News

On Friday, Dow Jones reached the 28 000 mark. It took 90 sessions to grow by 1000 points. These figures are nothing unique, but some experts think that breaking through this level can increase the bullish mood and elicit enthusiasm among investors.

S&P500 day chart

Bitcoin is testing its enthusiasts’ optimism again. A weak downward trend has brought it very close to $8000, with a prospect of testing the MA200 at $7800 next. Altcoins mostly duplicate the movements of BTC.

EUR/USD

Friday’s movements slightly strengthened the euro. This could be just a correction, though. The US and Europe are competing for the dubious title of the region that will first go into recession. Investors need a good reason to buy USD – or euro. Hence there are no reasons for either decline or growth right now. Euro is likely to remain where it is until some major news or macroeconomic data is published.

GOLD

The price of gold is now mostly influenced by political and economic news. Last time, protests in Hong Kong and the issues in the US-China trade talks helped gold grow. At this stage, there’s too much uncertainty in the negotiations, with contradictory claims by various US officials. Still, there’s likely to be an outcome that will point gold in either one direction or the other.

INDICES

Most international markets closed 0.5% up on Friday. In the US, the markets have reached a new all-time high. This was a good week for investors. In the upcoming week, a lack of major news and statistical data will likely cause investors to close their positions, putting pressure on the markets.

What’s next?

15.30 Canada: consumer price index for October
17.30 US: crude oil reserves data
21.00 US: notes from the latest Fed session are to be published

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.

15.11.2019 – Daily Report. Positive news from the negotiations between China and the USA are pleasing investors. Wall Street is holding close to its record highs. And the DAX is lurking below its annual high with a slight gain.

Upward gap in Frankfurt

Optimism in New York has raised the Frankfurt stock market. The DAX started Friday with a jump to 13,257 points. Then it fell slightly and gained 0.4 percent at 13,236 points. Volatility is likely to continue on the small expiration date. On Tuesday, the leading index reached its highest level since January 2018 at 13,308 points. Since the beginning of October, the index has risen by around 12 percent.

Stop and Go in the Customs Controversy

As is so often the case, happy customers from Washington made me buy. US economic advisor Larry Kudlow told journalists yesterday evening that talks about a first partial agreement in the trade dispute were in the final phase. He added there were “very constructive discussions” with Beijing and “the mood is pretty good”. Both sides were in close telephone contact and an agreement could soon be reached.
Previously, the Financial Times had slowed down the bulls a little. Citing an insider, the paper reported that frustration about China was growing in the Trump administration. For Beijing had not offered enough concessions to justify a reduction in American punitive tariffs. China is thus delaying a solution and lowering the chances of concluding a deal in the coming days. Perhaps that was a gang warning to the Middle Kingdom.
One thing is certain: the matter remains exciting. If you trade stocks or CFDs online, you should have direct access to the market and keep an eye on regular market updates. A customs deal might also involve buying from US farmers – which is why traders might want to take a look at soy. The January contract has been trading at $917.38, almost unchanged recently.

China keeps interest rates up

Meanwhile, shareholders in the People’s Republic held back. In China, the CSI-300 fell by 0.7 percent to 3,877 points. Many brokers were also disappointed that the Chinese central bank has kept the rate for medium-term loans to financial institutions (MLF) unchanged at 3.25 percent. After all, the central bank pumped a further 200 billion yuan (26 billion euros) into the money market to prevent lending rates from rising. But this was judged to be too little. China’s economy is currently growing as slowly as it did almost 30 years ago. In Tokyo, the leading index Nikkei 225 bid farewell on Friday 0.7 percent firmer at 23,303 points.

Mountain air in New York

Supported by the positive statements in the tariff dispute, Wall Street remained close to its all-time highs on Thursday. The Dow Jones Industrial closed the day down slightly by 0.01 percent to 27,782 points. The broad S&P 500 gained 0.1 percent to 3,097 points, but did not reach a new record high. The Nasdaq 100 barely oscillated a noticeable 0.02 percent back to 8,258 points.

