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24.02.2020 – Daily Report. The bears lead the bulls to the scaffold: the prices know no stopping. After the sharp sell-off on Wall Street, the DAX breaks the 200-day barrier.

Frankfurt Stock Exchange crashes further

Where is the crash going to stop? On Ash Wednesday, the DAX initially slipped to 12,370 points. This means that it has easily broken through the 200-day line at 12,638 points. The last time the DAX had been below this moving average was at the end of August 2019. At least the line seemed to attract new buyers again – the indicator ventured a slight rebound. Around noon, the DAX was still 1.7 percent weaker at 12,569 points.

The prices of US futures were pulled down: The Dow contract was down 0.6 percent and the future on the S&P 500 was down 0.4 percent. After Monday’s crash, we had warned you in a special report with reference to Morgan Stanley against another sell-off – now we are in the middle of it.

Covid-19 and no end

Meanwhile, economists expect the possibility of a recession in Italy as a result of the security measures to contain corona. The economic metropolis of Milan is largely paralysed. It remains to be noted: the epidemic could spread throughout Europe. Except for those states that have no problem with it, such as Hungary. We also suspect that sooner or later Russia will be affected because of its close trade links with China.

The World Health Organisation suspected that the world was not prepared for the virus. The US public health authority CDC warned of a spread of coronavirus also in the USA. And this despite the “aggressive containment strategy” of the United States, because it is becoming increasingly difficult to slow down the introduction of the virus because of its spread in other countries./p>

Losses in Asia

Meanwhile South Korea has declared the highest alert level for infectious diseases. As a result, the CSI-300 in the People’s Republic of China slipped by 1.2 percent to 4,073 points. And the Nikkei index lost 0.8 percent to 22,426 points.

Helicopter Money in Hongkong

Meanwhile, Hong Kong is trying to cushion the Corona losses with financial aid. Each permanent resident of the former crown colony is to receive 10,000 HK dollars, or 1,100 euros, in cash. Finance Minister Paul Chan assumes that the economy in Hong Kong will grow between minus 1.5 percent and plus 0.5 percent in 2020.

Heavy bear market in New York

Investors in the USA fell into fear yesterday. The Dow Jones lost 3.2 percent or almost 900 points to 27,081 points. This is the lowest level it had last reached last October. The Dow only stopped just below the 200-day line. The S&P 500 lost 3 percent to 3,128 points. And the Nasdaq-100 slipped by 2.7 percent to 8,835 points. Meanwhile, the yield for ten-year US bonds slid to a record low of 1.3055 percent.

Strong rise in the fear indicator

Only one hope for the bulls: The fear indicator VIX is now overbought. In just a few days it had risen from just under 12 to over 30 points. Now the 14-day Relative Strength Index is trading at 79.28. Was that it?

In a panic, it can go much more into overbought territory. Typically, a real, total, all-consuming, devastating fear is accompanied by corresponding headlines in the mainstream media; and losses in the major indices of up to 10 percent. On the other hand: The Dow recorded its biggest two-day loss ever in absolute terms on Monday and Tuesday. Everything depends on whether a vaccine is found quickly.

What the day brings

The diary brings little distraction from the epidemic. You can find the overview as always here: Market Mover

In the USA, for example, the figures for owner-occupied homes that have been sold are reported in January. This at 16.00.

And at 16:30, the weekly oil report is due.

The Bernstein-Bank wishes strong nerves and 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.

Tuesday was another day of big sale in all world markets. The coronavirus scares everyone so much that most investors want to sit in “quarantine” this hard time. The infection zone is expanding, uncertainty is growing, and companies are calculating possible losses. Further sales may well continue.

DAX chart of the day

STOCK MARKETS

Throughout Tuesday, not a single positive piece of information appeared in the world news that the virus had begun to be dealt with. Although many analysts thought that no virus could have a global impact on a strong economy, this is not the case. In the world already now the majority of companies start to calculate the lost profit because of various quarantines, production stoppages and fluctuations of prices for raw materials. And they put in very substantial amounts, up to 20%. It is simply impossible to predict the market movement in this situation. On Tuesday the DAX index loses another 1.8%, Dow Jones 1.6%, S&P500 1.75%.

