News

Finally, Tuesday has become a positive day in the markets. Investors have not seen the end of the bearish trend for a long time. For several days now we have been witnessing the stabilization of markets and this is very good. The released macroeconomic data on China’s business activity index turned out to be higher than predicted, which is a good sign for a possible start of growth.

Chart of the day S&P500

The struggle against the coronavirus continues. Therefore it is worth paying attention to some important assets. Demand for U.S. bonds remains. The interest rate on 10-year US-Treasury remains below 0.7%. Oil is trying to recover from phone talks between US and Russian leaders about the situation on the energy market. Gold trades without any pronounced dynamics. It follows that there is still an appetite for risk. One can expect an attempt to consolidate the S&P500 index above 2600 points.

Euro

The pressure on the Euro is increasing. After the release of the EU Consumer Price Index data, we saw the inflation rate drop to 0.7% compared to 1.2% in February. We can assume that if the current dynamics are maintained, the inflation rate may move into the negative zone at all, which will force the ECB to apply even greater measures to stimulate consumer demand. It is also possible to assume that in the second quarter due to quarantine the economy of Eurozone will slide by 12% of GDP, which looks very bad for Euro against the background of strengthening dollar. In the current situation we should consider only sales of EUR/USD pair.

Pound Sterling

The British pound behaves well in the current situation and gives great hope to investors. According to some reports, the epidemic in the UK is slowing down and, perhaps, due to the measures introduced by the government, the economy will be able to recover earlier. The second plus is that the government can print pounds as much as it really needs to stimulate. This has a positive effect, too. So far, the GBP/USD pair is trading above the SMA 50 and 100 and keeping the bullish trend. The key support level is 1.2340 and the resistance is 1.2460.

Gold

On Tuesday, there was a slight downward correction in gold from Monday’s highs. One of the reasons is profit taking due to the end of the 1st quarter. In the coming days we should expect the end of this correction and resumption of the uptrend to the level of 1690 – February highs. Still, gold has much more room for maneuvers. Any tightening of quarantine measures or another injection from the US Federal Reserve will only increase the value of the precious metal.

What’s waiting for us today?

01.50 Large Producer Activity Index in Japan
09.55 Business activity index for the German manufacturing sector
14.15 Change in the number of non-agricultural employment in the United States

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.

Monday ends on an optimistic note for the markets. We can see that there is a certain decline in volatility in all sectors of the economy. Investors have calmed down a bit after Donald Trump’s performance on Sunday. From the speech we heard a radical change in tone on the pandemic and the economic situation.

Chart of the Day Brent

Of course, everyone asks the question, what happens next? Probably many companies, from airlines to hotels, will be on the verge of bankruptcy, and the next month will only begin to bring depressing news. The good news is that volatility in the markets is falling. Investors understand that the virus will sooner or later be defeated, and the euro and dollar will not go anywhere. On Monday, the DAX index rose by 2% and the DOW index by almost 3%.

Euro

Yesterday’s comments on the European currency were correct. The Euro did not have enough strength to move higher. In the USA the statements and actions of the government are much more decisive than in the EU. From now on, we will observe the situation both in Europe and the USA. Due to the lack of concrete measures to stimulate the economy by the EU, the Euro is unlikely to grow. In the meantime, the U.S. is very slowly spinning the machine to stimulate the economy, which is also causing irreparable damage to many companies. The one who copes with the problems faster will win.

Bitcoin

While all countries are at war with the epidemic, it seems that investors are not at all concerned with cryptocurrencies. However, we can see that Bitcoin is holding up well above $6000, and at least not falling. There is a suspicion that because Bitcoin is generally not very dependent on some real sector of the economy, as well as because of the weakening of strict regulation, investors will want to take a chance and buy the cryptocurrency for certain amounts.

Oil

The price of Brent oil fell to $22 per barrel for the first time since March 2002. All our previous concerns are confirmed. There is little hope for any stabilization, as the prices for long-term contracts are beginning to level off. So far, oil has very little chance of recovery. Very much now depends on the concerted action of importers and exporters. Only new agreements between countries can stabilize the current oil situation.

