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29.11.2019 – Daily Report. Investors in the German stock market are holding out sideways. On the one hand there is no Wall Street target because of Thanksgiving. On the other hand, the stock market is worried about China’s anger over US support for the demonstrators in Hong Kong.

Prices in Frankfurt are crumbling

The DAX did not make any headway on Friday morning either: The indicator plunged to 13,168 points, but then picked up again. Most recently, the leading index was 0.2 percent weaker at 13,226 points. EURUSD also remained lethargic at 1.1009.
Investors expect only a few new impulses, as the US stock market only trades in short positions today. Only in the coming days should there be new momentum on the trading floor, because the stock market is analysing the figures for the mega shopping event Black Friday in the USA. Meanwhile, German retail sales in October were significantly lower than expected. All data can be found here:Market Mover

Always sideways

If you trade stocks online, we congratulate you on your good nerves. Since the beginning of November, the leading index has been moving sideways in a corridor between 13,000 and 13,400 points. After all, the annual high of 13,374 points was also reached during this period. However, the all-time high of 13,596 points from January 2018 is still a good way off. If you trade CFD, then of course it doesn’t care, because thanks to the leverage you still have good chances even with smaller movements.

Fear of China’s anger

Brokers referred as current stress factor to the feared backlash of the Chinese because of the signing of the laws supporting the pro-democracy movement in Hong Kong by US President Donald Trump. Possibly the trade talks between China and the USA could now derail. Perhaps such caution in global trade is wise; perhaps it is only hysterical. After all, nothing happened at all – as the brilliant Wall Street Journal (WSJ) has just analysed.
According to the WSJ, the focus of the Chinese authorities is now on the question of whether America is actually introducing sanctions. But that would probably take a good six months. Beijing had also listened with interest to the passage in Trump’s statement according to which he referred to his ancestral leadership role in foreign policy. Notwithstanding all the outrage expressed, China wants to continue a customs deal to alleviate the pressure on the weakening domestic economy. This coincided with Trump’s interest in increasing the chances of his re-election. WSJ author Lingling Wei also noted that it was not by chance that the U.S. president chose the evening before Thanksgiving to sign, because then the Americans would prepare for the big celebration and the deal would go down. Moreover, according to WSJ, the Chinese leadership has positively noted the passage in Trump’s statement in which he expressed his respect for China’s President Xi Jinping.

Theatrical thunder or backlash?

Interestingly, Geng Shuang, the angry spokesman for the Chinese foreign ministry, recently did NOT say that when a journalist asked whether the signing would have a negative impact on the trade talks – but evasively demanded that the USA not enact the laws because this could undermine bilateral relations and cooperation in important areas.
The journal also quoted Wang Yong, Professor of International Affairs at Beijing University, as saying that while the laws have worsened sentiment, they should not negatively affect trade talks. We suspect that a professor at a state university knows a few backgrounds from the Politburo. The WSJ also noted that much now depended on Washington encouraging Hong Kong demonstrators to escalate their protests. So let us wait and see.

Asia backs down

Whatever the case, investors first played it safe. The red chips in the CSI-300 fell by 0.9 percent to 3,829 points. The Hang Seng lost 2 percent to 26,346 points. Traders also suspected that investors were withdrawing money from China and especially Hong Kong at the end of the month. The Nikkei index lost 0.5 percent to 23,294 points. Investors reacted disappointed to the data on Japanese industrial production in October – it fell as rapidly as it did at the beginning of 2018. In concrete terms, output slipped by 4.2 percent compared to September, as the Ministry of Trade announced in Tokyo.

This is what the day brings

As mentioned before, the impulses from America at the end of the week are small. On Wall Street there will only be a shortened trading until 7pm. The bond market closes at 8pm.
The Chicago purchasing managers’ index for November will be published at 3:45pm.

Bernstein-Bank wishes you 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.

Donald Trump chose to ignore the requests of his Chinese partners and signed two laws supporting the rights of the protesters in Hong Kong. Such actions confuse investors; plus, all the forecasts for the signing of the first part of the trade agreement are now out of the window.

Brent day chart

Oil prices keep going down, pushed by the fear that the talks between the US and China might fall through. The hope that the OPEC countries extend production cuts in December is also waning. Some of the OPEC members stated that the discussion should be postponed till March. January Brent futures were traded at $63 per barrel on Thursday.

