News

Did anyone have any doubts? With all major currencies: the euro, pound, Japanese yen, Swiss franc and even CAD and AUD, USD has positive swap. The US economy is on the rise. And then there is the growth of geo-tension in the Middle East.

EUR/USD chart of the day

As you can see on the chart, the price has hit the 200-day moving average again, but it is already downwards from above. Nevertheless, the tilt of the SMA 200 itself continues to be directed downwards. Last year investors, especially those working with leverages, made very good money on this pair with almost no risk. So far there is no reason to believe that the situation will change this year.

OIL

All within our projections from the last 2 mailings. Iran’s threats have not yet been followed. It means that black gold continues to sink smoothly, starting to gather the feet of the bulls, who rashly entered the position after Monday’s gap.

BITCOIN

The first crypto has pleasantly surprised investors. It has already grown by 10% since the beginning of the year. Recipients of our newsletter remember that a few days ago we discussed in detail what is going on with Bitcoin and its prospects for the new year. If anyone missed it, we advise you to pick it up from the mail and read it carefully.

INDICES

On Tuesday, stock markets around the world finally took a break. Volatility has dropped to its lowest level this year. Investors need time to figure out what to do next. Usually in January, large funds begin to form or balance their portfolios, doing so in a quiet environment after the holidays.
This year there is fear hanging over the markets. On the one hand, everyone is waiting for the beginning of the crisis (they have been waiting for 11 years) and talking about it. On the other hand, the situation in the Middle East is really unpredictable. Any major terrorist attack can send stock indices to the corkscrew.
One thing is certain. The volatility will be higher than it was a year ago. And that’s good! Traders make money on volatility and trends. And this year will be very interesting!

What awaits us today?

11.00 EU Business Climate Index for December.
14.00 Address by ECB Vice President De Gindos
14.15 ADP US Employment Level Report for December
16.00 Address by Lel Brainard, member of the US Federal Open Market Committee

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.

07.01.2020 – Daily Report. The tension on the financial market is rising – the stock exchange in Frankfurt initially picked up again on Tuesday. The coming days are likely to be volatile, as they bring a lot of fuel for traders. For example a possible escalation in the matter of Iran. Plus the signing of the customs deal between the USA and China announced for mid-January.

Profits in Frankfurt

The German leading index was up 0.8 percent at midday, at 13,238 points. On the trading floor, hopes of a de-escalation between the USA and Iran now predominated again. Yesterday, the DAX had plummeted to 12,984 points, but then returned to the 50-day line. Chart analysis teaches that such moving averages develop a magical attraction. Gold dropped 0.1 percent from its seven-year high, and most recently cost $1,565. Oil crumbled by 0.3 percent: WTI changed hands for 63.07 dollars, and a barrel of Brent cost 68.65 dollars.

Asia in the black

The Tokyo Nikkei Index closed 1.6 per cent higher at 23,575 points, almost making up for all the losses it suffered on Monday. The Chinese CSI-300 rose 0.8 percent to 4,160 digits in the morning. Meanwhile, Chinese Vice Minister of Agriculture Han Jun raised eyebrows. He told Portal Caixin that the import quotas for wheat, corn and rice would not be raised. Well, didn’t Beijing want to increase the import of American agricultural products considerably? We may know more by January 15th. Any statement on the customs deal in the coming days has the potential to move prices.

New York optimistic again

The Dow Jones Industrial ended trading yesterday with a slight gain of 0.2 percent at 28,703 points – just below its daily high. The S&P 500 rose by 0.4 percent to 3,246 digits. The Nasdaq 100 even rose by 0.6 percent to 8,849 points. The major indices had set new records as recently as Friday. It remains to be noted that the House of Representatives has still not passed on the two impeachment articles to the Senate – meaning that the House has not impeached Trump de jure. The risks of deposing Trump are melting away.

