News

The U.S. held a “Super Tuesday” at which the choice for future candidates from the democratic party was made. The leader was Joe Biden, former vice president, who tried to participate in the presidential race more than once. The second was Bernie Sanders, one of the most “long-playing” politicians in the US Congress. He was also one of the candidates for the presidential election in 2016.

The S&P500 chart of the day

Markets were waiting for a decision, and already on Wednesday the American primaries started working. In general, we saw a positive result after such a serious decline last week. Indices went up and started to recover. DAX is growing slightly more than 1%, S&P500 and Dow Jones are almost close and adding 3%. Investors were given a chance to catch their breath and gather their thoughts. Primaries in the USA changed the news background on coronavirus and drove away the panic.

EURO

As we estimated, the overbought Euro declined slightly in the trading session on Wednesday. It is a market, so it cannot move up or down all the time. There should be some moments of correction. Surprisingly, the Euro has once again pushed back from the 200 SMA. A strong level is letting itself be known. All investors are waiting for statements from ECB. Most likely, the European Central Bank will have to take some monetary easing actions and this is likely to put pressure on Euro. It is quite possible that the Euro correction will continue and the price will try to break through the 200-day moving average once again.

Japanese Yen

It’s been a long time since we talked about Japanese Yen. Currency which has always been considered a “refuge” is on the verge of losing its authority. Japan’s economy shows very disappointing figures, the Central Bank promises twice as much as it does. Against the backdrop of the spreading coronavirus, the Japanese Yen was weakening very quickly. Now it strengthened rapidly against the weakening dollar. Does this mean that the yen still has its strength as a stable currency for saving? In the near future, we will see the answer because the rate of investment in the Japanese economy is declining. It is quite possible that after the release of all the risks to the Japanese economy due to the current situation, the Yen will weaken significantly, as local investors will have to look for new offshore investments to make profit.

What is waiting for us today?

01.30 Trade balance in Australia for January
11.00 OPEC meeting
18.00 Statement by the Governor of the Bank of England

Important Notes on This Publication:

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

04.03.2020 – Daily Report. No coordinated action by central banks and treasury secretaries. Instead, the G7 Finance Ministers and the Monetary Guardians only report the usual official talk. After all, the Federal Reserve has acted and cut interest rates. But that is not enough for Wall Street. It is enough for the DAX.

Frankfurt Stock Exchange picks up again

Perhaps the concerted action will come after all. The DAX rose by 1.1 percent to 12,117 points on Wednesday noon. Perhaps some smart US brokers already know more: The contract on the Dow Jones recently rose by 2.2 percent, the futures on the S&P 500 climbed by 2 percent. Hope was also circulating because apparently an arthritis drug from the Swiss pharmaceutical company Roche promises hope for seriously ill corona virus patients.

Disappointed hope after G7-Call

Yesterday afternoon, the US market was disappointed by the G7 conference call. Apparently, the group of states is trying to keep their already meagre powder dry as long as possible. Or the leading economic powers are powerless against Corona, the floor said. Yes, Australia had previously lowered interest rates – but not as much as had been hoped for. And Japan had bought ETFs on the market worth almost 5 billion dollars. But what about Europe? Where are the coordinated stimulus packages? What about the International Monetary Fund?

Interest rate cut not convincing

The Federal Reserve’s interest rate move was also sometimes interpreted as a sign of panic. Because of Corona, the US Federal Reserve had lowered the key interest rate by 0.5 percentage points. Fed Chairman Jerome Powell explained that it was clear that the virus was already having an impact on the growth of many countries and the global financial markets.

In fact, according to “ZeroHedge”, this was the first 50-point cut between two regular interest rate meetings since October 8, 2008 – at that time a certain Jerome Kerviel had put the Societe Generale in a precarious position with a few imploded billion-dollar deals. Some – such as US President Donald Trump – did not go far enough with the 50 basis points.

Goldman Sachs immediately took the floor again. Chief economist Jan Hatzius expects another 50 basis points; or 25 points to the regular meetings on March 18 and April 29. Others, such as analyst Michael Every of Rabobank, generally questioned the sense of interest rate cuts. Every asked: “what level of interest rates is required to incentivize you to risk the death of yourself and your family? Lower interest rates would not help at all if people were to retreat for weeks at home like in a bunker and the supply chain would be broken.