Switzerland warns against intervention

The Swiss National Bank (SNB) has confirmed its willingness to intervene in the foreign exchange market following the recent appreciation of the Swiss franc. In addition, the SNB is also relying on negative interest rates of currently minus 0.75 percent. In view of this development, many brokers had speculated that the SNB’s willingness to intervene had diminished. Yesterday, the franc reached its highest level since the beginning of October against the euro.

Back and forth in the oil market

Oil traders currently need strong nerves. On the one hand, the Department of Energy reported an increase in reserves of 2.2 million barrels. And thus contradicted the American Petroleum Institute, which had reported a reduction of 0.5 million. In addition, OPEC’s production increased by 943,000 barrels per day to 29.7 million barrels in October compared to the previous month. Hopes of an end to the customs dispute supported prices somewhat. WTI fell by 0.1 percent to $56.73, Brent lost 0.4 percent to $62.06.

That brings the day

The diary brings some interesting events to the end of the week, the overview can be found as usual here: Market Mover

First, the Empire State Index arrives at 2:30pm.
At the same time, US retail sales and industrial production will run via the tickers.
Capacity utilization will follow at 3:15pm.
And at 4pm the stock inventories are reported.

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

Important Notes on This Publication:

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

15.11.2019 – Special Report. The theatre of public hearings in Washington has begun. No one is yet assuming that President Donald Trump will be deposed – the latest all-time highs speak for this. No wonder, the US brokers know facts that are usually swept under the carpet by the German media as unfounded conspiracy theories. And which we hereby provide to you. Despite everything, the bulls are in danger.

Public opinion as a means of exerting pressure

The Democrats will let trump-hating witnesses from the establishment parade against the president in front of the cameras. With the constant repetition of the litany, public opinion is to be pushed unassailably in the direction of impeachment. This could succeed and break up the Republican defensive bloc in the House of Representatives and the Senate.

Trump goes, the crash comes

If the Democrats remove Trump, Wall Street is likely to collapse by 25 to 30 percent from the recent highs. The stock market doesn’t like surprises and certainly doesn’t like the departure of a business-friendly president. A sellout is likely to occur especially if the radical left-wing Elizabeth Warren or Bernie Sanders prevail in new elections.
In early November, the New York Times reported rising nervousness on Wall Street over Warren. And Goldman Sachs calculated that corporate profits could fall by 11 percent if she could implement her plans in the White House. Hedge fund manager Paul Tudor Jones said at the Robin Hood Investors Conference in New York at the end of October that the S&P 500 would crash by 25 percent if Warren was elected in early 2020, according to Bloomberg. We think In addition to shorts on US indices, long trades on gold or silver could also be worth a look in this scenario.

Mega bear market in a revolution

A dismissal of Trump would also be a signal that the people can vote for whom they want. Because the establishment of democrats, corporate media and bureaucracy will in any case remove any president they don’t like. De facto this would be a coup d’état that transforms the US presidential democracy into a parliamentary democracy. Some US commentators believe that a revolution will break out if Trump is overthrown. Which Dow, S&P 500 is likely to cause far more than 25 percent to fall.

Trump bull market at the end of the smear theatre

Should the show end, however, as expected by most brokers so far, then the stock market should go up. For example, if the matter fails in the Senate. There would be a nice spike if the House of Representatives were to drop everything. If Trump is re-elected, the above-mentioned hedge fund manager Tudor predicted a possible rise in the S&P 500 to 3,600 points. Long positions on the Dow, Nasdaq and S&P 500, but also on the DAX, would then be the obvious choice.

Show trial in Washington

This brings us to the currently known facts. The impeachment is anything but fair. Since it was initiated under the leadership of the House Intelligence Committee, secret hearings could be held. Unlike Bill Clinton or Richard Nixon, Trump was also denied access or legal representation by the head of the committee, Adam Schiff (D-CA). The secrecy made the Democrats look bad, so they switched to a public hearing. But Schiff can veto witnesses summoned by the Republicans – which the Republicans can’t do.

Quid pro Quo?

At the heart of the investigation is Trump’s telephone conversation with Ukrainian President Volodimir Selensky on 25 July. Trump is said to have exerted pressure here to take a closer look at the Biden family – allegedly abusing his power to harm a political competitor. At the same time, the Ukrainian did not even know that military aid amounting to around 390 million dollars had been stopped. Ultimately, the money flowed. So where was the leverage? The Ukrainian also confirmed to journalists in the UN on 25 September that there had been no pressure.