Si vis pacem, para bellum

A very readable answer to the question of why the financial market has remained so calm so far in the face of a possible escalation between the USA and Iran was provided by Michael Every from Rabobank. He said that the market was wrong in assuming that the world’s central banks would be able to absorb an external shock such as Iranian attacks in the Persian Gulf. However, they are correct in their assessment that US President Donald Trump has turned the geopolitical game in his favour. The USA had signalled that it no longer had only two alternatives: Sanctions or a conventional war; Washington no longer needs to mobilize a hesitant international community.
For the USA had countered the conflict, which had been asymmetrically led by Iran up to now, with the elimination of the Iranian leadership plus possible attacks on important institutions. Tehran would either have to escalate or accept that America possesses the larger arsenals – which would mean an enormous loss of face for the mullahs in view of the recent riots with hundreds of demonstrators murdered in the country. Otherwise, the risks have been reduced with the elimination of General Quassem Suleimani. Every went on to say that the doctrine of deterrence is valid: “If you want peace, prepare for war – si vis pacem, para bellum. And the moral of the story for traders: “In short, if World War Three kicks off, go long USD as you head for the shelters; and if US muscle-flexing prevents World War Three here, it’s even more the time to remember why the USD is still the USD.”

The black swan circles

Needless to say, the world’s stock markets are likely to be shaken up if the USA does attack Iran – for example, to prevent the construction of an atomic bomb after the mullahs’ announcement of unchecked uranium enrichment. Especially if there is a large-scale offensive with the allies Great Britain, Israel, Saudi Arabia and the United Arab Emirates. The conflagration could spread to Lebanon and Syria. The price of oil would move sharply north, as the Persian Gulf supplies about a quarter of the world’s oil. Gold should also take off. The stock market indices would be a short investment. So you should keep direct market access open and regular market updates in mind.

What the day brings

The calendar of events on Tuesday brings some interesting events, you can find the overview as always here: Market Mover
First of all, the US trade balance for November is due to arrive at 2:30pm.
At 4:00pm the ISM Services Index for December follows and at the same time the US industrial order intake for November.

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.

Late on Sunday evening, Iran announced that it was withdrawing from the nuclear deal with the IAEA. And will enrich uranium as it sees fit. This news was in addition to the attacks on the Americans in Kenya and the launch of missiles that exploded near the U.S. Embassy in Iraq.
Oil markets opened at night in fear, there was a gap, then a couple more hours of growth when the Brent price for the first time since May exceeded $ 70 per barrel. And then exactly what we predicted in yesterday’s newsletter happened. Below is the hourly chart for WTI oil.

WTI chart of the day

At peaks, oil producers sold a huge number of futures contracts. Sold to whom? Speculators who entered the market at night, hoping for continued growth. And the price went down. By evening the gap was already closed, and no new negative appeared in the market. Bulls need to be very careful not to repeat the situation completely similar to that which occurred after the attack of terrorists in Saudi Arabia.

GOLD

Gold feels great. On the one hand, states printed a huge amount of money last year, on the other hand, the growing geopolitical tension is forcing investors to buy protective assets. At the highs of the day the price of gold metal rose to 1585$, then there was a slight pullback on the background of profit taking.

Indices

On Monday, German actions were interesting. In the morning the DAX 30 index fell sharply, then a strong growth began, which led to a full recovery of lost positions. And the American stock market doesn’t care. Unlike in Europe, the futures on the S&P 500 declined only a little this morning and then rose strongly, closing even above Friday’s close. .

What awaits us today?

08.30 Swiss consumer price index for December
11.00 EU Consumer Price Index for December
16.00 December ISM Business Activity Index for US Services

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.

No one expects surprises during the New Year holidays. This year, however, there was a 9-point surprise on a 10-point scale. We are talking, of course, about the murder of General Soleimani of Iran in Iraq. What he was doing in Iraq is of little interest anymore. The fact remains that the world is faced with a sharp increase in geopolitical tensions.

Chart of the Day – WTI

Naturally, oil quotations reacted the strongest. The Brent brand grew stronger, WTI slightly smaller.
What is crucial to pay attention to traders? Remember the attacks on Saudi Arabia’s oil infrastructure. There was a powerful up-gap, it’s on the chart. Then the price went down, killing a huge number of bullish trades.
Now the situation could happen again. If there is no new news in the coming days, such as an attack on the Americans, the oil producers will sell a huge number of futures (they are still doing it now), recording future shipments of physical oil.

GOLD

The gold market was in a narrow corridor for 2 months. As we noted, the narrower the range, the more powerful will be the exit from it. That’s exactly what happened on Friday. As the tension rose, the gold metal just shot up. So far, there’s no reason to wait for the reverse to happen.