Disappointment in New York

So the Fed couldn’t please anybody. The Dow Jones jumped about 700 points after the announcement, but soon gave up the gains. The Dow recorded a minus of 2.9 percent to 25,917 points at the closing bell. What a vola – golden times when you trade CFDs… The S&P 500 lost 2.8 percent to 3,003 digits. And the Nasdaq 100 dropped 3.2 percent to 8,594 points. Investors returned to safe havens: The yield on 10-year Treasuries dropped below 1 percent for the first time.

Mixed trend in Asia

In Asia things were quieter on Wednesday. The CSI-300 in China rose by 0.6 percent to 4,115. Unsurprisingly, Hong Kong followed the Fed and lowered its key rate from 2.0 to 1.5 percent. The Hang Seng nevertheless lost 0.2 percent to 26,222 points. The Nikkei index squeezed out a small plus of 0.1 percent to 21,100 points.

The Democrats’ death wish

But why did the US futures rise recently? Perhaps US politics is a factor. After everything had looked like a communist presidential candidate Bernie Sanders, the Democrats now had their hearts set on the presumably highly corrupt Joe Biden. He won on “Super Tuesday” after the last count in eight states. A formidable comeback. Sanders was successful in only three states, including the voter-rich California. Wall Street is pleased, because with such candidates the chances of Donald Trump are increasing. Or do the brokers applaud because there is an alternative to Bernie, any alternative at all?

By the way, Kiev should soon start official investigations against Joe Biden, LibertyNation.com reported. This is because Biden had forced Ukraine to fire Attorney General Viktor Shokin, or otherwise to forgo loans of $1 billion. Shokin made an affidavit stating that he was investigating the Burma gas company where son Hunter Biden, without special skills, was earning up to $50,000 a month. But let’s wait and see if that happens. In any case, crisis management in the Covid-19 affair, the corona crash and a possible US recession could completely reshuffle the cards in the presidential election.

What the day brings

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

For example, the ADP index for employment in February is first presented at 14.15 in the USA.

At 16.00 the ISM-Index Services for February follows.

At the same time, the Canadian central bank announces its interest rate decision.

And the weekly oil report comes in.

At 8:00 pm the Fed’s Beige Book is published.

And after 10 p.m. Deutsche Börse reports the composition of the indices.

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 we saw central banks start taking measures to stimulate the economy. The first bank was the Australian bank, reducing the refinancing rate by 25 basis points, to 0.5%. This was followed by the US Federal Reserve, which also reduced the interest rate by 25 basis points to 1%. The heads of G7 financial institutions promised to coordinate actions and prevent the development of problems in the global economy.

Chart of the day – Gold

The situation at the ECB is a little bit more complicated. The limited threshold for the reduction of the refinancing rate does not allow for a strong turn in this direction. The head of the French central bank said that the ECB policy had already been adaptive and contributed to the stabilization of the euro area economy. If necessary, the ECB is ready to take liquidity support measures for individual banks and companies.
These actions and statements certainly do not bring a momentary effect, but will be working out only in the medium term. Therefore on Tuesday the world indices show mixed dynamics. The DAX index closed on 1% plus. The S&P500 index is down by about 2%, the DOW index is down again and is also losing a little more than 2%.

EURO

Against the backdrop of lower rates in the U.S., the dollar is losing its position. The Euro is growing, but slows down significantly. If you look technically, the Euro is in the overbought zone for a certain period of time, and it is likely that we can adjust down to 1.1040. In the near future, we will be watching the ECB, which might make some adjustments to the monetary policy, which might seriously affect the current exchange rate.

GOLD

On Tuesday, gold completely recovered its position and very seriously targeted the level of $1700 per ounce. The easing of monetary policy is the best news for gold holders. With a lower interest rate, the cost of gold ownership is declining, which increases the demand for the precious metal. If the gold continues the trend, we will probably see another good momentum that will go to the level of $1670, and further $1700 per ounce.

What awaits us today?

01.30 Australian GDP
10.30 UK PMI Composite Index for February
14.15 February Non-farm payrolls in the USA
16.00 Canadian interest rate decision

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.

03.03.2020 – Daily Report. Dead Cat Bounce or countermovement? The central banks will decide. And they will decide today at 1:00pm. After last week’s coronageddon, the stock market experts in Frankfurt, just like their colleagues in the USA, are now betting on intervention by the Fed and Co. The Dow is setting the strongest day ever. The DAX rises sharply.

Prices in Frankfurt rise

Wonderful times for traders: After the heavy sell-off, prices are now rising again seemingly unchecked. On Tuesday morning, the DAX recorded a plus of 2.8 percent to 12,190 positions. Hopes of concerted action by the central banks continued to dominate events. Woe betide if this hope is disappointed… This afternoon we know more – the most important date of the year is coming up.