EUR/USD

Small trading volumes, owing to the holiday in the US, keep euro in a narrow range. The pair has consolidated near the 1.10 mark. Since the fresh German inflation data isn’t good, there is no reason for the pair to grow. Bearish mood is prevailing.

GOLD

Gold remained under pressure on Thursday, and now there is a chance it will test the monthly minimum of $1445 per ounce. The current complications in the trade talks prevent investors from finding the right direction. Meanwhile, the positive US GDP statistics didn’t have any impact on the price of gold.

INDICES

Since US markets were closed on Thursday, the day passed without major incident. European markets closed slightly in the red in preparation for the Black Friday. DAX sustained a small fall from its all-time high and closed at 13245.

What’s next?

8.00 UK: nationwide housing prices for 2019
9.55 Germany: change in the number of the unemployed
11.00 EU: consumer price index since the start of 2019
14.30 Canadian GDP

Important Notes on This Publication:

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

28.11.2019 – Special Report. Digital currencies are under pressure after the recent raids in China. There are also threats from Europe and the USA. After all, Bitcoin, Ethereum and co. are nothing more than a declaration of war by internationally networked participants against the state’s money monopoly. And therefore unacceptable for politics. The case of China is particularly impressive proof of this.

Bitcoin bloodbath

The past few weeks have demanded a lot from the Bitcoin bulls: the world’s most popular digital currency slipped to 5,936 euros on Monday. In June, the interim high was 11,340 euros. Recently a slight recovery set in, Bitcoin changed hands for around 6,800 euros.

As the blog Coin Dance stated with reference to the hash rate – the computer power that keeps the Bitcoin network running – the community by no means capitulated despite the attack in China. Exact figures are not available because cyberdevisen are flying under the regulatory radar. But China is considered the most important market in the world – the latest events in China have had a signal effect accordingly.

The empire strikes back

The blog CoinTelegraph reported last week that crypto companies operating in China have recently been exposed to increased search pressure. Last Thursday, the authorities allegedly stormed the offices of Binance and Bithumb, which both denied. The publication “Sanyan Finance” reported that 39 companies in Shenzhen had been raided. In addition, the People’s Bank of China announced on 21 November that it would now step up its action against the industry. In addition, the currency watchdogs warned investors against investing in this sector. Miners and traders have been targeted. Beijing had recently fired suspicions about the introduction of its own, state-supported crypto currencies – which is probably why the uncontrollable competitors are now to be eliminated.

Wasn’t meant that way

And yet it had looked so good for the crypto bulls precisely because of China at the end of October. Bitcoin, for example, attracted just over 10,000 dollars or 8,359 euros when China’s President Xi Jinping praised blockchain technology to the skies, according to the state television station CCTV. The People’s Republic should play a leading role in this sector. Was China back on a pro-crypto course? Hardly: As the industry blog BTC-Echo stated, Xi was more interested in blockchain technology than Bitcoin. We see it that way: Beijing wants a controllable E-Yuan, but not all the other crypto currencies.

Beijing takes things seriously

Only last summer, according to CNBC research, China tightened its exchange rate against digital currencies. As early as 2017, China had banned the sale of “initial coin offerings”. In August 2018, the authorities – including the Chinese central bank and the state financial market regulator – warned against illegal capital collections for cryptocurrencies; the Chaoyang business district in Beijing banned cryptos altogether.
At the same time, according to CNBC, local Chinese governments invested around 3.6 billion dollars in cryptos between 2016 and mid-2018. At the same time, trade with Bitcoin remained largely permitted in China. Nevertheless, many Chinese companies had moved their headquarters abroad, but continued to work in the People’s Republic. And with the brisk interest in the USA, Japan and South Korea, Bitcoin increased to 19,000 dollars and 16,376 euros respectively at the end of 2017.