Indices

Stock indices all over the world have collapsed. The Americans played back some of their losses by Friday’s close. But in the Gulf countries, things are much sadder. By the way, shares of the world’s largest oil company Saudi Aramco have fallen to their lowest levels since the ICO.
Monday is very important to understand the dynamics of stock and commodity markets.

What’s waiting for us today?

08.00 Retail sales in Germany for November
10.00 Composite index of business activity in the EU manufacturing sector for December
10.30 UK Service Business Index for December
15.45 US Service Business Index for December

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.

27.12.2019 – Special Report. A toast to the new stock market year: After the brilliant performance in 2019, investors are looking forward to 2020 full of hope. We have identified the most interesting long and short opportunities for you.

3,333 as of 03.03.

The new year will initially continue to run just like the old one: Both the Federal Reserve and the European Central Bank are likely to continue their loose monetary policies in order to stimulate the economy. And that should drive the stock markets further upwards. Michael Hartnett, Chief Investment Strategist at Bank of America, has formulated this in a particularly effective way: The S&P 500 will hit 3,333 points on March 3. And the yield on the ten-year US government bond is expected to climb to 2.2 percent on February 2. For Hartnett, the arguments in favour of this are, in addition to monetary policy, the elimination of Brexit risks and the customs deal between China and the USA.
But there is a growing danger that investors are overly optimistic. Joseph Davis, Head of Investment Strategy at Vanguard, one of the largest asset managers in the world, warned of a setback, especially in a conversation with Bloomberg. The risk of a stock market correction of 10 percent or more is 50 percent, he said. Davis added that most investors are pricing in economic growth in the USA of a full 3 percent.

Impeachment – short shock if Trump goes

One of the most important political events for the financial market is likely to take place in January. It is likely that the Republican-dominated Senate will then reject the removal of US President Donald from office. RBC Capital Markets recently reported that 74% of investors expected the Senate to bury the matter, making it neutral for the Dow Jones, S&P 500 and Nasdaq. The Royal Bank of Canada further wrote: 69 percent of respondents believed that removing Trump from office would be negative for stocks. So an unexpected removal from office will make Wall Street shake. So if you’re trading CFDs or online stocks, be sure to keep an eye on the issue.

US election – problem for the stock market

The election campaign in the USA will be running at full speed from around the summer. In July, the Democrats are expected to select their candidate for president. Tax increase, open borders for all, impunity for drugs, reparations for illegal asylum seekers – these have been some of the topics in the left’s previous TV debates. Pure stock market poison. So watch out for the opinion polls in the regular market updates – if the Dems are about to win, the stock market is likely to plummet.
By how much, the “Epoch Times” tried to predict. The paper collected the statements of some star investors. For example, Ray Dalio, head of the largest hedge fund in the world – Bridgewater Associates; he expects Wall Street to lose 22 percent if Elizabeth Warren wins. Paul Tudor Jones, head of the hedge fund Tudor Investments, predicted a loss of 26 percent if Warren wins, according to the Epoch Times. And Stanley Druckenmiller, founder of Duquesne Capital, even sees a bear market of 30 to 40 percent if the senator wins. Jones added that a triumph by Trump would send the S&P 500 to 3,600 points. For Jones, a victory by Bernie Sanders would send the S&P 500 down 26 percent; Joe Biden and Pete Buttigieg would cause a bear market of 11.5 percent.

Phase 1 and phase 2 – likely versus hardly conceivable

Also at the beginning of January, investors can prepare for the signing of phase 1 in the customs dispute between China and the USA. That is precisely why another delay or even a bursting of the deal would be a short chance for the Dow, S&P 500, the Nasdaq and the DAX. If the deal does happen and the details that will hopefully be published then please investors, it should give the bulls a moderate boost. The futures on pork bellies, wheat, soya and rice will also be interesting – the US is demanding that China buy US farmers’ produce in the order of 40 to 50 billion dollars per year.
Phase 2 will be tough: Washington wants China to give up industrial espionage and stop copying products. We do not believe in such a deal in 2020 – it would endanger the Chinese business model. Especially as Beijing will probably wait for the US election campaign. All in all, we see this as a bearish factor for the US stock market. And also for the Chinese indices. According to Reuters, shortly before Christmas Chinese Prime Minister Li Keqiang warned on state television that the Chinese economy would face enormous downward pressure in the coming year. The government would react to this with monetary and fiscal policy.