Do or die from 1:00 pm

If you are trading CFDs or online shares, it will be really exciting today from 1pm. Then you need a broker with powerful servers and a Bafin license – because then the central banks of the leading seven industrialized countries (G7) will discuss the next steps in the Corona crisis. From 1 p.m. Central European Time, the finance ministers of the respective countries will also be connected in a telephone conference. According to CNBC, the meeting will be chaired by US Treasury Secretary Steven Mnukhin and Fed Chairman Jerome Powell.

After the latest intervention signals, inactivity would be the signal for a new sell-off. By the way, Saxo Bank also dampened medium-term hopes: a short-term bounce would not alleviate the pain for the corporate sector caused by Covid-19. We add: It’ll be a balm for the wounds of the stock-market bulls.

Always new requests to speak about stimulus

Already yesterday evening the European Central Bank spread hope: ECB head Christine Lagarde declared that the central bank was ready to take appropriate and targeted measures. Corona, she said, posed a threat to the economic outlook and the functioning of the financial markets.

French Finance Minister Bruno Le Maire followed up on Tuesday on Twitter, calling for a “strong and coordinated” response from the eurozone and the G7 countries in the fight against the consequences of the Corona virus.

And US President Donald Trump, before the G7 central banks’ conference call, once again called on his own monetary watchdogs to cut interest rates sharply. “Our Federal Reserve lets us pay higher interest rates than many others, even though we should actually pay less,” he twittered.

Australia lowers the prime rate

Meanwhile, the Australian central bank lowered its key interest rate to a record low on Tuesday. The Reserve Bank of Australia (RBA) cut the rate from 0.75 to 0.5 percent. RBA head Philip Lowe said the corona virus was a “significant” burden on the Australian economy.

Asian stock market participants wait and see

Despite all this, there was no real buying mood on the stock exchanges in Asia. The CSI-300 in China rose 0.5 percent to 4,091 points. The Nikkei in Tokyo lost 1.2 percent to 21,083 jobs.

Record day for the Dow

Wall Street had reacted very differently that evening: According to “ZeroHedge”, the Dow Jones experienced its strongest day ever and shot up 5.1 percent or almost 1,294 points to 26,703 points. The S&P 500 rose by 4.6 percent to 3,090 points. And the Nasdaq 100 gained 4.9 percent to 8,878 points. The news agency Bloomberg gave the starting signal for the mega rally with the announcement of today’s emergency call of the G7 countries mentioned above.

Another explanation for the bull market was provided yesterday by Morgan Stanley: hedge funds entered the market on Friday. Specifically, the investment bank’s prime brokerage reported: “the buying of US equities among Equity L/S funds on Friday was the biggest we’ve seen in the past decade. Where L/S stands for long/short. We would have liked to have known that earlier…

That’s what the day brings

Besides the G7 meeting at 1:00pm German time, the diary is rather empty. As always, you can find the overview here: Market Mover
The API oil report is due at 10:30pm

And on Super Tuesday, the Democrats will make an important preliminary decision on their presidential candidate.

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 Monday, the markets showed a good recovery. Investors have high hopes for easing monetary policy and increasing liquidity amid the impact of the COVID-19 virus on the global economy. Heads of Fed, Bank of Japan and Bank of England said that they will do their best to stabilize financial markets.

EUR/USD chart of the day

After last week’s record-breaking declines on the stock exchanges, the weekend was very opportune to “cool down” traders and give them time to make decisions. Positive statements of the Fed’s head on support of the US economy during the epidemic, as well as decisive actions of Bank of Japan on liquidity support encouraged traders to buy. S&P500 index is up 2.1% to 3031, DOW index is up 2.5% to 26200. The DAX index did not go up and remained at the level of 11850.

EURO

The Euro rose to a five-week high against the US dollar on Monday. Following the Fed’s head’s announcement of a likely policy easing already at the March meeting, traders are betting that other world banks are likely to follow the US and soften their financial policy, while the ECB is very limited in its rate cuts compared to the US. German PMI showed a slight slowdown in the decline, which also had a positive impact on the rate. At this stage, the growth is probably exhausted and we will see a slight correction.

OIL

Brent oil is growing by almost 5% on Monday, in clear response to claims that world banks will support their economies during the Coronavirus epidemic. Positive expectations for the decision to reduce production at the OPEC meeting add optimism to traders. All attention will now be focused on the OPEC meeting, as well as the growing conflict in Syria. Crude oil price seems to continue to recover all week, and at the OPEC meeting increased volatility is quite possible.