Fight against capital flight

It is doubtful that such heights will be reached again. Because anyone who knows a little about China or other autocracies knows what politics is all about there: Above all, Beijing wants to stem the flight of capital. And that runs very well via Bitcoin. Many Chinese are rightly afraid of a devaluation of the yuan – which is why they are looking for alternatives that they can take out of the country. Customs can curb the smuggling of cash or coins. International bank transfers are subject to capital market controls. Digital currencies, on the other hand, are completely beyond the control of the state – because thousands of computers all over the world simply bypass supervision.
A disaster for politicians – Beijing would have liked to have invested the billions flowing out of the country at home. And also drained the corruption swamp. The situation is similar in Russia, where vast sums are transferred to London or Switzerland. As the FBI has already warned, income from criminal activities is also being processed via digital purses. Cryptos also stand in the way of state-controlled money supply control – in China, Russia, Europe or the USA the means of choice for stimulating the domestic economy.

You shall have no money gods beside me

Blockchain technology offers politicians a way out of the crypto misery. That’s what Xi Jinping said: “If you meticulously list via E-Yuan who has transferred what amount of foreign exchange, the cash drain is over. It’s no coincidence that Turkey has just announced plans for the digital lira – it would probably put an end to the consumption of the lira. The first tests are scheduled for the end of 2020, and the Turkish e-currency should be introduced by mid-2025.
The discussions in Germany about the abolition of cash are heading in the same direction, by the way. Those who have notes in their pockets will be able to pay tax-free black workers; those who invest in coins will be able to hide them from the tax authorities in Switzerland. No politician wants that. And even on the other side of the Atlantic, Facebook’s plans for Libra or Stablecoin have caused eyebrows to rise. Specifically, the Federal Reserve warned in its Financial Stability Report on 15 November that an unregulated Stablecoin would entail risks.

Price target zero for all cryptos?

Our conclusion: We can prepare ourselves for a global backlash of the regulators against Bitcoin and Co. Politicians will not allow a parallel currency to exist on the Internet for all time. Nobody knows how long the campaign against the now around 100 digital currencies will take. Especially since it is difficult to sink a decentrally organized armada of global servers. But one country after another is likely to dry up the market and introduce its own digital currency. Ultimately, this amounts to the exit of all alternative offers.

Bullish counter-movement possible at any time

Of course, the demise will be accompanied by escapees to the top. Every time a big bank threatens to topple over and investors want to save their money, Bitcoin and co. will attract. Whenever it turns out that digital regulation is not progressing because of technical hurdles, prices will rise again. Especially since investors’ longing for money that cannot be manipulated by the central banks is likely to continue in the wake of the zero interest rate policy.
In addition, a lot of old money could still flow into the new digital world. The former Goldman banker Mike Novogratz has just launched two new crypto funds, as Bloomberg reports. His Galaxy Digital Holding focuses on solvent investors with 2 to 25 million in free capital. Galaxy will specifically target those investors aged between 50 and 80 who have stayed out of this market so far. However, it is questionable whether conservative investors will invest in such a volatile asset.
Whatever the outcome, the Bernstein Bank will keep an eye on this exciting topic 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.

28.11.2019 – Daily Report. German shareholders are already familiar with this: Wall Street is attracting and setting new records. Nevertheless, the DAX is not getting off the ground. Once again, the reason lies in the China-USA conflict. Moreover, the American market remains closed on Thanksgiving – before the trading break the risk of positioning oneself on the wrong side increases.

Moderate minus in Frankfurt

Investors on the German stock exchange were cautious on Thursday morning. The DAX recently dropped by 0.4 percent to 13,234 points, further retreating from the previous year’s high of 13,374 points reached by Germany’s leading index in the previous week. The same naturally applies to the all-time high of 13,596 points in January 2018.

Threats from China

The reason for this reluctance was the Hong Kong case. US President Donald Trump has signed the bills passed almost unanimously by Congress. This bans the export of tear gas, pepper spray, rubber bullets and stun guns to the Hong Kong police. The government will, however, treat parts of the laws differently in order not to undermine the constitutional authority of the president in foreign policy issues, wrote Trump. It remained unclear which passages were actually at stake.
China reacted indignantly: The Foreign Ministry in Beijing reported that Deputy Foreign Minister Le Yucheng had appointed US Ambassador Terry Brandstad. The ministry demanded an immediate end to this policy and further damage to bilateral relations. Furthermore, a spokesman for the Foreign Office raged in Beijing, the United States supported “violent criminals who beat innocent people and set them on fire”. He spoke of “evil intentions” and a “United States conspiracy”. “We advise the United States not to act arbitrarily, otherwise China will take decisive countermeasures.