US Dollar

In order not to talk about the world’s major currencies, it’s better to talk about the U.S. dollar. The serious growth since the end of January had to stop somewhere. Only technically, the rebound of the US dollar index from the level of about 100 could have been predicted with a probability of 95%. This is a very strong psychological level and of course a sufficient number of investors fixed their profits near this level. Therefore, correction to the major world currencies has started now. While there is uncertainty in the stock markets, the US dollar index is decreasing to the level of 98.91 . Probably, the correction should end soon and the upward trend will continue.

OIL

Black gold is falling for the fourth consecutive trading day. Companies cannot assess the risks they will face in the near future, so the demand for oil is inevitably falling. OPEC cannot agree on a reduction in oil production because of Russia. Even options are being considered to bypass the veto and reduce OPEC+ production in order to somehow compensate for losses from the spread of virus. Brent loses 2.3% on Tuesday and trades at $54.4 per barrel. We follow the data on U.S. crude oil reserves on Wednesday. If the forecast is confirmed, the price may fall even lower.

What is waiting for us today?

14.30 ECB Chairman Christine Lagarde’s speech.
16.00 New housing sales in the U.S.
16.30 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.

25.02.2020 – Special Report. After Monday’s bloodbath some brave bulls hope that the Corona panic was the last heavy sellout. But in the meantime many brokers are concentrating on other, worrying statements. They say that we are only at the beginning of the end. For perhaps Covid-19 is the dreaded Disease X – the global super disease that experts have long been warning about. The consequences for the stock market are incalculable.

Corona equals Disease-X

Unfortunately, extremely worrying reports are currently circulating among investors. According to a report in the blog “Summit News”, Marion Koopmans, Professor of Virology and advisor to the World Health Organization, recently stated that Corona could be the feared Disease X, which experts have been warning about for years. The outbreak could become exactly the case for which the globalised society must prepare itself.

Expert: Up to 70 percent of the world population is infected

And recently Marc Lipsitch, Profossor of Epidemiology at Harvard told the “Atlantic” that corona “will ultimately not be containable” – the virus cannot be contained. In the coming years, 40 to 70 percent of the world’s population will become infected with Covid-19. Lipsitch also gave the green light in some cases: this means that not all victims would become seriously ill – many would only develop mild cases of the disease or even asymptomatic consequences. But he also said that the 100 to 200 people infected in the USA were enough to spread the disease.
These warners are not just any conspiracy theorists – they know what they are talking about. Ergo, the really big crash on the stock market could still be coming.

Imminent end for the global economy

Because in the real economy, the current situation can be described in this way: Corona is paralysing the supply chains. And that is why the economy is crashing. Entire cities in China are sealed off, people stay at home out of fear. Foxconn, for example, is paying its workers special bonuses to show up at work to produce smartphones for Apple. But only a few come. If this situation spreads to the USA, South Korea, Japan, Italy and at some point Germany, the global economy will grind to a halt.

Supply Chain Shock

Goldman Sachs has just warned of the consequences of a prolonged stop in the supply chains. The supply chain effect is not linear. If the manufacturing crisis extends into the second quarter or beyond and warehouses are emptied, production will collapse dramatically.

The Rabobank became more specific over a week ago. According to this, there are four scenarios: The Bad; The Worse; The Ugly; And The Unthinkable. The latter, the as yet unthinkable variant, can be summarized as follows: The virus spreads worldwide and mutates. In the event of a pandemic, the world would face the scenario of a dystopian Hollywood movie. We declare: A dystopia is a narrative that presents a negative distortion of future humanity. Meaning: Zombie World.

Morgan Stanley warns of new sellout

The stock market is threatened with new adversity in the short term. In the midst of yesterday’s bloodbath of the bulls, Christopher Metli, Executive Director of Morgan Stanley’s QDS division, warned of an increased sell-off. Specifically, he said from the Quantitative and Derivative Strategies Group that yesterday there was a $10 billion selling pressure. If the S&P 500 closes below 3,235 points, liquidations of positions by “systematic and price reactive traders” could rise to $60 billion this week and “generate a self-fulfilling downward move”. What is probably meant are panic selling and the tearing of stop-losses. We are curious if this prophecy will come true: The S&P 500 closed 3.4 percent lower at 3,226 yesterday.