What awaits us today?

04.30 Australian interest rate decision
10.30 UK Construction Business Index for February
11.00 European Union Consumer Price Index for February
16.00 Unemployment rate in the European Union

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.

02.03.2020 – Daily Report. The besieged bulls in global trade are counting on concerted action by the major central banks. A new wave of money should help in the economic defence battle against the corona virus. Indeed, Japan is making the first move – and the Fed is also signaling its intervention. But then the ECB speaks. The DAX gives back its early gains.

The DAX tries the countermovement

That was probably nothing: First the DAX rose to 12,119 points. Two reasons for this: Italy will provide aid to the economy of up to 3.6 billion euros next week. Germany is considering putting together an economic stimulus package, Federal Finance Minister Olaf Scholz (SPD) told the newspaper “Welt am Sonntag”. It would be time for a technical recovery in normal times: The Relative Strength Index for the DAX had been deep in oversold territory on Friday with only 19.9 points.

Damper from the ECB

After the initial recovery, however, the DAX turned south. Most recently, the leading German index was again 0.3 percent weaker at 11,857 points. This was because France’s central bank chairman put a damper on hopes of concerted global action by the central banks. According to Francois Villeroy de Galhau, the European Central Bank is prepared to support the economy if necessary because of the spreading corona virus. However, additional steps are not yet necessary, the ECB council member told the French radio station BFM Business.

Japan makes a start

Previously, Japan had been fuelled by hopes of a global intervention by central banks. The governor of the Bank of Japan, Haruhiko Kuroda, said on Monday that the central bank would closely monitor further developments and provide enough liquidity for stability in the financial market. With his breaking news Kuroda supported the stock market. The Nikkei index finally recorded a plus of 1 percent to 21,344 points on Monday. Previously it had fallen to a six-month low of 20,873 points. In the coming weeks, the Bank of Japan plans to buy billions of assets, it was already announced on Friday.

De CSI-300 finally rose by 3.3 percent to 4,070 points on Monday. In China, factory activity has plummeted to its worst level since the beginning of the recording. No wonder: Corona is paralyzing large parts of the economy. Which also boosted hopes of fresh money in China.

Possible concerted action by central banks

On Friday, the Fed had delivered the steep template for speculation on a global concerted action: US Federal Reserve Chairman Jerome Powell made his customary cryptic explanation that the Fed would intervene if necessary to cushion the economic consequences of the Corona crisis. In view of the “risks” posed by the virus, Powell said the Fed would “use its instruments and act appropriately to support our economy”.

Analysts hope for up to 100 basis points

Goldman Sachs poured plenty of oil into the fire of hope yesterday, Sunday: The goldmen expect the Federal Reserve to move rates by 50 basis points soon, perhaps even before the next regular meeting on 16th March. This move would be accompanied by a further 50 basis point cut in the second quarter. In addition, this is part of a concerted action by the world’s major central banks. So that was the rumour in the world.

The Bank Policy Institute lobby group was singing the same horn – according to MarketWatch, it expects an interest rate move of 50 to 75 basis points. The interest rate move will probably be announced on Wednesday morning. By the way, the author of the speech is Bill Nelson – and he once worked as an economist for the Fed, so he should still be well-connected.

Small rebound in New York

Of course the corona virus Sars-CoV-2 had dominated the events on Wall Street on Friday as well. At least the indices turned upward due to the Fed’s intervention, so that the losses were contained. The Dow Jones Industrial slid well below 25,000 points on Friday, closing down 1.4 percent at 25,409 points.

The Dow thus posted a weekly loss of 12.4 percent. The decline was even higher only during the financial market crisis in October 2008, when the US leading index posted a 10 percent drop in February – the worst return in eleven years.

The S&P 500 temporarily lost 3 per cent on Friday before picking up again. The final decline was thus moderate at 0.8 percent to 2,954 points. The Nasdaq 100 even managed to gain 0.3 percent to 8,461 points at the end of the day. Interestingly enough, the Nasdaq 100 bounced up to 8,139 points on Friday after a deep red start, bouncing right on the 200-day line. So even in times of panic, the chart analysis is still valid.

What the day brings

The diary on Monday brings some interesting events, you can find the overview as always here:  Market Mover
Thus, the ECB Monthly Bulletin for February is due at 3:45pm.