Fight against corruption

It is also the President’s job to ensure that American taxpayers’ money does not seep away. There is no protection for political competitors. According to Breitbart News, Catherine Croft of the State Department recently confirmed that Trump had withheld military aid to Ukraine by the end of 2017. He was concerned about the rampant corruption under Petro Poroshenko’s government and frustrated that the US would have to pay for the defense. Trump was also worried about Russia’s reaction to the delivery of heavy weapons. And even if Trump has built up pressure: that is day-to-day business in politics. Nobody knows this better than the Democrats.

Pressure from Biden on Ukraine

Because in his time as vice-president Joe Biden enforced that Ukraine closed its Attorney General Viktor Shokin. He once investigated corruption at a Ukrainian gas company called Burisma Holdings – and his son Hunter Biden, who in turn had been employed since 2014, paid a hefty 50,000 dollars a month. The task: unclear. In fact, before the Council on Foreign Relations, Biden boasted that he was forcing Ukraine into a corner with the threat of either dismissing the prosecutor or waiving $1 billion in loans. You can watch the video here.
According to Biden, President Barack Obama knew about the blackmail that had driven Ukraine into national bankruptcy. Shokin signed an affidavit that he was fired for targeting Burisma. It remains to be noted that Hunter Biden flew more often in Air Force 2. And that he had some shady deals on funds in China.

Impeach yourself

Furthermore, the Democrats, who like to look the other way in these matters, did exactly what they now accuse Trump of doing. In May 2018 the three democratic senators Robert Menendez (D-NJ), Dick Durbin (D-IL) and Patrick Leahy (D-VT) politely but unequivocally urged the Ukrainian Attorney General Yuri Lutsenko to support investigations against his own president. At that time it was about the claim, refuted by the Mueller Report, that Russia had helped Trump in the 2016 election campaign. By the way, Lutsenko followed Shokin. You can see the letter here.

Coup of the Deep State

Trump’s assertion remains that there’s a Deep State coup against him. In fact, Trump’s opponents had already considered an impeachment before he had even won the Republican nomination – this was reported by “Politico” in April 2016. Even the left-wing “New York Times” admitted that the Deep State existed. Michelle Cottle, member of the editor-in-chief, wrote on 20 October: “President Trump is right: The deep state is alive and well. But it is not the sinister, antidemocratic cabal of his fever dreams. It is, rather, a collection of patriotic public servants – career diplomats, scientists, intelligence officers and others – who, from within the bowels of this corrupt and corrupting administration, have somehow remembered that their duty is to protect the interests, not of a particular leader, but of the American people.” Well-meaning officials who know everything better and act only for the good of the people. But unfortunately they were not elected by the people.

Whistleblower or agent?

The fact that the lawyer of the whistleblower, Mark Zaid, already tweeted on 30 January 2017 that Trump had to be got rid of fits into the picture. So one week after the impeachment. Specifically: “#coup has started. First of many steps. #rebellion. #impeachment will follow ultimately.” Strangely enough, the Democrats refuse to summon the whistleblower before the impeachment jury. His name has become an open secret in Washington. The vita of the tipster points to an extremely biased agenda. According to “Red State,” he is a Democratic member, working for Joe Biden and former National Security Advisor Susan Rice, who served under Obama.
The fact that the tipster was able to deliver his now impeachment-inflated statement at all is because the Intelligence Community Inspector General (ICIG) cleared the way for it. Sometime in the past months this allowed a statement according to “Epoch Times” and other media from hearsay. Previously, only first-hand knowledge was allowed.

Clinton and CrowdStrike

Perhaps the impeachment is a first strike against Trump, which perhaps came too close to another matter: a possible intervention of the Democrats in the 2016 election campaign against Trump with the help of Ukraine. And that brings us to Hillary Clinton. Trump mentioned the company CrowdStrike in the phone call with Selensky – it investigated cyber attacks on the Democrats and blamed the Russian secret service. An investigation by the Department of Justice is currently underway on this subject: Inspector General Michael Horowitz is now illuminating the FBI investigations against the Trump election campaign in the course of the Mueller Report.