What’s waiting for us today?

03.00 Manufacturing activity index in China for March
08.00 UK GDP
09.55 Change in the number of unemployed in Germany

Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

30.03.2020 – Daily Report. New losses at the beginning of the week – and a moderate countermovement on the German stock exchange until Monday noon. Of course, Corona is in charge. And oil is being squandered.

Prices in Frankfurt crumble at first

An exciting start to the week on the German stock exchange: Share prices in Frankfurt initially plunged, but then worked their way back up. Most recently, the DAX remained unchanged at 9,633 points. The daily low on Monday was 9,456 points. Golden times for traders. On Friday, the price indicator had still lost more than 3 percent – but the weekly gain was still 8 percent. In a special report on Monday, the economic experts warned of the worst recession since 2009, with German gross domestic product expected to shrink by up to 5.4 percent this year.
The US futures on the S&P 500 are shimmying back up to 0.4 percent. They had slipped after the announcement of the extension of the lockdown guidelines in the USA until 30 April. Fears of a prolonged slowdown in the US and European economies continued to dominate equity trading. And China was also an issue. “The Daily Mail” reported that scientists had warned the British government: China was tricking with its corona numbers – the actual cases could be 15 to 40 times higher than reported.

Moderate losses in Asia

On the stock exchange in China, the CSI-300 fell 1 percent to 3,647 points. The prices were supported by the news that the central bank is supporting the domestic economy with lower short-term interest rates for banks. The Nikkei in Tokyo initially slipped 800 points, but then fought its way back up. At the end of the year, the index recorded a minus of 300 points or 1.6 percent at 19,085 digits.

US stock markets plummet

On Wall Street, investors had played it safe before the weekend. After all, the House of Representatives had waved through the US government’s mega aid program. The Dow Jones closed 4.1 percent lower at 21,636 points. The S&P 500 lost 3.4 percent to 2541 points. Nevertheless, the S&P 500 recorded its strongest weekly gain since 2009 with a weekly gain of 10.3 per cent, while the Dow rose by 12.8 per cent, the strongest increase since 1938. The Nasdaq 100 lost 3.9 percent to 7,588 positions on Friday.

Beware of premature hope

Meanwhile, according to CNBC, analysts warned against chasing a rally in the bear market. Eric Robertsen, Head of Global Macro Strategy at Standard Chartered, said the risk rally lacked substance. Next month, he said, first quarter results from investment brokers and global economic data would show the scale of the economic collapse. Both will exacerbate the weakness in consumer confidence, along with the widespread health crisis and fear of unemployment. Those who believe that the drop in share prices of around 25 percent already prices in these variables could be acting prematurely. Robertsen looked back on 2008: After announcing the aid measures, prices jumped in November 2008 to hit their lows in March 2009. Only then did the real recovery begin.
Daniel Gerard, Senior Multi-Asset Strategist at State Street, also argued that more information from corporations was needed to announce a final low. No one has an accurate picture of the impact of the Corona crisis on profits, he said in an interview with CNBC’s “Street Signs Asia”. Vishnu Varathan, Head of Economics and Strategy at Mizuho Bank, doubted that the various stimuli already had an impact on stock prices. Sales shocks from the quarantine and the disruption of supply chains would continue for a while.

Oil sell-off

Meanwhile, oil prices continued to slide. On Monday, Brent lost almost 8 per cent at its low point, and at 23.03 dollars per barrel was as cheap as it had last been in 2002, with the most recent drop of 4.5 per cent and a price of 26.69 dollars. WTI fell by 3.4 percent to 20.79 dollars. Apart from the current deflationary shock in global demand, there are no signs that Saudi Arabia and Russia are settling their price war.

What the day brings

On Monday, the diary contains only a few interesting events, as always you will find an overview here: Market Mover

In the USA, for example, the pending house sales for February are due at 4:00pm.

The Bernstein-Bank wishes successful trades!

Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

The previous week was very nervous for all sectors of the economy. Thanks to the rapid actions of central banks it was possible to avoid a catastrophic fall of stock markets. In just a few weeks, huge amounts of money were injected into the world economy, indicating that central banks are on alert. They will fight the downturn in consumption and production.

Chart of the Day GBP/USD

All attention this week will be focused on coronavirus distribution in the US and Europe. The next few months will be key to the US presidential election. The launch of the Fed’s fourth phase of quantitative stimulus as well as the healthcare system will show how strong the current government is. Markets are reacting very sharply to any negative information, and on Friday investors decided to take profits. S&P500 index fell by 3.3%, DAX fell by 3.6%.

US Dollar and Euro

The two major world currencies are closely monitored by investors. The dollar has weakened because of the Fed’s money volley. It has to remain weak in order to maintain liquidity and economic recovery. If the dollar gets stronger, it is likely that the US Treasury will take additional stimulus measures. So far the dollar shows that the US government is doing the right thing.
But the Euro is in big trouble. After the failed EU summit, where they could not agree on the release of “coronobonds”, Europe risks losing a lot as long as the government takes action. Economic growth is collapsing, production is stopping, only the ECB is able to cope with the situation and support the economy. Probably, the Euro will not grow anymore in the current situation until some kind of action plan from the government appears. On Friday the Euro closed at 1.1140 .

Pound Sterling

The pound has shown very good dynamics over the past week. From Monday to Friday, the currency grew by almost 7%. The British government is taking enhanced measures to combat the epidemic. They also have a great opportunity to print their money, which will positively affect the economic stabilization. Great Britain now looks the best in Europe.

Oil

The drop in demand for oil has put Saudi Arabia in an unpleasant position. The Kingdom was wondering where it would sell what it was currently producing. The oil market has almost dropped by 50% and countries are not in a hurry to resume buying. If production does not fall soon, the market will go even lower. We may see oil below $20 or even $15 per barrel.

What’s waiting for us today?

08.00 Consumer price index in Spain for the year
13.00 Consumer price index in Germany for the year
15.00 US Real Estate Underperforming Index

Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

27.03.2020 – Daily Report. Yesterday, the DAX made it just above the magic mark. Recently it has been lurking a good deal below it again. The question remains whether investors will take on new risks before the weekend.

Losses in Frankfurt

On Friday afternoon, the German stock market first took a breather: the DAX was 2.1 percent weaker at 9,791 points. Yesterday, the leading index had regained the 10,000 and ended Xetra trading at 10,000.96 points. The gold price dropped 0.7 percent to 1,618 dollars.
The US futures fell by about 2 percent. The US House of Representatives tried to collect its members of parliament to finally pass the gigantic aid package of around 2 trillion dollars. In view of the incoming reports, some brokers became queasy.

Corona costs us 1.5 trillion euros

According to David Folkerts-Landau, Chief Economist at Deutsche Bank, the Corona pandemic is likely to cost the Federal Republic of Germany up to 1.5 trillion euros. The expert also told the “Focus” that this year, the German GDP will decrease by about 7 to 8 percent. At least he encouraged investors: “But from the fourth quarter onwards things will start to pick up again, and we expect a noticeable increase in economic growth in 2021”.
Meanwhile, the EU has been unable to agree on which financial instruments to use to help countries such as Italy or Spain that are particularly hard hit.

USA reports the most infections

Furthermore, the USA has reported more known corona infections than any other country. By Friday morning there were almost 86,000 known cases, about 81,800 in China and about 80,600 in Italy, according to the Johns Hopkins University in Baltimore. There are now more than half a million confirmed infections with the Sars-CoV-2 virus worldwide.
Meanwhile, the G-20 spread optimism. After a teleconference, the group of states announced that a total of more than 5 trillion dollars would be pumped into the global economy.

Profits in Asia

TThe CSI-300 in China rose 0.3 percent in the morning to 3,710 digits. In Tokyo, the Nikkei gained 3.9 percent to 19,389 jobs.