Only volatility is guaranteed

Our conclusion: We have long reported on warning voices that the stock market, with its ever new all-time highs, underestimates the consequences of a pandemic for the global economy. However, the question arises whether the accumulation of warnings is not gradually leading to a final panic. What would speak for short positions.

Ultimately, everything will depend on fighting the virus. If infection rates suddenly drop or an effective vaccine becomes quickly available, the shattered courses will rush back up again. The only thing that is clear is that volatility will remain with us.

We will keep an eye on the matter for you – and wish you successful trades!

Important Notes on This Publication:

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

25.02.2020 – Daily Report. The day after, the DAX first attempts the rebound. But then it turns negative. At least the US futures are working their way back up moderately. Optimists hope that the huge price gaps torn yesterday will soon be closed.

Slight decline on the Frankfurt Stock Exchange

Initially, green prices on the trading platform were flashing. On Tuesday, some courageous investors picked up again. The DAX rose to 13,132 at the start of trading, but recently the indicator was again 0.3 percent weaker at 13,000.

By the end of yesterday’s trading day, the index had fallen sharply by 4 percent to 13,035 points due to fears of the corona effect on the global economy. At this point we had advised you days ago to invest some of your capital in protective puts or short positions when trading CFDs or online shares.

Huge gaps in the charts

Yesterday the German leading index also ripped a huge gap between 13,501 and 13,247 points. It went down to 12,982 points. The situation is no different for the US indices – sooner or later long chances for courageous bulls lurk here. Because such price gaps are usually closed. The only question is when.

Dow rushes down over 1,000 points

In the USA the serial records of the past weeks are history. The Dow Jones Industrial closed 3.6 percent lower at 27,961 points – its lowest level since mid-December. So one day easily wiped out all annual profits.

The S&P 500 lost 3.4 percent to 3,226 yesterday and the Nasdaq 100 tumbled 3.9 percent to 9,080 yesterday. Dow and S&P posted their largest daily percentage losses in two years. The Nasdaq suffered its worst setback since the end of 2018. Many investors are now hoping for the Federal Reserve. For example, the broker Gorilla Trades reported on the blog “Valuewalk” and bond traders now expect two or even three interest rate cuts.

Asia hopes for the cash injection

It is no different in China: Brokers in the People’s Republic hope for intervention by the central bank. The CSI-300, for example, closed only 0.2 percent down on Tuesday morning at 4,124 points. The Nikkei caught up on yesterday’s sell-off after the holiday and closed 3.3 percent lower at 22,605.

Big address makes cash register at Gold

Interestingly enough, gold, the crisis currency, also received a slight damper yesterday. Most recently, however, the troy ounce again cost 0.3 percent more at $ 1,655. ZeroHedge pointed out that at around 11.30am East Coast time, a small sell-off on the futures began. In total, a good $3 billion was thrown onto the market. The blog blamed the Bank for International Settlements in Basel, posting the picture and contact details of the manager responsible for gold trading.

Hoping for relaxation in the matter of Corona

But was that all with the correction on the stock markets? Everything currently depends on Corona. The spread in Japan and especially in Italy is causing investors to look to the future with concern. In Italy, the first shops have been emptied out, the question is whether fear will soon be rampant in Germany as well. On Tuesday afternoon, Health Minister Jens Spahn (CDU) will meet with his counterparts in Rome to discuss how Covid-19 should be contained. The meeting will be attended by ministers from Italy, Austria, Slovenia, Switzerland, Croatia, France and EU Health Commissioner Stella Kyriakides.

What the day brings

Otherwise, there are only a few price-shifting dates on Tuesday. As always, you will find the overview here: Market Mover
First of all, US consumer confidence in February starts at 16.00.

At 22:30 the weekly crude oil inventory data from the private American Petroleum Institute (API) 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.

It’s very likely that it is. Monday was the worst day since the beginning of the year for the American stock market. Investors are beginning to panic as coronavirus spreads so much around the world. Just like “infected”, the S&P500 and Dow Jones Industrial indices have been losing more than 3% almost since the opening of the trading session. Uncertainty due to the decline in production in China, a sharp rise in the price of gold is forcing investors to flee risk instruments even more actively. We will probably see an even bigger correction on the platforms, as the trading week has just started.