Only volatility is guaranteed

Conclusion: According to all that is known so far, Trump has not committed an impeachment-worthy crime – the US constitution provides for “Treason, Bribery, or other high Crimes and Misdemeanors”. Ultimately, he did nothing but the Democrats. But they don’t care. Perhaps because they have themselves been targeted. So let’s wait and see what new facts come onto the table. And how the Republicans fight for public opinion in the battle.
What is certain is that the stock market doesn’t like uncertainty – if there is an impeachment vote, we should see increased volatility. Which would make the VIX a long trade. So keep an eye on it and keep your trading platform open.
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.

The media keep getting insider hints about the possible trade deal, though there are still a lot of unsolved issues between the two states. Federal Reserve Chairman Jerome Powell has pointed out that the global economy is slowing down and that trade conflicts can have a serious impact on further growth around the world.

AUD/USD day chart

There’s nothing new in the crypto market, with decreasing volatility, average trading volumes, and no major news. China now believes that cryptocurrencies are the future, so it might soon relax its pressure on crypto enthusiasts.

EUR/USD

Euro still can’t manage to find support. In spite of some optimism stemming from the German GDP data, US dollar remains the stronger currency. As for the US, it’s quite clear how the Fed’s policy will unfold: the interest rate won’t be cut again this year so as not to create trouble in the markets before Christmas. All signs point in favor of the dollar, which can propel the trading pair to new local minimums.

GOLD

On Thursday, gold found new support and recovered some of its losses. With no positive news on the trade talks, investors are starting to worry that the stalemate will become long-term. This pushes up the price of the safe haven asset. Until there’s some clarity on the future of the trade war, investors are likely to keep buying hedging assets, such as gold.

INDICES

The markets can’t seem to find a direction. Investors are too confused to act decisively. Most of the indices lost slightly due to a lack of progress in the US-China trade talks. Friday is usually the day with traders take profits, so we’re unlikely to see major growth.

What’s next?

01.50 Japan: GDP data for Q3
12.00 EU: consumer price index since January
15.30 US: retail price index for October
15.30 US: retail 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.

14.11.2019 – Daily Report. What is holding back investors in Frankfurt? While Wall Street is constantly reporting new records, the DAX is hesitating. And this despite the fact that positive news has come in from the German economy. But news in the customs dispute between China and the USA is slowing the buying mood.

Frankfurt hesitates again

Once again, German investors were hesitant in early trading. The DAX lost 0.3 percent to 13,195 points by midday. Following relatively strong German economic data, many brokers now believed less in a more relaxed interest rate policy on the part of the ECB. EURUSD fluctuated slightly around 1.10.

German recession avoided

Contrary to almost all expectations, the German economy has again grown slightly. In the third quarter of 2019, the gross domestic product (GDP) increased by 0.1 percent compared to the previous quarter, as reported by the Federal Statistical Office. According to revised figures, there was a decline of 0.2 percent in the second quarter. At the start of the year, Germany had recorded growth of 0.5 per cent according to a new calculation. The new figures avoided a “technical recession”, as economists see it when economic output shrinks two quarters in a row. All data can be found here: Market Mover

New Customs Controversy Stopper

And, of course, this slowed down the fact that the customs dispute between China and the USA is not looking as rosy as hoped. First, the Wall Street Journal reported that talks were now hanging over Chinese purchases from US farmers. And China insisted on a withdrawal of punitive tariffs as part of a Phase 1 deal. As CNBC reported, Gao Feng, spokesman for the Chinese Department of Commerce, was indirectly calling for this. He explained that if both sides reach an agreement on the first partial agreement, the customs rollback must fully reflect the importance of the partial agreement. USDCNY was at 7.0195.

China’s economic engine stutters

Beijing also desperately needs a deal. Industrial production in China grew much more slowly than expected in October. Production rose by 4.7 percent in October compared with the previous year, according to the national statistics office. Most analysts had expected an increase of 5.4 percent. Growth from January to October is the lowest since Reuters records began in 1996. Retail sales were at their lowest level since 2003 and investments were weakest since 1998. Hoping for government intervention, the CSI-300 in China rose by 0.2 percent to 3,906 points. The Nikkei index meanwhile fell by 0.8 percent to 23,141 points.