Oil – discipline is what counts

If the Chinese American customs deal takes effect, oil prices should rise. Otherwise, much, if not all, of the energy market will depend on whether there is discipline in OPEC+. If so, the decided cut in production could cause the price to rise. Especially since a wave of bankruptcies is threatening the US shale drill. Or else the cartel is so disciplined that the US supporters are jumping into the breach as a laughing third party. Needless to say, a Black Swan event such as a war in the Persian Gulf is likely to send oil prices skyrocketing.

Sterling – it’s up to Boris

With the British pound, you have to keep an eye on the negotiations with the EU. Prime Minister Boris Johnson does not want any delay in lashing the Brexit details beyond 2020. The Helaba judged: If Britain’s exit from the EU is orderly and there are no distortions during the negotiations on the future relationship with the EU, there is potential for the pound to appreciate. However, the danger of a chaotic Brexit lurks. If the EU does not want to go along with London, then the United Kingdom will leave without clarification. With corresponding consequences for GBPEUR and GBPUSD.

Interest rate pressure on the Turkish lira

The Turkish lira is similarly political. President Recep Tayyip Erdogan continues to put pressure on the central bank. The key interest rate currently stands at 12 percent, demonstrating the determination of the central bankers, Erdogan told the NTV channel before Christmas. Erdogan held out the prospect of interest rates falling to single digits next year. In the summer, the key interest rate was still at 24.0 percent.
Commerzbank warned that annual inflation is likely to reach 14 percent. This means that inflation is eating up interest rates. In addition, according to the Coba analysis, Turkey’s foreign debt has risen by 22 percentage points to 62 percent of gross domestic product (GDP) since 2012. The central bank also lacked free foreign currency reserves. This is a toxic cocktail that is likely to lead to the bankruptcy of companies and banks. How is Turkey supposed to attract such foreign capital? Coba analyst Tatha Ghose expects a new inflation shock to push USDTRY above 7.15.

Bitcoin not yet fully acceptable

Europe and America could dry up the market with appropriate regulation. Just before Christmas, Lael Brainard, member of the Board of Governors of the Federal Reserve, sent out a warning to this effect, according to the blog “Cointelegraph”. At the event “Monetary Policy: The Challenges Ahead”, the monetary politician said in Frankfurt that about half of all Bitcoin transactions were related to illegal activities.
Moreover, autocratic countries such as China or Turkey are unlikely to allow an uncontrollable secondary currency to exist for much longer. And Iranian President Hassan Rouhani also called for a separate Muslim crypto currency in Malaysia shortly before Christmas, according to the AP news agency.
According to “Manager Magazin”, Emden Research added that there was a general lack of impetus for the oldest and most important cyber currency. Investors were still waiting for a listed Bitcoin fund (ETF) and clear rules from financial supervisors. What still remains is the reference to the Bitcoin halving, which is likely to occur in the week from May 18. BTC is limited to 21 million units, currently around 18 million BTC are circulating. Usually the price has risen after the halving.
We think there’s one more bullshit fact. If the world’s central banks continue to undermine the intrinsic value of their currencies by cutting interest rates, and if regulation is delayed, cryptos could become a refuge for the troubled global middle class.

Reserve currency Gold

But where else to put the savings in times of negative interest rates? Maybe to gold. The blog “The Daily Reckoning” expects a lot of “dark money” flowing into precious metals and expects a latecomer rally in the gold price. And Goldman Sachs advised investors with a long time horizon to save for retirement to go for gold in early December.
We believe: If there is a global bull market in the equity markets next year, the gold price is likely to move sideways or even down. However, if the stock markets do go down, the reserve currency should be in demand. And gold-based currencies such as the South African rand or the Australian dollar will profit accordingly from a boom in precious metals.

The Bernstein Bank wishes successful trades in the new year – we will keep you informed!

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.

We congratulate all the recipients of our newsletter on the upcoming New Year holidays. Today we abstract from the daily hustle and bustle and pay attention to what was happening in the markets during the year.
The main result of the outgoing year was the growth of all assets. Everything that could grow has grown. Stock markets, futures on comodities, gold, etc.
But the main beneficiary of the year was… who would you think? Bitcoin! The same cryptoactive that everyone had already had a chance to bury.