Asian stock markets skeptical

And of course there were immediate concerns that a customs deal between China and the USA might not work out after all. The Hang Seng lost 0.2 percent to 26,894 jobs. The Chinese CSI-300 slipped by 0.3 percent to 3,862 points and the Nikkei fell by 0.1 percent to 23,409 points.

Records in New York

The evening before, American investors had been betting on a settlement in the customs dispute, and records were the logical consequence. The Dow Jones climbed by 0.2 percent to 28,164 points, at times to around 28,175 points. The S&P 500 closed up 0.4 percent at 3,154 points, marking a final record. The Nasdaq 100 also marked a new final high, posting a plus of 0.7 percent to 8,445 positions. Before Thanksgiving and the shortened trading session on Friday, however, trading volumes were flat.
The second estimate of economic growth in the USA in the third quarter also provided a good mood – GDP turned out stronger than previously calculated. All data can be found here: Market Mover

Everyone in the world knows about “Black Friday”, the day when shops arrange crazy sales and buyers take a queue in the morning to buy goods with a good discount.

Now “Black Friday” is an international action and a serious driver for global retail. Since America is a consumer society, this day has a very strong impact on domestic consumer spending, which also has a positive impact on the overall state of the U.S. economy.

According to the National Retail Federation, in 2018, 165 million people shopped in stores or online during the period from Thanksgiving through Cyber Monday. Around 25% of people shopped online, 21% shopped in stores and 54% shopped both online and in stores, spending an average of $313.29 over the five-day period.

How does Black Friday affects stock markets and the economy as a whole? The retail sales data will be published at the weekend. For many investors, the sales results these days are an important signal for the decision-making and evaluation of the companies producing goods. Perhaps buying shares of large trading companies with strong fundamentals will be an interesting investment before the New Year holidays. Stock markets usually react with growth because of positive investors.

In recent years, “Black Friday” has gained popularity in almost all countries of the world. Due to the development of online trading, sales start in mid-November. The leaders among the goods are electronics, appliances, clothing and footwear.

Investors’ attention is focused, first, on how much sales on Black Friday will exceed or will be below analysts’ forecasts. This allows us to understand the real mood of American consumers, and therefore make a prediction of how retail sales will behave in the coming months.

Therefore, if the level of sales exceeds forecasts, we can expect the growth of the American stock market before the end of the year.

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.

27.11.2019 – Daily Report. Wall Street’s holding up at a record high. And this time, the stock markets in Frankfurt are following in the direction of an annual high. For in the customs dispute between China and the USA, an agreement is now definitely imminent. A familiar pattern is also being repeated for the Turkish lira. Which should worry the bulls extremely – and could be food for the bears.

The DAX gains

Germany’s leading index recently rose by 0.6 percent to 13,311 points. Meanwhile, the MDAX reached a new high of 26,632 points. Most recently, the index of mid-cap stocks held up 0.2 percent at 27,603 points. In view of the abundance of US economic data due before Thanksgiving, the development was astonishing. However, brokers did not want to find themselves in a sideways movement if the price rocket suddenly ignited.

Customs optimism again and again

Previously, US President Donald Trump had once again lifted the mood of the stock market in global trading. He noted that the United States was “in the final throes of a very important agreement.” And he continued: “The talks went very well”. Previously, the government in Beijing had declared that it had reached a consensus with the United States on relevant issues. In fact, it’s time for the Chinese, because the Economic Work Conference will take place in the second week of December – at this closed event, the leadership will set the course for the economy in the coming twelve months.

Mixed picture in Asia

Nevertheless, the Chinese CSI-300 fell by 0.4 percent to 3,876 points. The reason for this is a sharp drop in profits in Chinese industry in October: profits slipped by 9.9 percent year-on-year, after having already fallen by 5.3 percent in September, according to the National Bureau of Statistics. In Hong Kong, the Hang Seng remained up by 0.2 percent to 26,954 points. The Nikkei in Tokyo gained 0.3 per cent to 23,438 points. The day before, the index had reached a new annual high of 23,608 points.

