the five-year average. The mild winter of 2023/2023 and increased savings on heating had already ensured a high fill level in gas storage facilities. As a result, the tanks were 19 per cent fuller on 1 April than in the previous five years.

China and the Saudis
And then there is the UN Climate Change Conference COP 28, where there was a lot of talk and concrete action remains to be seen, but for the first time, Saudi Arabia, a major gas producer, has tentatively supported the willingness to reduce the use of fossil fuels, as the website “FXStreet” explained. Furthermore, fears of deflation in China – i.e. a recession – are spreading, which is likely to significantly reduce demand for liquefied natural gas.
Our conclusion: There are currently hardly any arguments in favour of a new natural gas boom. It is not only in this country that people are holding back on turning up the heating, if only to reduce their dependence on Russia. Many households have switched to firewood and prices have roughly doubled since last year. And if it’s just as dingy and wet and cold as it is now, then simply wearing warmer clothes at home helps. We look forward to seeing what happens next and wish you successful trades and investments!

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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. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.7

08.12.2023 –  Now it really is coming, the turnaround in Japanese monetary policy. Or was it just another false alarm? Either way, unusually hawkish comments from the Bank of Japan (BoJ) have catapulted the yen upwards in the meantime. Volatility has increased dramatically.

This is how energetic the forex market can sometimes be. The yen roared away to below 142 against the dollar before profit-taking set in. The picture shows the hourly chart of USDJPY.

Source: Bernstein Bank GmbH

Yesterday, the yen posted its strongest daily gain since January. Four weeks ago, the currency had hovered at around 150, its lowest level in 30 years.
The hawks have spoken
This is what happened: Kazuo Ueda, governor of the Bank of Japan, said yesterday, according to Reuters, that managing the currency would become even more difficult towards the end of the year and that the problem would continue into the new year. Ueda also met with Prime Minister Fumio Kishida. Currency traders interpreted this as a sign that the era of ultra-low or negative interest rates is definitely over – and buyers poured into the market en masse.
The deputy governor of the BOJ, Ryozo Himino, had already made similar comments on Wednesday. According to him, the end of the negative interest rate policy would only have a relatively small impact on the Japanese economy. The key interest rate in Japan is minus 0.1 per cent.
Is the turnaround finally coming?
The BOJ has scheduled its last meeting of the year for 18 and 19 December. By then at the latest, the ultra-loose monetary policy that the Nippon is the only major economy still able to afford could finally be over. “The view is growing that the BOJ will move to modify its policy soon, such as through ending negative interest rates or scrapping its yield curve control policy at its December meeting,” said Akira Moroga, Chief Market Strategist at Aozora Bank, in an interview with the business publication “Nikkei”.
Yield curve control means that Tokyo is aiming for a yield of 0 per cent for ten-year Japanese bonds, but accepts an upper level of 1 per cent. This means that the central bank is buying its own government bonds to keep prices high. Otherwise, the balance sheets of domestic companies holding Japanese bonds would implode. And this means a huge amount of freshly printed air money flows into the market, which weakens the yen.
We are curious to see whether the central bank will finally dare to make an official U-turn. Or whether hesitation and procrastination will be the order of the day again. Whether long or short – Bernstein Bank wishes you successful trades and investments!

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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. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.7

07.12.2023 –  After the bull market, many investors have taken their first profits. On Wall Street, but also in Germany. Now all eyes are back on tomorrow’s US labor market report. And soon the Federal Reserve will also have its say again. The market is pondering.

The DAX has just reached a new all-time high. No wonder, inflation in the eurozone has fallen significantly to 2.4 percent. A year ago it was 10.1 percent. According to Director Isabel Schnabel, the European Central Bank will not be raising interest rates any further for the time being. “The final nail in the coffin for further interest rate hikes, even if nobody expected it”, stated economist Andrzej Szczepaniak from the financial firm Nomura. However, attention is now turning back to the USA.

Source: Bernstein Bank GmbH

It is not only in Germany that stock market players have briefly switched from buying frenzy to digestion mode. The latest data certainly pointed to falling interest rates. But for some, fears of a recession were already spreading again.

The job market is cooling
The ADP jobs report was weak, with employment in the US rising by just 103,000 jobs in November, compared to the 130,000 expected. The report from Automatic Data Processing is a harbinger of the official figures tomorrow, as the company tracks around a fifth of jobs in the private labour market. In addition, unit labor costs fell 1.2 percent in the third quarter versus an expected 0.9 percent.
The JOLTS report for October was also dovish, showing that the labor market sank to a two-and-a-half year low. The abbreviation stands for Job Openings and Labor Turnover Survey, which is conducted monthly by the US Bureau of Labor Statistics. All of this should give the Federal Reserve an argument for lowering interest rates again soon. After all, the wage-price spiral has apparently come to a halt. If this is the case in the long term, the bulls are likely to storm off again.

Rather bullish
Meanwhile, Reuters has published a survey showing a slight bullish bias among experts in the eternal tug-of-war between fear of recession and hope of falling interest rates. Of 102 economists surveyed, 52 do not expect the Fed to cut interest rates until July 2024. However, 50 believe that this will happen earlier. And further: 72 experts believe that the Fed is likely to cut rates by 100 basis points or less in the coming year. And all but five assume that the Fed has finished tightening.
However, Scott Rubner from Goldman Sachs recently warned that the rally now has absolutely no fuel left. Now it is time to discuss whether the central bank will really cut interest rates quickly.