Chart of the Day BTC/USD

On the weekly chart above, you can see growth from the beginning to the middle of the year, and then fall. However, even after this fall, the price of the first cryptocurrency is still 120% above the beginning of the year.
Yes, for those of us who caught the price of $20,000 per 1 BTC, the current price of $7,300 seems low. However, the big players and funds look at the situation somewhat differently. They have little interest in what happened once. But it is as relevant as possible what kind of profitability the asset has shown this year.
Why? It’s as simple as that. Investors of the funds that have been invested in bitcoin since the beginning of the year have made very good profits. Investors of other funds are beginning to ask their managers questions… why didn’t you managers, since you are so smart and skillful, buy bitcoin? And did you not provide us with the same high return?
These are the questions that will make large funds very nervous in the coming year. After all, if Bitcoin grows significantly for the second year in a row (all the prerequisites for this have been created), then managers who once again ignored the first cryptocurrency may lose investors’ money.
Therefore, we conclude that the coming year will not only be interesting for Bitcoin, but also the year of a new information hype.

GOLD

Despite the huge positive impact on the stock markets, gold has made a sharp jump up in the last days of December, rising again above the level of 1500 dollars. This is a powerful signal that gives us smart money with a scope for the next year as part of the ongoing easing of monetary policy around the world.

Indices

The American stock market has been growing for 10 consecutive years. This is extremely atypical by historical standards. We understand that this year’s growth was only possible due to one reason – the Fed’s lower interest rate. There are no objective reasons why the markets should grow also in 2020. But we all know that these same markets can be irrational for a very long time, so we remember that the trend is our friend and are not trying to play against it.

What’s waiting for us today?

00.30 Tokyo Japan Consumer Price Index December
10.00 Index of economic expectations of ZEW Switzerland December
17.00 U.S. weekly change in oil and petroleum product 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.

23.12.2019 – Daily Report. Shortly before the festive days, Wall Street gave the bulls new records. The DAX in Frankfurt continues to lag behind. No wonder, most stock exchange traders have already left for their Christmas holidays. After all, the MDAX is climbing to an all-time high.

MDAX at the peak – lethargy in the DAX

Christmas lethargy in the German benchmark index – the free real-time prices on the trading platform hardly moved at all. Most players have closed their books for this year. On Monday morning, the DAX was down 0.1 percent to 13,303 points, still well below its all-time high of 13,596. The music was playing with the midcaps: the MDAX climbed to a new record of 28,558 points and recently gained 0.5 percent to 28,552 points. The futures on Dow Jones and S&P 500 signalled a continuation of the high-altitude rush with a small plus of 0.2 percent.

New hope because of phase 1

Investors in global trading registered with interest new signals of relaxation from China: Beijing announced on Monday the reduction of import duties on 850 products worth 389 billion dollars. As of January 1, this will make frozen pork, high-tech components and medicines cheaper, for example. In addition, private investors will have better access to the markets for oil, telecommunications and energy production. All this supported the hope that the Middle Kingdom would open up its economy further – and that the customs agreement with the USA would be filled with life.
And this matched the optimism spread by US President Donald Trump: he had a very good discussion with President Xi Jinping about Phase 1. China had begun to purchase US agricultural goods on a large scale; in addition, preparations for the formal signing of the customs deal were underway. Trump continued to tweet that both sides would sign the agreement shortly. We are excited.

Neck blow in China

Nevertheless, prices in China plummeted. The Shanghai Composite slipped 1.4 percent to 2,963 points. And the Red Chips in the CSI-300 slipped 1.3 percent to 3,967 points. The reason for the slide was the announcement by a Chinese state-linked investment fund to reduce its holdings in a number of technology companies.

New records in New York

In the face of enormous cash inflows, Wall Street continued its record hunt on Friday. The Dow Jones Index rose by 0.3 percent to 28,455 points. On a weekly basis, it made a profit of about 1 percent. Since the beginning of the year, the leading index has so far marked a plus of 22 percent. The S&P 500 also set a new record on Friday, closing 0.5 percent higher at 3,221 points. To date, the balance has been a solid 28.6 percent. The Nasdaq Composite rose 0.4 percent to a record of 8,925 positions. Its annual balance sheet now stands at an enormous 34.5 percent. All major indices have torn small upward gaps.
According to Bank of America analysts, 16.6 billion dollars flowed into US stocks last week alone – the largest inflow in 13 weeks. We are experiencing the usual window dressing: fund managers are buying the winning stocks this year so that they can tell their clients that they had a very good nose and were part of the bull market.