New York wants to continue upwards

The evening before, hopes for a solution to the tariff conflict had clearly lifted the Dow Jones above the 28,000 mark – in the course of which the index had once again reached a new record high of 28,146. At the closing bell, the leading index rose by 0.2 percent to 28,122 points, the 14th record high in a short time. The S&P 500 also gained 0.2 percent to 3,141 points and the Nasdaq 100 advanced by 0.2 percent to 8,386 points.

Save yourself

And that brings us to an interesting event in the Turkish Lira. Once again President Recep Tayyip Erdogan commented on the motto. On Tuesday he called on the Turks to part with their dollars and in an act of patriotism exchange them for the domestic lira – which would no longer lose value, he assured the parliament. For some assets, a chart analysis is no longer helpful. But a look back – apart from the fact that USDTRY is forming a bullish flag. The grandiose blog ZeroHedge has kindly listed what happened at previous such prompts.

That’s what the day brings

If you trade CFDs in dollars, US stock exchanges, DAX or US Treasuries, then today will be an interesting day. The calendar is full to bursting, you can find the overview here as always: Market Mover
First the American GDP enters for Q3 at 2:30pm as a 2nd publication.
At the same time brokers are pleased about private consumption in Q3, also 2nd release.
At the same time the weekly first applications for unemployment assistance are reported.
After a small break at 4:00pm the private incomes and expenditures follow for October.
Ditto the pending house sales in the same month.
At 4:30pm the weekly oil report for WTI will be published.
And last but not least, you should analyse the Beige Book from 8:00pm onwards.

The Bernstein Bank wishes 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.

Many investors are already thinking that the Christmas rally has begun. Without any major news or strong macroeconomic inputs the markets are easily testing all-time highs. This is actually worrisome: such a euphoria could bring trouble down the road.

Dow Jones Industry day chart

The crypto market has decided to remind us how complex the industry is. The current rapid fall of BTC down to $6540 is similar to last year’s crypto winter, when chaos and global sell-offs ruled. On Tuesday, Bitcoin recovered some of its losses and is now trading at $7090, but the risk of further decreases is still high.

EUR/USD

The pair is taking a break before the US holiday season. American investors are preparing to celebrate Thanksgiving, so the price is oscillating within a very narrow range. Euro is once again close to the 1.10 balance line. Data on the US GDP will be published on Wednesday, giving the price a much-needed direction.

GOLD

The demand for gold remains weak. On Tuesday, the precious metal’s price fell to its two-week low. A positive outcome of the US-China tariff talks, as well as a strong dollar, can not only cut off the oxygen for gold but also lead to a fall very soon.

INDICES

In preparation for Thanksgiving, American investors are once again pushing S&P and Dow Jones towards the all-time highs. Global markets have reacted calmly to the news from China that the first round of the talks is almost over. The macroeconomic data to be published this week will show how strong the US economy really is – and if it can pull the rest of the world in it suit.

What’s next?

14.30 US durable goods orders
14.30 US GDP for Q3
16.00 US pending home sales
16.30 US gasoline stocks

Important Notes on This Publication:

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

26.11.2019 – Daily Report. Not again: Brokers in the USA are buying in view of the new hope in the customs dispute. But German investors are waiting. Real news is in short supply.

DAX hesitates

The stock exchange in Frankfurt has a problem with its handbrake – it is constantly on. Once again, brokers in Germany ignored the positive targets from the USA. In early Tuesday trading, the DAX fell by 0.3 percent to 13,209 points. And this despite the fact that although GfK reported an increase in its consumer climate barometer of 0.1 points to 9.7 points, this was below some forecasts. An overview of all data can be found here:
Market Mover

So there is still a sideways tendency. The back and forth is good for you, if you trade CFD – then you can trade thanks to the leverage also smallest movements in yield. The situation looks frostier if you trade stocks online. On the trading platform, the free real-time prices have hardly moved recently. The Dow future remained unchanged at 28,048 points, while gold gained 0.2 percent to 1,458 dollars.

The tailwind is fading

The day before, positive news had been circulating about the China-USA customs dispute, including speculation that Beijing would more severely punish intellectual property infringement, Bloomberg wrote. Yesterday we had reported here in detail about the other news. But on Tuesday this tailwind was missing.