At 4:00pm the ISM Industrial Sector Purchasing Managers’ Index for February will also follow in the USA.

And at the same time the US building expenditures are announced in January.

The Bernstein-Bank wishes successful trades and a profitable week!

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.

One of the most challenging weeks for the entire world economy since the global economic crisis has ended. U.S. indices have fallen more than 10% from record highs. Many analysts believe that there are enough reasons for global economic growth and the current decline is only a correction.

Chart of the day – Dow Jones Industrial

A sufficient number of important economic indicators are coming out this week, which should clarify the situation a little and provide data for investors. On Saturday the data on the production index in China was released, which fell to record values for the last 5 years. This way China did not fall even during the global crisis. All this raises great suspicions for investors whether the second economy in the world will be able to recover as quickly as investors hope. We will also keep a close eye on the comments of the Fed’s executives, as a rate cut was expected in March.

Currencies

We have a super Tuesday coming up this week. Investors will follow the voting in 14 states of the United States, which will determine the leaders in the presidential race. The US dollar is still showing weakness. The Euro is making another weekly high on Friday and closing at 1.1029 . The Japanese Yen strengthened very

strongly on the background of the market sell-off. All this leads to investors looking for a private place to save their money and not to take strong risks.

Oil and Gold

Such a rapid decline in oil prices has not happened for more than a year. The pressure on OPEC is rising. Saudi Arabia wants to further reduce oil production in order to restore demand. Although OPEC has already met this week, there is no optimism that oil prices will recover quickly.

Gold fell on Friday and experienced the worst decline since 2013. Such a fall together with the rise of the Japanese Yen can only be described as a normal profit taking. For a long time there were no pullbacks in this market and here they appeared. The simultaneous fall of the US dollar has further affected the price of the precious metal.

Spring begins, and the markets will come to life. We are looking forward optimistically and hope that in the near future the world economy will survive all the shocks and continue to grow.

What’s waiting for us today?

02.45 Manufacturing Index from Caixin in China

9.55 German Manufacturing Index for February

14.30 UK Manufacturing Index for February

16.00 US Manufacturing Index for February

Important Notes on This Publication:

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

28.02.2020 – Daily Report. The DAX loses over 600 points – and rushes below the 12,000 mark. Global trading plunges into nothingness. The fear of the corona virus and a crash of the global economy can no longer be stopped. And there is probably still some air left: The fear indicator VIX has reached just over half of what it was at the height of the 2008 financial crisis.

Mega-Crash in Frankfurt

The downward trend continues: The German leading index lost 4.5 percent to 11,817 points in early Friday trading. The daily low was 11,727. Before the weekend and possible new bad news about Covid-19, nobody wanted to sit on a portfolio full of shares. With a minus of a good 13 percent, the German index was heading for the biggest weekly loss for eight and a half years.

The 200-day line at 12,641 points is now nothing but a waste of time. Chart analysis is no longer helpful. Only a cool head and a broker with powerful servers – and please with Bafin license. Especially since the contract on the Dow Jones fell 2.7 percent and the futures on the S&P 500 were again 2.4 percent weaker.

Sellout everywhere

Stock markets worldwide are probably experiencing the weakest week since the financial crisis. The MSCI world index has already lost 8.9 percent from Monday to Thursday. Only in November 2008 was the loss higher at 9.8 percent. CNBC reported several markets that have now officially entered into a correction – this is how a loss of 10 percent from the 52-week high is described.

As there are: The Nikkei in Japan, the Shanghai Composite in China, the Hang Seng in Hong Kong, the Kospi in South Korea, the ASX 200 in Australia and the Straits Times in Singapore In Thailand, the SET Composite even slipped around 20 percent off the top. We spare tormented long investors the details. And we only report Friday’s data for the Nikkei: minus 3.7 percent to 21,143 points. The Chinese CSI-300 dropped 3.6 percent to 3,940 digits.

New York bear market

The Dow Jones Industrial index lost almost 1,200 points yesterday, falling 4.4 percent to 25,767 points. Since its record high about two weeks ago, the US leading index has now fallen by almost 13 percent. The S&P 500 also fell 4.4 percent to 2,979 points. And the Nasdaq 100 slipped by 4.9 percent to 8,437 points.

A small consolation for the cops: The high-tech indices have yet to break the 200-day barrier. This line runs at 8,388 points on the Nasdaq Composite and 8,134 points on the Nasdaq 100. No wonder, while the Old Economy is coming to a standstill with the standstill of factories, logistics or tourism, the New Economy is still running a little further via the Internet.