Dow Jones with new record

Unimpressed by the start of public impeachment theatre in Washington, the Dow Jones set a new final record. For the first time in its history, it passed the 27,800-point mark – partly due to a price jump at Walt Disney. At the closing bell, the leading index gained 0.3 percent to 27,783 points. The S&P 500 rose by 0.1 percent to 3,094 points. In contrast, the Nasdaq Composite lost 0.1 percent to 8,482 points.

Fed in a sideways movement

The brokers followed the statements of Fed chief Jerome Powell before the congress with excitement. As expected, he confirmed the prospect of a pause in interest rates in the USA.

This is what the day brings

On Thursday there will be some market moving topics.
First, US producer prices will be announced at 2:30pm for October.
At the same time, the first weekly applications for unemployment benefits will also be reported.
Otherwise, it’s Fed day again – all day long, bosses of regional central banks step up to the microphone – so be sure to keep an eye on your trading platform. The most important date for trades in dollars and US treasuries is Fed chief Powell’s speech to the House Budget Committee at 4pm.

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.

All key news of Tuesday and Wednesday have to do with the US. Trump’s Tuesday speech didn’t manage to inspire investors. The trade issues between the United States and China remain unresolved. Impeachment hearings are to commence in Washington. Investors are waiting for the results, but what will come out of it is anyone’s guess.

EUR/USD day chart

The trend for lower volatility in the crypto market continues. BTC price dipped below $8750 twice. Market players don’t show much reaction to impulse movements and are unwilling to join in. Chinese authorities are making more frequent mentions of crypto and have even announced a plan to launch a digital yuan. Such positive news can render traders more optimistic and give the market a much-needed shake-up.

EUR/USD

Euro has lost its market positions and is down for the eighth day in a row, while USD remains stronger than ever. The US consumer price index for October equalled 0.4%. There’s little indication that the Fed will lower the interest rate once again. Finally, the trade talks between China and the US are close to the finish line. Meanwhile, uncertainty still rules in Europe, there are no positive signs for the economy, and Brexit is almost upon us. The trading pair is likely to fall even lower.

GOLD

Gold was in a much better position on Wednesday and managed to retain its upward movement. Since there’s no news about the US-China trade deals, investors are switching to more secure assets as their skepticism grows. In any case, investors know that their gold bars aren’t going anywhere. If any fresh signs of an upcoming global recession emerge, the demand for gold will grow dramatically.

INDICES

Almost all global indices were in the red on Wednesday. Trump didn’t say anything new about the trade deal, and there were no major economic news. This absence of fresh information can cause the indices to fall lower; indeed, the market has experienced a significant rally recent, and now all the players need to take profits and have a breather.

What’s next?

01.50 Japan: GDP data for Q3
04.00 China: manufacturing data from the start of 2019
15.30 US: industrial price index 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.

13.11.2019 – Daily Report. More of the same in the matter of customs disputes – negotiations are underway; however, new US punitive tariffs on Chinese products are certainly possible if the deal goes ahead. For the frugal Wall Street stock market players, this is enough for a new final record in the Nasdaq Composite and a high in the S&P 500. But the DAX is crumbling in early trading, especially as US punitive tariffs against the EU continue to threaten. Investors are now turning their attention back to the Fed.

Frankfurt resigns

Investors in the German stock market were hesitant to invest on Wednesday morning. The DAX recently slipped by 1 percent to 13,145 jobs. On the previous day, the stock market indicator had once again reached a new annual high of 13,308 points. The brokers analysed this on the one hand and on the other hand by US President Donald Trump on the previous evening – in the end it was too little for investors.