The state Chinese news agency Xinhua reported a telephone conversation between both sides. Beijing and Washington had discussed their core interests and agreed to resolve the issues in question “appropriately”. CNBC became a little more concrete and translated a message from the Chinese Ministry of Commerce. China’s chief negotiator Liu He telephoned the US Trade Representative Robert Lighthizer and Finance Minister Steven Mnuchin today. Both sides had reached a consensus on how to solve problems and had agreed to stay in contact for a Phase 1 agreement.

Do or Die in the Customs Controversy

Meanwhile, Reuters, citing experts in China and the U.S., noted that the completion of the much more difficult Phase 2 is becoming less likely. Among other things, industrial spying and copyright are to be negotiated in this step. One obstacle was the US’s decision not to use other countries to exert pressure on Beijing. On the other hand, China is likely to wait and see whether US President Donald Trump wins the US presidential election in 2020.

Jeremy Siegel, professor at the prestigious US University Wharton, just explained what is at stake for the bulls in an interview with Bloomberg TV. According to him, the market expects some agreement in the next three months. If this is achieved, the S&P500 is likely to rise by 10 percent. But if this fails, or if nothing at all is achieved by the deadline of December 15th for the next customs round, a selloff of 15 to 20 percent threatens.

Mixed trend in Asia

Investors in Asia were still cautiously optimistic. The Chinese CSI-300 rose by 0.4 percent to 3,892 points. The Nikkei in Tokyo also gained 0.4 percent to 23,383 points. The Hang Seng in Hong Kong recently lost 0.1 percent to 26,952 points.

Record hunting in New York

The evening before, the US brokers had taken the initiative. The Dow Jones Industrial dropped out of trading with a plus of 0.7 percent at 28,066 points, just below its daily high. This brought the leading index closer to its recent high of around 28,090 points last Tuesday.

Meanwhile, the other major US indices climbed to new record highs. The S&P 500 gained 0.8 percent to 3,133 points. The Nasdaq 100 gained 1.2 percent to 8,371 positions. And the market-wide Nasdaq Composite also set a new final record with an increase of 1.3 percent to 8,632 points.

That’s what the day brings

On Tuesday at 14:30 it will be exciting when the US retail data arrive.

At 16:00 US consumer confidence will be released in November.

At the same time, US new building sales for October will be running on the tickers.

And at 22:30 the private American Petroleum Institute (API) reports the weekly crude oil stock data.

The Bernstein Bank wishes successful trades!

Important Notes on This Publication:

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

On Monday, investors were cheered up by the positive news on the US-China tariff negotiations. Chinese media stress that the parties have made great progress and are now very close to completing the first stage of the talks. Enthusiastic investors are once again buying risky assets of all types.

S&P500 day chart

Brent has made a serious test of the $65 support line. Buyers are unwilling to give in. The OPEC meeting on December 5 will likely provide a signal to investors. If the parties decide to extend the current production cuts, it can give an additional spur to the demand.

EUR/USD

On Monday, EUR/USD fell below its Friday’s minimum. Germany’s Ifo index value turned out to be lower than expected, indicating reduced business activity and a worsening sentiment in the region. At the same time, the positive news on the trade talks are strengthening the dollar. It’s unlikely that the pair will grow in the nearest future.

GOLD

At the start of the week, the price of gold remained stuck in a narrow channel. Investors are hesitant to exit the safe haven asset, but the current strong growth in the stock market doesn’t give bulls a chance. It’s more probable that the bearish trend will continue all the way down to $1440 per ounce.

INDICES

Almost all international exchanges demonstrated growth on Monday. The cautious optimism regarding the tariff talks is boosting investors’ appetite. The US markets are facing a strong resistance area and probably won’t be able to break through it without some major news.

What’s next?

8.00 Germany: consumer sentiment indes
14.30 US: foreign trade balance for October
16.00 US: consumer confidence index for October
16.00 US: new home sales for October

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.

25.11.2019 – Daily Report. But now the customs agreement between China and the USA should really work out soon. At least one Chinese publication reported that it is well connected with the leadership in Beijing. The DAX is rising. Meanwhile, the crypto currencies have to be put on the scaffold because of Beijing.