Declaration of war on Ankara

One more look at USDTRY – the greenback held steady at 5.9353 lira. This means that the Turkish currency continued to weaken. Demands from the US Senate for sanctions against Turkey unsettled investors. In addition, the US has formulated additional rules in the new law for the military budget, which among other things prohibit the sale of F-35 fighter jets to the NATO partner. Trump had signed the paper in the night to Saturday.

This is what the day brings

The calendar is of course rather clear, all events can be found here:
Market Mover
The Chicago Fed National Activity Index (CFNAI) for November is due at 2:30pm.
At 3:45pm the European Central Bank reports changes in the Eurosystem central banks’ holdings of government bonds, covered bonds, corporate bonds and ABS.
And at 4:00pm the US new construction sales in November follow.
The Bernstein-Bank wishes successful trades – and now also to the last remaining traders a Merry Christmas and a relaxing holiday!

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.

Closing the week on Friday continued the weekly trend. We didn’t see or learn anything new. The UK Parliament was expected to vote for Brexit, and the stock markets, equally expected, made new highs.

Chart of the Day S&P 500

Oil

The only thing that broke out of the general trend is a sharp increase in the number of active drilling rigs in the U.S. a week before December 20.
According to the statistics published by Baker Hughes today:
• the number of oil units increased by 18 to 685..;
• the number of gas installations has been reduced by 4 to 125..;
• The total number of installations increased by 14 to 813.
This is the highest increase in the last 21 months. While the number of rigs in operation in the U.S. has declined by about 22% since the beginning of the year. And that’s a sharp negative signal for oil bulls.

Euro

Failing to consolidate above the 200 Daily Moving Average, the euro is expected to continue falling, moving below 1.11. However, one should be extremely careful. The last shortened week of the year will be low liquidity. Most traders are leaving the trading floors in anticipation of Christmas. Therefore, any strong price spike in both directions is possible.

Indices

The only question that remains unclear is whether the American stock market will close next Friday at the highs of the month, year and history. Or someone will get nervous and start massive profit taking after 10 years of consecutive growth.

What’s waiting for us today?

05.30 Business Activity Index in all sectors of Japan for October
14.30 US Durable Goods Orders for November
14.30 Gross domestic product in Canada for October
16.00 New home sales in the United States in November

Important Notes on This Publication:

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

20.12.2019 – Daily Report. Records, records, records – Wall Street is preparing the bulls a nice gift just before Christmas. The DAX also rises on Friday afternoon. Shortly before the festival, the range of topics for traders was once again pleasingly diverse.

Slight plus in Frankfurt

By midday on Friday, the DAX was up 0.7 percent at 13,300. Most recently, the German leading index had again moved closer to the 50-day line, which runs at 13,056 points. Apparently, large addresses had recently sold German equities to invest money in the US – the US stock market is hardly to be held back. But who knows, maybe the trade in Frankfurt will start another year-end rally. Otherwise, the GfK consumer climate slipped slightly by 0.1 points to 9.6 points but remained at a high level.

Asia withoWitches’ Sabbath on the stock exchange

The day should remain quite dynamic, because it runs the triple witch’s sabbath. On the futures exchanges, all four types of derivatives, i.e. options and futures, expire on indices and individual shares. Large investors often try to push the underlyings on which they hold derivatives in the right direction.

Small minus in Asia

Investors in Tokyo mostly pressed the sell button. The Nikkei lost 0.2 percent to 23,817 points. This means that the index has recorded an increase of almost one-fifth on a year-on-year basis. Just a few days ago, it had reached its highest level in 14 months. In China, the CSI-300 lost 0.3 percent to 4,017.

Record-breaking chase in New York

Investors on Wall Street lit up a price firework. Both the Dow Jones, the S&P 500 and The Nasdaq 100 are climbing to new all-time highs. Even unconvincing economic data did not stop investors from making further investments. The Dow Jones Industrial rose 0.5 percent to 28,376. The broad-based S&P 500 rose 0.5 percent to 3,205 points. And the Nasdaq 100 gained 0.7 percent to 8,641. So far, the Dow Jones has gained nearly 22 percent, while the S&P 500 has gained about 28 percent.