Chart of the day DOW Jones Industrial

Indices

Monday was the worst day for European markets in three years. Indices are falling rapidly on new coronavirus distribution data in Europe, in particular in Italy. Fear of a pandemic may have a strong impact on the tourism business, as well as on sales of luxury goods.

Euro, Pound, Yen

But on the currency market today, there is a relative lull. Due to the lack of important economic news, major currencies are traded in a small range. On Monday, the Euro is strengthening by 0.14% to 1.0864, the pound is almost

standing still and trades at 1.2923 against the U.S. dollar, more surprising is the Japanese Yen, which has always been the currency of refuge. In recent days, it starts trading like a real risky asset. It rose to 112 at the end of last week and rebounded to 110 on Monday. The weakness of the American dollar in recent days is letting us know. The trend of strengthening the Japanese Yen will continue.

Gold

Gold is back on the horse. Investors of all suits have carried their money to buy gold and to hedge possible risks associated with the virus. Gold is once again hitting seven-year highs and is targeting $1700 per ounce. This week, traders will try to get information from various statistical reports, which will be published both in the U.S. and Europe. Weak reporting and slowdown in the economy will only spur further gold purchases.

Bitcoin

The cryptofans had been waiting a long time for bitcoin for $10000. And so the psychological level was taken, but not for long. Already very quickly bitcoins were brought down to the level of 9600 in a short time. Cryptoinvestors are perplexed by the current situation in other world markets, so there are no strong fluctuations in cryptos. This may be another calm before the storm and as soon as possible, the bitcoin will go to new levels above $10000.

What’s waiting for us today?

08.00 GDP in Germany.

15.45 Speech by FOMC member Kaplan

16.00 US Consumer Confidence Index.

Wichtige Hinweise:

Der Inhalt dieser Publikation dient ausschließlich allgemeinen Informationszwecken. Es handelt sich in diesem Kontext weder um eine individuelle Anlageempfehlung oder -beratung, noch um ein Angebot zum Erwerb oder der Veräußerung von Wertpapieren oder anderen Finanzprodukten. Der betreffende Inhalt sowie sämtliche enthaltenen Informationen ersetzen in keiner Weise eine individuelle anleger- bzw. anlagegerechte Beratung. Jegliche Darstellungen oder Angaben zu gegenwertigen oder vergangenen Wertentwicklungen der betreffenden Basiswerte erlauben keine verlässliche Prognose oder Indikation für die Zukunft. Sämtliche aufgeführte Informationen und Daten dieser Publikation basieren auf zuverlässigen Quellen. Die Bernstein Bank übernimmt jedoch keine Gewähr bezüglich der Aktualität, Korrektheit und Vollständigkeit der in dieser Veröffentlichung aufgeführten Informationen und Daten. An den Finanzmärkten gehandelte Wertpapiere unterliegen Kursschwankungen. Ein Contract for Difference (CFD) stellt darüber hinaus ein Finanzinstrument mit Hebelwirkung dar. Der CFD-Handel beinhaltet vor diesem Hintergrund ein hohes Risiko bis zum Totalverlust und ist damit unter Umständen nicht für jeden Anleger geeignet. Stellen Sie deshalb sicher, dass Sie alle korrelierenden Risiken vollständig verstanden haben. Lassen Sie sich gegebenenfalls von unabhängiger Seite beraten.

24.02.2020 – Daily Report. Heavy losses on the Frankfurt stock market: The German leading index loses around 500 points. Fear of corona spreading in Europe and Asia keeps global trade under control. The US futures are submerging. Gold climbs to a new record high. Bunds are also in demand.

Severe losses in Italy

Here we go: Covid-19 is at the door. The plague has now reached the financial centre of Milan. In northern Italy, almost a dozen towns have been sealed off, Venice has shortened the carnival. FTSEMIB Italy slipped by over 4 percent. In times of open borders, it is therefore only a question of time before it spreads in Germany.p>

Frankfurt Stock Exchange crashes

Ergo, the DAX fell like a stone on Monday. The low so far is 13,050, and the index recently recorded a minimal recovery to 13,102 digits, which represents a minus of 3.5 percent. Meanwhile, the last little hope for the bulls died: The DAX broke through the 50-day line at 13,401 points without any resistance. Such moving averages normally act as stable support. The next stop could thus be the 200-day line at 12,626 points. Let’s wait and see if there is a rebound.