Profits in Frankfurt

Here we go: Germany’s leading index broke an upward gap of 85 points on Monday morning. Most recently, the stock market indicator was up 0.4 percent at 13,217 points. On Friday, the DAX entered the weekend with a moderate plus of 0.2 percent at around 13,163 points.
Last Tuesday, the DAX reached its high for the year to date at 13,374 points. On Monday morning, the Ifo index will be in the spotlight again, you can find it here: Market Mover

Above all, however, the customs dispute between China and the USA was the focus of attention. Global trade was full of praise, and US futures rose by 0.3 percent. The gold price, on the other hand, crumbled by 0.2 percent to 1,458 dollars.

Bullish signals for Phase 1

And that was what happened: The Chinese “Global Times” reported on Monday on Twitter that the USA and China were “very close” to concluding the planned first partial agreement. The paper referred to experts close to the government. The paper is published by the newspaper “People’s Daily”, which belongs to the Communist Party.
Even before that, the tone in the customs dispute had been rather conciliatory. On the one hand, Beijing stressed that it was making serious efforts to reach an agreement. Chinese state and party leader Xi Jinping had said that Beijing was working to avoid a trade war. China was also committed to reaching an initial agreement in the conflict with the USA. However, Xi stressed that his country was prepared to retaliate if necessary.
Secondly, US President Donald Trump said on Friday in an interview with Fox News that an agreement was “possibly very close”. Many brokers were relieved: since both the US and China had an incentive to settle the trade dispute, they expected a deal in the medium term. However, Trump also warned China against sending soldiers to Hong Kong.

Asia wants to go up

In China, the CSI-300 gained 0.7 percent to 3,878 positions in the morning. Not bad: This year, the increase so far amounts to almost 30 percent. The Hang Seng gained 1.5 percent to 26,993 points. Brokers also justified the good mood with the victory of the candidates of the democracy movement in the elections in Hong Kong. We wonder whether conflicts with Beijing are not inevitable. In Tokyo, the Nikkei rose by 0.8 percent to 23,293 positions.

Restrained joy in New York

Wall Street celebrated Friday’s Customs News with moderate applause. The Dow Jones Industrial, for example, closed the day with a plus of 0.4 percent at 27,856 points. Nevertheless, the Dow recorded a weekly loss of 0.5 percent. The broadly diversified S&P 500 rose by 0.2 percent to 3,110 points on Friday. The high-tech index Nasdaq 100 climbed moderately by 0.1 percent to 8,272 points.
The bulls also received support from economic data: According to the consumer climate survey conducted by the University of Michigan, the mood of US consumers had surprisingly brightened significantly in November.

Crypto bloodbath in China

In the case of crypto currencies, the slaughter festival of recent days continued. Bitcoin recently recorded a minus of 7.5 percent at 6,117 euros. In the past two weeks, the high had been 8,212 euros. Ethereum lost 9.3 percent to 123.42 euros, here the ten-day high had been 172.19 euros. The blog CoinTelegraph reported that crypto exchanges operating in China had recently been exposed to increased search pressure. On Thursday the authorities allegedly stormed the offices of Binance and Bithumb, which both companies denied. The publication “Sanyan Finance” reported that 39 companies in Shenzhen had been raided. In addition, the People’s Bank of China announced on Friday that it would now step up its action against traders. Beijing had recently fired suspicions about the introduction of its own government-backed crypto currencies – which is why its uncontrollable competitors are now to be eliminated.

So much oil everywhere

In view of the hope in the customs dispute, WTI increased by 0.3 percent to 57.94 dollars, while Brent increased the same percentage to 62.55 dollars. Meanwhile, Oilprice.com reported a signal for the bears in the oil market: For the first time since the 2008/2009 crisis, refineries in the USA have cut back their crude oil processing. Reuters has determined this by evaluating data from Energy Information Energy. The reason: demand for oil products has fallen both in the USA and overseas; there is an oversupply of gasoline, especially in Asia. According to last week’s EIA report, the occupancy rate at US refineries in the week ending 15 November was 89.5 percent – two years ago the rate had been 91.3 percent.

This is what the day brings

The appointment calendar on Monday is only sparsely filled.
The Chicago Fed National Activity Index (CFNAI) for October could be of interest at 2:30pm in the USA.
The Bernstein Bank wishes 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.