New York recaptures ground

Brokers in the USA again took bold action yesterday. The indices closed at their daily high. The Dow Jones Industrials gained 6.4 percent to 22,552 points. Since Monday’s low on the lowest level since November 2016, the index has gained 4,000 points again. In the past three days the plus was 21.3 percent, the best run since 1931, and the S&P 500 gained 6.2 percent yesterday to 2,630 points. And the Nasdaq Composite gained 5.6 percent to 7,797 jobs.

Whales on the hunt

Incidentally, speculation on Wall Street that large “whales” are on the move and stocking up on stocks has been going on for days. which are huge pension funds and sovereign wealth funds. This in order to replenish the share of total assets in equities, which fell in the course of the sell-off, by the end of the month, according to JPMorgan.
It is fitting to point out that the Norwegian sovereign wealth fund has lost a whopping 124 billion dollars in the sell-off from its previous total of 1.1 trillion dollars. The petrodollar-fuelled Government Pension Fund Global is considered the largest investment vehicle of its kind in the world. Outgoing CEO Yngve Slyngstad announced that the fund will increase its equity weighting in the portfolio from 65.3 to 70 percent.

Horrendous rise in unemployment in the USA

Interestingly enough, the VIX does not really reset. The panic indicator remains at 61 points despite all the aid programmes in the USA and Europe.
No wonder, yesterday’s figures from the American job market were gloomy: Last week, the number of first-time applications for US unemployment assistance increased tenfold to just under 3.3 million. The previous high was 695,000 weekly applications in 1982, and in view of this development, Fed Chairman Jerome Powell took the floor. On US television he said that the USA was probably already in a recession. At the same time, he did not rule out further emergency measures in the fight against the consequences of the virus crisis.

Stock market legend warns of new corona crash

Meanwhile, an investment legend warned of a violent return of the crisis on the stock market. Paul Tudor Jones, who had his greatest times in 1987, told CNBC that his flagship fund had achieved a return of 1.5 percent in the past two months. After all, he has thus avoided the big sell-off. Jones said he expects a peak in the outbreak in early April – and then the market will test the lows again. The man knows what he is talking about: According to Boerse.de, the nearly 4 billion dollar fund Tudor BVI Global has gained an average of 26 percent per year since its inception. PTJ’s private assets are estimated at just under 4 billion dollars – making the self-made billionaire one of the 400 richest people in the world.

What the day brings

At the end of the week, the diary only lists a few interesting events. As always, you can find an overview here: Market Mover

For example, consumer spending in the USA is scheduled for February at 1:30 pm.
At 3:00pm the consumer confidence of the University of Michigan begins.

The Bernstein-Bank wishes successful trades – don’t let the quarantine get you down!

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.

On Thursday, serious data on the state of the economy in the U.S. and other countries were released. We received 3.28m of initial jobless claims in the US, compared to 282k last month, with the current month forecast of 1.6mn. This is the number of people in the US who have been unemployed and are in search.

Chart of the Day EUR/USD

What’s going to happen next. All countries start printing money. In the U.S., companies will receive this money within the next three weeks. Many experts say that all current activities of the central banks are very much like those during the World War. When the printed currency is spent on its own needs and also will be redirected to individual countries in exchange for goods or other services. In this situation, the issuer country is on the plus side, as their money walks around the world and they benefit from acquired technologies, goods, etc.

Euro

The Euro currency has been very optimistic in recent days. Of course, when major central banks of developed countries start pumping their economies with money, a certain balance appears. Therefore, the situation with the Eurocurrency will be similar. The average price of the Euro against the U.S. dollar fluctuated at 1.15-1.20. Therefore, in the current situation the price will tend to the balance level and will soon reach serious resistance levels. On Thursday the Euro is rising and trades at the level above 1.1030.

Gold

Gold keeps trying to go even higher than on Wednesday. Metal is always a priority. Especially if it happens in a situation where all countries start printing a lot of money. During World War II, gold was the main means of settlement between countries because there was so much money that no one took it into account. If the countries decided to use the tactics of issuing money as during the war, gold will become more expensive. Because only hard metal will cost real money. It will be carried, exchanged, traded and only gold will have real value.