Investors on the German stock exchange ignored the surprising rise in the Ifo Business Climate Index, which rose minimally from 96.0 to 96.1 points. Instead, shareholders looked spellbound at US futures, which fell by around 2.5 percent.

Safe haven escape

As always in a budding panic, investors fled into US government bonds. The yield on ten-year Treasuries slipped to a three-and-a-half-year low of 1.402 percent. At minus 0.475 percent, the yield on German ten-year Treasuries was as low as it had been four months ago. The Euro-Bund-Future increased by 0.2 percent to 175.34 points.

New record high for gold

Gold rose in dollar terms by 2.1 per cent to a seven-year high of 1,678.58 – the biggest daily gain in seven months. Calculated in euros, the troy ounce at 1,548.36 was more expensive than ever before.

It’s the end of the world as we know it

We do not want to deprive you of an interesting – though not entirely surprising – opportunity to speak about gold: The blog Goldmoney.com suspects that the world could return to the gold standard because of Corona. The plague is possibly the trigger for the rapid decline of financial stocks, Keynesian mythology and paper currencies. This would be accompanied by political instability and unrest.

Oil and Aussie on sale

Back to the present. For fear of a total collapse of the Chinese economy, the Australian dollar slipped sharply. It has meanwhile lost 0.7 percent to 0.6581 US dollars – making it as cheap as it was eleven

years ago. Investors also had to accept a slump in the price of oil: WTI most recently cost 51.72 dollars, Brent 56.07 dollars per barrel – that was a drop of a good 3 percent in each case.

Losses on the stock exchanges in Asia

The Chinese CSI-300 lost only a moderate 0.4 percent to 4,133 points in the morning. But the Hang Seng in Hong Kong finally dropped 1.8 percent to 26,821 points. The Kospi in South Korea lost 3.9 percent to 2,079 due to the rapid spread of corona. No action was taken in Tokyo because of the holiday in honour of the emperor.

Loss on Wall Street

The US stock markets had already indicated the way south on Friday. The Dow Jones Industrial lost 0.8 percent to 28,992 points. The weekly balance was thus minus 1.4 percent. Incidentally, the Dow had almost touched the 50-day line on Friday, before moving back up again. The S&P 500 lost 1.1 percent to 3,338 digits on Friday. And the Nasdaq 100 was down 1.9 percent to 9,447.

Is the bubble going to burst?

By the way, the blog “Valuewalk” published a statement by the broker Crescat Capital on Saturday, in line with the current crash. He argued that the largest speculative bubble of all time had recently built up – and the most overvalued stock market in history. At the same time, he said, there is the biggest debt bubble ever in China – and it has just begun to implode. This is globally contagious. For these reasons, precious metals offer an incredible opportunity.

This is what the day brings

In view of the corona fears, current economic data are likely to take a back seat.

For example, the CFNA index for January will be reported at 14:30.

And at 16.30 the Dallas Fed will report its manufacturing data for February.

As always, you can find the overview here:Market Mover

The Bernstein Bank wishes strong nerves and 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.

Diverse information on the coronavirus keeps the world’s major trading platforms busy. There are fears that the spread of the virus in China and beyond will have a much greater negative impact on the world economy and the financial results of some companies than expected.

Chart of the day EUR/USD

Indices

On Friday, most of the trading floors closed in the negative. The S&P500 lost just over 1%, Dow Jones 0.8%, and DAX 0.62%. Fear in the markets is increasing. There is no cure for coronavirus, and the uncertainty about the epidemic threatens the entire world economy. Although the US economy showed slight signs of an easy recovery in early 2020, preliminary estimates for March indicate that the recovery is fading again. There are no signs that the risk of a recession is diminishing.

Euro

Last week the Euro showed the lowest values in the last three years. As we expected, the strong oversold Euro together with the weak US business index data gave its results. Large purchases on Friday returned the Euro above 1.08 and a good report on European PMI kept bullish sentiment.

Probably, at the beginning of the new trading week, the Euro will continue to grow, and we will be able to see how the markets are adjusted for the future.

Gold

Gold continues to hit past highs and does so with great confidence. In just one Friday, the price of the precious metal increased by almost 2%, indicating a fairly strong shift of investors from risk assets to safe haven assets. Until the level of danger of coronavirus spreading in the world, which has a direct impact on all spheres of the world economy, the trend will continue. The target of $2,000 per ounce is no longer seen as some kind of clouds.