Fastest correction ever

Meanwhile, the VIX has jumped further up to 44.03 points. Something else might work: In the financial crisis of 2008 the fear indicator had reached the 81 mark. Nevertheless: Clever bulls keep their powder dry. Once everyone has sold, the downward trend can no longer continue. Moreover, the past few days marked the fastest crash of all time. The splendid blog ZeroHedge has just listed the days it took to send the S&P 500 times easily 10 percent down (see indices left and right).

Targeting the lira and rouble

And right in the middle of the crash and the possible standstill of the world economy, the conflict between Turkey and Syria is escalating. Perhaps even Russia will be drawn into a regional war. Which would probably do neither the rouble nor the Turkish lira any good.

What the day brings

At the end of the week, the diary brings some interesting events, you will find the overview as always here: Market Mover

However, it can hardly be assumed that the data will be observed at all in these times. Nevertheless:

At 2:30pm the Chicago PMI for February begins.

Ditto personal income and expenditure in January.

And at 4:00pm t he consumer confidence of the University of Michigan will follow.

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 spread of the virus outside China has already exceeded China’s own. In the United States, the first infections appear that have nothing to do with China or with traveling to regions with the infection. In Europe, the virus is rampant. Italy, France are on the verge of an epidemy. Other countries are suffering. There are fatal outcomes. Analysts are raising alarm bells.

The chart of the day – Brent

The American market continued its strong decline on Thursday. During the trading session, the major American indices were down by more than 2%. Many analytical agencies already forecast that the majority of American companies will have problems with profits in 2020. The Bank of America has reduced its global growth forecasts to minimum values. Further it will be even better, if there will be no information in the world on how to treat the virus effectively and how to improve the economy.

EURO

The Euro looks great against a falling dollar. On Thursday, the European currency reached a three-week high at 1.1005. The probability of the US refinancing rate reduction reached 70% already in March. The yield of 10-year bonds turned out to be at 1.25%, which is almost a historic low. The US dollar is losing ground on all fronts. Technically, the trend for the euro remains bullish. The support remains at 1.0955. From above, we have a strong resistance at 1.1000, if the Euro breaks this level and is able to consolidate there, we are waiting for a further exit at 1.1025 and above.

Oil

On Thursday, oil reached its lowest level since 2017. What does it mean? Inventories in the U.S. have declined, economic indicators are falling all over the world. The demand for oil will also fall, because black gold is involved in most economic processes. OPEC is trying to calm down the market and assure that the demand for oil will not decrease more than 310 thousand barrels a day, but does not do it very decisively. Brent trades at $51.20 per barrel on Thursday.

What is waiting for us today?

00.30 Japan Consumer Price Core Index
09.55 Change in the number of unemployed in Germany for February
14.30 GDP per year in Canada

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.

Wednesday was a day for traders when they got some rest. The sharpest fall in major trading indices on Tuesday was definitely a shock for investors. So on Wednesday, some players tried to recoup their lost positions and stabilize the situation.

Bitcoin chart of the day

Will things from Monday and Tuesday happen again? No one can say yet. Many analysts say it was all predicted earlier. S&P500 index is slightly up 0.5%, Dow Jones index is up 0.15%, DAX was trading around zero during the trading session.

Australian dollar

Problems in Asia have a very serious impact on Australia because it is a major supplier of raw materials to the region. Due to the closing of factories and the decline in production in China, the Australian dollar is close to 0.63, which is the lower limit of the range in which this currency has been for 10 years. It is likely that the central bank of Australia will have to lower the refinancing rate again. Of course, until the situation with the virus clears up, the Australian dollar will depend on it. We shouldn’t expect any growth anytime soon. During the whole trading day the Australian dollar decreases and trades at the level of 0.6550. The lower level at 0.63 is a very strong support.

Bitcoin

On Wednesday, no wonder happened and all the major cryptocurrencies were falling all day long. Bitcoin lost 7%, which really upset the cryptointusiasts. The major crypto cannot find support at all, even below $10000. Many say that Warren Buffett himself was to blame, who said during an interview on CNBC that he does not keep the cryptocurrency in his investment portfolio at all, and even less will buy it in the future. Cryptocurrencies are very unpredictable assets, so trading decisions should be made only when the currency finds support. The nearest level for bitcoin is $8500.

What is waiting for us today?

08.00 UK Housing Price Index
14.30 Base orders for durable goods in the USA
14.30 GDP per year in the 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.