Oil

If oil supplies do not decrease, very soon the whole world will face an oversupply of this raw material, and as a result, the price will drop drastically. Due to the low oil prices, shale oil production in the USA may drop to a minimum, which will lead to further cuts in the workers in this field. Many countries are beginning to realize that excessive oil production is only harming the global economy and are thinking about reducing revenues. Brent oil is traded at $28.5 per barrel.

What’s waiting for us today?

08.00 UK Housing Price Index
13.30 Price index of expenses for consumption index in USA
18.00 Total number of rigs in USA

Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

26.03.2020 – Daily Report. “Sell the news” or doubts about the final passage of the monster rescue package in the US? The DAX fell back on Thursday for the time being. On the trading floor, worries were rife about America as the new epicenter of the plague.

Consumers and exporters with corona depression

The German leading index lost 2.1 percent to 9,664 points on Thursday noon. Consumer sentiment in Germany is suffering severely from the economic impact of Covid-19 and GfK market researchers forecast a fall of 5.6 points to 2.7 points in their consumer climate barometer for April. The last time the value was lower was in May 2009 in the wake of the financial crisis. Understandably, German exporters are also extremely skeptical. For example, the Ifo barometer for industrial export expectations slumped from minus 1.1 to minus 19.8 points. This is the sharpest decline since reunification and the lowest value since May 2009.

US Senate waves rescue package through

That night, after some back and forth, the US Senate had waved through the gigantic stimulus of $2 trillion at 96 to 0. If you need some reading material in quarantine, here is the full package on 800 pages:
Link
The most interesting arrangement for us is the helicopter money: $1,200 for every low and middle-income American and $500 for children. Now the House of Representatives has to agree – the vote is expected to be held tomorrow Friday.

Fear of the USA as new epicenter

Nevertheless, US futures recently fell by around 1 percent. Fears are circulating on the trading floor that North America could become the next ‘hotspot’ for the coronavirus pandemic after Europe. The east and west coasts in particular have been hit hard, which is hardly surprising given the China Towns in New York and California and the attraction for tourists. After all, the death rate is still relatively low and only just ahead of Germany, as the Mises Institute noted.

From Northern Italy to Spain

The question remains as to the reason for the horrendous death figures in Italy and Spain. One answer: long unhindered, massive further spread by a large number of infected persons. We had pointed out the epicenter in the Italian fashion and leather industry with thousands of Chinese cheap laborers. And during Milan Fashion Week at the end of February and in the wake of football, the disease apparently made its way to Spain. One of the first cases in Spain was an Italian woman living in Barcelona who had previously visited her family in Bergamo and Milan, as reported by “Al Jazeera”. Link

And several FC Valencia players and a Spanish journalist reported a corona infection after the 4-1 defeat to Bergamo in Milan. A large demonstration by the Spanish Vox party and mass events for International Women’s Day in early March then carried the disease further in Spain. In addition, people in both countries long denied the dangers – kissing and hugging at the welcome were still practised, as the website Archyde.com noted. Link

Losses on the Asian stock exchanges

Which brings us to the successful drastic countermeasures in Asia with social distance, quickly closed borders and radical quarantine. In China the CSI-300 crumbled on Thursday by only 0.7 percent to 3,698 points. But in Japan the Nikkei lost a whopping 4.5 percent to 18,664 points.

Wall Street in the grip of politics

On Wall Street, classes staggered yesterday because of the political theater in the Senate. In the meantime, US Senator and still presidential candidate Bernie Sanders threatened via Twitter to stop the aid package if further regulations – for example in favour of workers – were not included. The Dow Jones Industrial closed with a plus of 2.4 percent at 21,200 points. In the meantime it had risen to over 22,000 points. After all, this was the first time since the beginning of February that the index recorded two consecutive days of gains. Yesterday, the broad-based S&P 500 gained 1.2 percent to 2,475 points. And the Nasdaq Composite even lost 0.5 percent to 7,384 points.
By the way, here’s a figure on the subject of saving everything and everyone: The blog ZeroHedge reported that the Federal Reserve bought assets worth 587 billion dollars between March 19 and 25 – which corresponds to 2.7 percent of the American gross national product. My goodness…

Professional trading pays off

If the recent horrendous swings on the stock markets have left you a little perplexed, here’s a little pack of optimism. If you’re smart, you can make a profit in these crazy times – it really works whether you trade online stocks or CFDs. We mentioned here recently that Pershing Capital Square has gone “all in”. Previously the fund had been short. In a letter to its clients, the hedge fund now reported the sale of puts it had bought before the crash for $27 million; the current proceeds: $2.6 billion.