Oil

After a week of growth, the initiative went back to the sellers. As the oil price is denominated in U.S. dollars, a bullish rally in the U.S. currency a priori has a negative impact on demand. The sellers were on the side of the data on changes in oil reserves in the USA. At the last OPEC meeting it was not possible to reduce oil production to balance losses from the coronavirus influence. The next meeting will be held in early March, where it is possible to take a decision on production reduction.

What’s waiting for us today?

10.00 IFO Business Climate Index in Germany.

10.00 Index of business expectations in Germany.

14.30 Wholesale volume 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.

21.02.2020 – Daily Report. What was that? Wall Street had gone to ground drastically in a matter of minutes yesterday. And it had taken the DAX down with it. The index closed the day low. The usual suspects – China and Corona – don’t have much of an explanation. Brokers have a hunch – and the DAX dares to stabilize on Friday.

The DAX catches up

The leading German index proved robust on Friday afternoon: initially the DAX fell back to 13,576 points. However, in the end, it remained only 0.1 percent down at 13,658 points. This was despite the fact that US futures were down a good 0.4 percent. Meanwhile, gold was in demand: the precious metal rose 0.8 percent to 1,635 dollars; it just reached a new record high of just under 1,516 euros.

Ever new corona warnings

In addition to a wave of infection in Chinese prisons, South Korea is now also causing new scepticism about Covid-19, and in fact more and more companies and institutions are warning of the consequences. Maersk, for example, the world’s largest container shipping company, sent out a profit warning about China. The paralyzed Chinese factories would harm the world economy. Goldman Sachs warned that the stock market underestimated the impact of the virus. Morgan Stanley could imagine a factor crash and JPMorgan whispered, “this bubble will collapse.” But Corona alone is not up to the task of yesterday’s surprising setback – it can hardly be that many brokers are all at once turning new worries into trades.

Strange timing of the mini-crash

Some stock exchange traders in the USA referred to the conspicuous timing of yesterday’s small flash-crash: exactly at the close of trading in Europe, prices plummeted before bargain hunters on Wall Street picked up again. Above all, stocks that had recently boomed were sold – stock market stars such as Tesla, Virgin Galactic, Plug Power, Facebook, Apple and Alphabet.

There was immediate speculation that a large European fund or an EU bank urgently needed fresh money. Is there a threat of a major institutional failure on the old continent? We strongly advise: Keep direct market access open and keep an eye on regular market updates. If it goes bang, you also need a powerful broker with a Bafin license.

Reset in the USA

The Dow Jones Industrial closed 0.4 percent lower at 29,220 points on Thursday. Meanwhile, the Dow dropped below 29,000 and the S&P 500 also dropped 0.4 percent to 3,373. And the Nasdaq 100 lost 0.9 percent to 9,627 positions. Strong US economic data receded into the background – the Philly Fed Index was convincing.

Asian stock markets without a clear trend

On Friday, Asian stock markets did not show a clear trend. In the Middle Kingdom, the CSI-300 closed the morning 0.1 percent higher at 4,150 points. In Tokyo, the Nikkei index closed 0.4 percent lighter at 23,386 points.

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, the US PMI Manufacturing and Services is scheduled for February at 3:45pm.

And at 4:00pm the figures for second-hand real estate sales will follow.

The Bernstein-Bank wishes successful trades and a relaxing weekend!

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 nerves of investors are getting more and more heated. Markets are growing, and fear is spreading over them. The number of S&P 500 short orders has fallen to its lowest level since 2007. That is, on the one hand, everyone is tired of playing against the trend. On the other hand, everyone understands that at any moment they will have to flee the stock market.

Chart of the day S&P500

Indices

Above is the 15-minute chart on the S&P500 future. It perfectly shows the gravity of the situation. The American trading session has opened, the price has hardly moved for half an hour, followed by 3 red candlesticks. In 45 minutes the market fell more than in the previous 7 trading days. What if the fall had continued for another 45 minutes? The situation is getting more serious.