NFP ahead
And so investors’ eyes are once again turning to the nonfarm payrolls – the NFP, i.e. the figures from the US non-farm payrolls, are due tomorrow. Most experts are expecting 150,000 new jobs in November. However, October’s figure of 150,000 new openings was already below expectations of 180,000. So keep an eye on the ticker, tomorrow there will be some nice volatility for experienced traders.
If the job market slumps too much, fears of an economic crisis will increase – bearish. If new jobs increase too much, fears of new interest rate hikes will prevail – bearish. However, if the labor market weakens a little, but not too much, hopes of new interest rate cuts will be fueled – bullish.
And then there is the FOMC meeting in the middle of next week. We are curious to see what happens next and will keep you up to date. Whether long or short – Bernstein Bank wishes you successful trades and investments!

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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. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.7

04.12.2023 – The bulls are celebrating: Jerome Powell has single-handedly created a small Advent bull market. After his fireside chat at Spelman College in Atlanta, the optimists seized the opportunity. Shares, gold, Bitcoin – everything took off.

After the Federal Reserve’s verbal intervention, the dollar slipped and gold hit an all-time high before profit-taking set in. Here is the four-hour chart.

Source: Bernstein Bank GmbH

Bitcoin climbed to 40,000 dollars for the first time since May 2022, Ether above 2200 dollars. Increased risk appetite everywhere: the Nasdaq gained an incredible 11% in November, while the S&P 500 climbed 9%.
The bulls are also celebrating in Germany: The DAX has risen by around 12 percent since its low in October, gaining almost 10 percent in November alone. The leading index has just completed its fifth week of gains – the longest winning streak of 2023. The record high of 16,529 points is now within reach.
Interest rate hope from the Fed
Powell played both sides again on Friday – but the market believes that the tightening is coming to an end. The Fed Chairman had this statement for the hawks: “It would be premature to conclude with confidence that we have achieved a sufficiently restrictive stance, or to speculate on when policy might ease. We are prepared to tighten policy further if it becomes appropriate to do so.”
But the doves also got their money’s worth: “The strong actions we have taken have moved our policy rate well into restrictive territory, meaning that tight monetary policy is putting downward pressure on economic activity and inflation. Monetary policy is thought to affect economic conditions with a lag, and the full effects of our tightening have probably not yet been felt.”
The take-home message for the market: it could be that interest rates are stifling the economy; and as inflation is falling, we should at least wait to see the effect of the steps taken so far. If there is not even more to come, interest rate cuts for example. In his answers to questions from students, Powell certainly sounded optimistic: he sees the USA well on the way to the inflation target of 2 percent and did not rule out a soft landing.
Interest rate cut ahead?
In any case, hardly anyone now believes that the Fed will raise interest rates again on December 12 and 13. And not only that: most even see interest rate cuts. According to the financial blog “ZeroHedge”, March rate cut odds have just risen to an all-time high of 80 percent – before Powell’s speech, they would have been just 10 percent.
But keep an eye on the real-time news – surprising economic data can quickly turn things around. Ditto an escalation of the wars in Ukraine and Gaza. Or the Fed itself, which could get spooked by the rally. Whether long or short – Bernstein Bank wishes you successful trades and investments!

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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. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.7

01.12.2023 – The DAX on the rise: Fund managers have to invest capital that was previously held in reserve. So that they can point to winning stocks in the annual review and show that they made the right investment. At the moment, there are few disruptive factors that could impair the usual window dressing at the end of the year
This is what a real bull chart looks like: The year-end rally is underway, the picture shows the daily chart of the DAX.

Source: Bernstein Bank GmbH

The experts at DZ Bank explained that the first obstacle to the continuation of the upward movement was the daily high of 16,263 points on 30 November. “Only if this hurdle is sustainably surpassed could the price trend in the following days extend towards the all-time high of 31 July at 16,532 points”. We think so: At the moment, it certainly looks like it.
And ING’s early analysis has now also been overtaken by reality. If the DAX can rise above the high of 16,311 points, a run-up to the resistance area at 16,400 points can be expected. The focus for the short-term price trend in the DAX remains on the 10-EMA (Exponential Moving Average), which most recently stood at 16,035 points. As long as the DAX remains above the 10-EMA, prices are likely to continue rising in the short term.
Why shouldn’t it continue to rise? There is currently hardly any disruptive fire from the news side from the various problem areas: Interest rates in the USA are unlikely to be raised any further for the time being, and the European Central Bank is also likely to change course at some point.

Conflicts continue to smoulder
In politics, everything is going well for the stock market. Always simulate determination, but please don’t act decisively. Ukraine is not making any progress on the front, the West is starving the country to death: the Ukrainian army is only receiving just enough weapons to keep it from buckling, but not enough to win against Russia. The best example of this is the fact that weeks after the promise to deliver one million artillery shells, just 300,000 have arrived. Russia, on the other hand, has apparently received one million shells from North Korea within days.
The war in Gaza continues to smoulder at a low level for the time being, but there has been no escalation. We are curious to see whether the situation will boil up again now that the ceasefire has expired. Meanwhile, politicians in Europe and the USA are doing what they always do: they make grand speeches but stab Israel in the back out of fear of the raging mob and prevent the Arab Waffen SS called Hamas from being eliminated. Of all the scum calling for a caliphate in this country, none have been put behind bars or even deported.
With this in mind, as long as there is no disruptive fire from geopolitics, there is little to be said against a continuation of the upward trend in view of the easing tightening. Perhaps the Federal Reserve still has surprises in store, who knows. We will keep an eye on the situation for you – and wish you successful trades and investments!

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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. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.7