That brings the day

The calendar of events on Thursday brings some interesting events, you can find the overview as always here: Market Mover

At 1:00pm the Bank of England will announce its interest rate decision, so traders in the British pound should be vigilant.
Date of the day are the weekly first applications for unemployment assistance in the USA, they run in at 1:30pm. A horror scenario is expected – the question is how strong the horror on Wall Street will be.
At the same time the US stocks are coming in.
Ditto the American gross domestic product for the fourth quarter – i.e. pre Corona and therefore not very interesting.
Otherwise, we are curious whether anything relevant for the stock market will come out of the summit of heads of state and government in Brussels.
The Bernstein Bank wishes successful trades

Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

Well, we’ve been waiting. On Wednesday, all the world markets are growing.Apparently, investors have realized that people can adapt to extreme situations very quickly, and investors adapt even faster. The U.S. and European markets began to buy back the shares of leading companies.

Chart of the day EUR/USD

S&P500 index is up 4%, DAX index is up 2%. It is a completely new challenge for the world economy when countries simply stop work, stop production and stay at home. Nobody knows how much such actions can affect the global economy. While the Fed and the EU have started to have a positive impact on markets, the trend is changing for growth, but for how long if the economy is almost dead?

Euro

On the optimism of coronavirus treatment in Europe, the euro starts to grow against the background of good statistics from the European Union. The European Union is at a crossroads. There’s a rift in society and values between states. Everyone makes their own decisions and thinks it’s right. Nobody knows how much it will affect the current situation. On Tuesday, the euro rises and even breaks through the 1.08 level.

Gold

Due to very serious optimism of investors, the gold was even on sale on Tuesday. Although, given the global situation, the replacement of gold for the stock market, which is about to fall down again looks very interesting. We think that the market will soon choose a direction for further action. The main thing is that in a crisis situation we try to exclude speculative deals for the sake of a one-time profit. Gold will still go up because of any less serious news on economic problems.

Pound Sterling

Yes, it’s a currency that’s been respected for a very long time. And now that the UK is having very serious problems with Brexit as well as isolation, many people think that the currency is over. The UK has the strongest quarantine. The UK is taking very serious measures to stimulate the economy, so the pound should stabilize in the current situation.

What’s waiting for us today?

08.00 UK retail sales volume
13.00 UK Interest Rate Decision
13.30 US GDP

Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

25.03.2020 – Daily Report. The German leading index is lurking just below the magic mark. Investors in global trading are celebrating the agreement in the gigantic US rescue package. However, the Ifo Institute dampened the buying mood.

New profits in Frankfurt

Prices are soaring: After a brilliant Tuesday, the bull run continues at noon on Wednesday. All prices on the trading platform in the German leading index initially glowed green. The daily high in the DAX was 10,131. Recently, however, prices have been crumbling again, with the index still holding its ground with a plus of 1.6 percent at 9,855 positions. Yesterday, the price indicator had risen 11 percent to 9,701 points. US futures were still up about 1 percent.
Gigantic stimulus in the USA
Politics in the USA has created a buying mood: Republicans and Democrats have agreed on a massive rescue package of 2 trillion dollars, as the Republican majority leader, Mitch McConnell, and the Democratic minority leader in the Senate, Chuck Schumer, told journalists. Now the Senate must vote and the House of Representatives must agree to what could happen this Wednesday.

Gigantic stimulus in the USA

Politics in the USA has created a buying mood: Republicans and Democrats have agreed on a massive rescue package of 2 trillion dollars, as the Republican majority leader, Mitch McConnell, and the Democratic minority leader in the Senate, Chuck Schumer, told journalists. Now the Senate must vote and the House of Representatives must agree to what could happen this Wednesday.