USMCA – Impeachment Delay

Three factors created a buying mood. On the one hand, the House of Representatives passed the USMCA trade deal, which replaces NAFTA. Furthermore, the Democrats in the USA further devalued the party’s impeachment by House Speaker Nancy Pelosy now surprisingly blocking the forwarding of the two passed articles to the Senate. Allegedly to ensure fairness – de facto, to force the Senate to a secret ballot (which Pelosy did not grant to the House). This in the hope that the Republicans will switch sides. In the weeks before, however, she had kept pace. Why push an impeachment in the first place so as not to finish it quickly?! As it stands, Pelosy wants to prevent a cleansing by the Senate. Which should not succeed. Wall Street continues to expect a pro-business President Trump. Especially since the Dems addressed the issue of ecology with affection in their sixth candidate debate.

Anticipation for Phase 1

And above all, the customs deal came back into focus. U.S. Treasury Secretary Steven Mnuchin told U.S. television station CNBC that Phase 1 with China was fixed in writing , and he expressed confidence that the deal would be signed in early January. Gao Feng, spokesman for the Chinese Ministry of Commerce, assisted him. He told reporters that both sides were now talking about the official signing of the abbot- after which the text would be published. Wall Street is waiting to clarify whether and how strongly the Chinese can be tiedup; and whether they will really buy agro-products on a large scale in the USA. Disappointment potential not excluded – if you trade CFD, you should keep an eye on pork, soy, wheat and rice.

Voltage at Cable

GBPEUR last held slightly up at 1.1732. The Bank of England yesterday left the key interest rate unchanged at 0.75 per cent. The central bank lowered its fourth-quarter growth outlook from 0.2 percent to 0.1 percent. Inflation expectations for the spring are 1.25 percent, well below the 2 percent target. However, the central bank nevertheless hinted at a moderate rate hike: “Some modest tightening of policy, at a gradual pace and to a limited extent, may be needed to maintain sustainably inflation y at the target. “

This Friday afternoon, Prime Minister Boris Johnson wants Parliament to vote on his Brexit deal. At the same time, an extension of the transitional period planned for the end of 2020 is to be ruled out. In the foreign exchange market, this could again create a bare nerve, as many fear a chaotic Brexit again.

What the day brings

Otherwise, there is a bouquet of important data.

For example, US GDP is reported at 2:30 p.m. in the third quarter. In addition, data on private consumption.

At 4 p.m., consumer confidence followed in December, private income and spending in November.

At the same time, the University of Michigan is also in the process of boosting consumer confidence for December.

As always, you will find an overview here: Market Mover
The Bernstein Bank wishes successful trades and already Merry Christmas!

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.

Two days ago we were giving a brief overview of the situation after the announcement of the vote in the UK Parliament. As predicted, the pound keeps rolling down. The latest news pack came out today.

GBP/USD chart of the day

The level of retail sales turned out to be much worse than analysts’ expectations. The most interesting question is not even why sales are falling. But why do analysts keep making such a big mistake when they see what is going on?
At the moment the pair pound/dollar fell just below 1.30.
It is very entertaining. Climbing to 1.35 and taking the stops 10-12 points higher, then dropping without any pullbacks to 1.30 and taking the next stops 10-12 points lower. The example can be recorded in trading books, in the chapter of trading on news and expectations.

What else happened on Thursday?

The euro-dollar pair shows a slight rebound. Some short-term trend is out of the question, the movement is chaotic.
On the other hand, the Swiss franc once again made us happy. Against the backdrop of falling pound sterling, investors continue to flee in the direction of Swiss assets. Apparently, future economic turmoil is expected not only by the UK, but also affects the EU countries, as the main trading partner. Big investors are trying to protect themselves in advance, before the new year.

INDICES

Meanwhile, we continue our predicted Christmas rally in the American stock market. Investors do not pay attention to any negative, even voting on the impeachment of Donald Trump! Another classic situation, worthy of a trading textbook on the topic “The trend is our friend”.

What is waiting for us today?

02.30 Decision of the National Bank of China on interest rate
10.30 UK Gross Domestic Product data 3Q.
14.30 U.S. Gross Domestic Product data 3Q.

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.