Euro

The European currency refuses to decline further against the dollar. And the Japanese yen and the pound are even growing significantly against the dollar. This is a strong signal that the EUR has been very strongly oversold in the last couple of weeks. If it bounces back against the dollar on Friday, then a very strong takeout of the short traders might happen before the weekend.

Gold

The price of gold reached $ 1623 per troy ounce, then fell slightly by the close of trading. The market came out of the sideways, where it had been for several months and started a new powerful trend. The first target will be the historic high, which was shown at the beginning of the last decade. And the second, more than anyone expected, is a $2,000 level.

Oil

Judging by the technical analysis, a short-term oil peak has been formed yesterday. After the morning growth, the price fell to the level of trading beginning. The trend is exhaled. It can only be supported by increasing tension between Turkey and Syria.

What’s waiting for us today?

08.30 Industrial production level in Switzerland for Q4 2019

11.00 Consumer price index in EU for January

14.30 Canadian retail sales for December

16.00 US secondary housing market sales in January

Wichtige Hinweise:

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20.02.2020 – Daily Report. Slight setback on the German stock exchange. Despite positive news in times of Corona: the flood of money is still with investors – both in the USA and China. A perfect environment for stocks. And also for precious metals. An investor with a price target of $ 10,000 an ounce has just spoken.

Brokers in Frankfurt wait and see

Hardly any movement on the trading platform: The DAX has fallen back slightly. In the morning, the price indicator was down 0.3 percent to 13,751 points. The US futures also crumbled moderately at 0.1 percent. Investors initially concentrated on contradictory information from China.

Gains on the Asian stock exchanges

Initially, a renewed change in the way the corona was counted caused eyebrows to be raised. Accordingly, there were doubts about the number of new infections in China. In addition, South Korea reported a significant increase in Covid-19, although the Nikkei in Tokyo climbed 0.3 percent to 23,479 points – the weak yen supported export values. For a completely different reason, the CSI-300 red chip index in China rose strongly – it recorded a plus of 2.3 percent to 4,147 points.

China’s central bank lowers interest rates

Beijing is supporting the domestic economy hit by the epidemic with a further cut in interest rates. For example, the central bank reduced the one-year reference interest rate Loan Prime Rate (LPR) from 4.15 to 4.05 percent. The five-year interest rate was reduced from 4.8 to 4.75 percent. The People’s Bank of China had just lowered the interest rate for medium-term loans (MLP) by ten basis points to 3.15 percent.

Federal Reserve supports the market

Cheap money also remains for investors in the USA. So the Federal Reserve will stick to its monetary policy. The members of the Monetary Policy Committee (FOMC) have specifically expressed their support for maintaining the current monetary policy stance for “a certain period of time”, according to the minutes of the interest rate meeting of 28th and 29th January published last night. At the same time, the Money Lords referred to global developments such as the corona virus – the Fed is therefore ready to intervene if necessary. In addition, the Fed expects US economic growth to continue at a moderate pace.

New records again in the USA

As a result, US equities continued to rise yesterday. Both the high-tech indices on the Nasdaq and the S&P 500 climbed to all-time highs. The market-wide S&P 500 gained 0.5 percent to 3,386 positions. And the Nasdaq Composite rose 0.9 percent to 9,817 points. The Dow Jones Industrial closed 0.4 percent higher at 29,348 points.

Super bull sees gold at $10,000

Interestingly enough, the flood of money from the central banks is currently mainly washing up stocks. However, gold is still playing hard to get. This could change, as the grandiose blog “Valuewalk” noted. According to this, investor Daniel Oliver of Myrmikan Capital believes a gold price of 10,000 dollars per troy ounce is possible. Although the investor did not name a specific date, he said that the time will come in the next or the next but one financial crisis. The Fed has already printed all the paper money that could heave the precious metal onto this mark.

Oliver referred to the seventies: Since then, gold reserves in the USA have remained relatively constant. At the same time, he said, the Fed had begun to buy enormous quantities of government bonds. During the financial crisis of 2008, the Fed issued new dollars in order to buy treasuries and bonds backed by real estate to save the market. In the next panic, it would not be enough to rescue banks, but then interest rates would also have to be cut sharply. We are curious.

What the day brings

At 2:30pm the Philly Fed Index for February is due in the USA.

And at 4:00pm the consumer confidence will follow. As always, you can find the overview here: Market Mover

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.