German economy in shock

In Frankfurt, investors recently took profits after the recent recovery. On the other hand, the Ifo-Institute caused a bang on the floor: According to this, the fear of recession triggered by Corona is even greater than expected in the German executive floors. The final business climate index slid from 96.0 points in February to 86.1 points in March. “The German economy is in shock,” commented Ifo President Clemens Fuest. According to Ifo, production losses and costs for the state in Germany will amount to 255 billion to 729 billion euros. Economists expect a slump in economic power especially in the second quarter.

It is not over yet

There was also a small reminder from the Czech Republic for the optimists that Corona is still raging. The head of the crisis team, Roman Prymula, told Czech television that the border could remain closed for two years to prevent a second and third wave of infection from Europe. Our neighbouring country has so far been only slightly affected by the virus.

Course fireworks in Asia

Stock markets in Asia reacted to US policy. In China, the CSI-300 climbed by 3 percent to 3,723 positions. In Tokyo, the Nikkei soared by 8 percent to 19,546 points.

Monster rally in New York

Yesterday, the Dow Jones posted its largest daily percentage gain since 1933 due to the development in Congress. The US leading index rose by 11.4 percent to 20,704 points. The S&P 500 gained 9.4 percent to 2,447 jobs – the biggest percentage gain since October 2008 – and the Nasdaq Composite Index gained 8.1 percent to 7,417 jobs.
On the blog “ValueWalk”, the brokers of gorilla trades referred to the current under the surface, in addition to politics: The number of new 52-week lows on Wall Street has recently decreased. The rally could be more than a “one-day wonder”. But then the experts restricted that it might be too early to call a final bottom for stocks. Well, then…

That’s what the day brings

The diary brings some interesting events for traders, the overview can be found as always here: Market Mover

In the afternoon, the data for incoming orders for capital goods in the USA are due at 1:30pm.
This is followed at 2:00pm by the FHFA house price index
And at 3:30pm the weekly oil report from the US Department of Energy.

The Bernstein Bank wishes successful trades!

Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

On Tuesday, there was some positive news about the fight against coronavirus in the European Union. If the doctors manage to stabilize the situation, the number of first infections will probably decrease soon.

Chart of the Day – DAX

What do we see in the markets? Already on Tuesday, net sales in the European markets switched places with buying. Due to support measures and excess of cheap liquidity, investors began to buy back shares of large companies. Many believe that the shares of giants were unfairly sold out. The DAX index on Tuesday rose by a record 11%.

Euro

On Tuesday, the main data on business activity in the European Union were released. And the results are disappointing. The Business Activity Index in France was at its lowest level since it was calculated, while the German index fell to 34.5, which is 11 points below the forecast, and indices of Italy were not published at all. The Euro, like the stock market, is trying to buy back, but there is probably a period of high volatility due to the great uncertainty in the markets. The euro rate will now move from any information on the coronavirus and on measures taken by the government to stabilize the economic situation.

Gold

The gold is on the top. On Tuesday, the price per ounce adds more than 6% and passed the $1600 mark without any problems. As we expected, the gold will be entered by large investors who do not want to make any actions with the unstable stock market, as well as do not want to hold the currency, as it is likely that due to huge financial assistance from national banks, the currency will become cheaper. Once again, the level of $1700 is much closer than a week ago and at this rate gold may try to break through it very soon.

Canadian Dollar

The Canadian dollar has fallen completely against the U.S. dollar and is at almost 15-year lows. The USDCAD pair traded at 1.45 on Tuesday. The low oil price, rising unemployment due to coronavirus outbreak, had a very negative impact on the currency. Also real estate sales fell by 4.4%, which added negative for investors. In general, investors and traders will have to get used to the disappointing data because it is unlikely that the current situation will improve in the next weeks.

What’s waiting for us today?

08.00 UK Consumer Price Index
13.30 IFO business climate index in Germany for March
15.30 US crude oil reserves

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.