A nose for China and Europe

To China, the Potus (President of the United States) said in the Economic Club of New York that a treaty could soon be concluded. However, Trump would only agree if he was good for the USA. A concrete timetable for a conclusion also remained open. If there was no agreement, US tariffs on imports from the Middle Kingdom would be significantly increased.
The tone was rather unconciliatory after the recent conciliatory tones: since China’s entry into the World Trade Organization in 2001, no one has cheated better than China, Trump said. However, the president blamed the former US administrations in particular for this, as they had ultimately caused damage to American workers, especially in the manufacturing sector. In fact, Trump has a point here: if you leave the trendy places on the east and west coasts such as Nantucket or Beverly Hills behind you, you will see misery and hardship. Former industrial champions like Detroit or Baltimore are more like African slums in some areas than cities of the leading economic nation.
There was no all-clear for Europe. Many brokers had hoped that Trump would announce a shift from punitive tariffs to car imports from Europe. That was not the case. The President also said that trade talks with the EU will be much more complex than with China. This was another reason why EURUSD slipped to 1.10 in the morning.

Losses on the Asian stock markets

In Asia, the continuing protests in Hong Kong also unsettled the stock market. All schools in the Chinese special administrative zone are to remain closed tomorrow. The Hang Seng index fell by 2.1 percent to 26,508.74 points. The CSI-300 dropped 0.1 percent to around 3,900 points. In Tokyo, the Nikkei 225 slipped by 0.9 percent to 23,320 points. Previously it had risen for seven days in a row.

New York remains optimistic for the time being

De Börsianer in New York had rather pulled the positive news out of the Trump speech. The Nasdaq Composite closed 0.3 percent higher and closed at an all-time high of 8,486 points. Previously, it had reached a new high in the course of the day, just like the S&P 500, which for the first time passed the 3,100 mark. In the end, the S&P 500 gained 0.2 percent to 3,092 points. The Dow Jones closed unchanged at 27,691 points. The price for the troy ounce of gold plunged to 1,446.19 dollars in view of the continued appetite for risk, but recently recovered again to 1,462.92 dollars.

Tax cut delights Wall Street

What remains is an issue that has been rather lost in this country so far, although it explains the strength of Wall Street and the dollar. The White House’s Trump team has recently started discussing a tax cut to 15 percent, which would help the middle class and should have a positive impact on Trump’s re-election. In particular, advisor Larry Kudlow, head of the National Economic Council, supports the issue, as the Washington Post reports on Tax Cut 2.0. Since budget sovereignty lies with Congress, republican MPs would of course also receive a tailwind from the idea, which is why the first proposal of this kind – with an average of 10 percent – disappeared again in the push country after the Democrats’ victory in the Midterms. There are currently seven levels in the income tax – 10, 12, 22, 24, 32, 35 or 37 percent. Of course, a flat tax would push consumer stocks and car stocks and ultimately the entire economy and the U.S. stock market. So you should keep an eye on the issues on your trading platform.

Bitcoin for concrete gold

And last but not least, a factlet that should interest Bitcoin traders: The crypto currency seems to be gaining confidence. On November 1, real estate tycoon Ben Shaoul sold a condo in the Upper East Side of Manhattan for 15.3 million dollars – payable in Bitcoin. This has reported the magazine “The Real Deal”. According to the magazine, the head of the Magnum Real Estate Group sold the apartment to the Taiwanese company Affluent International. Someone probably doesn’t trust the dollar. Bitcoin last changed hands for 7,981.55 euros.

This is what the day brings

The diary contains some interesting events, you can find the overview here as always: Market Mover

When you trade CFD, it gets really interesting at 5pm. Fed Chairman Jerome Powell then addresses the Congressional Joint Economic Committee. Tomorrow he will appear before the House Budget Committee. This could move the stock prices on Wall Street, US Treasuries and the Dollar strongly – which doesn’t scare you if you use powerful servers at Germany’s best CFD brokers – but please with a Bafin license.
US consumer prices will be announced at 2:30pm in October.
At the same time, the US real incomes in October are being reported via the ticker.
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.

In the absence of major macroeconomic news on Tuesday, global markets waited for Donald Trump’s speech at the New York Economic Club. Investors took his appearance so seriously that the US market managed to set a new record, though the volumes were low.

S&P500 day chart

The world’s leading cryptocurrency has been struggling to grow since July. Protracted channeled movement usually ends in a slump. Crypto enthusiasts have been holding to their BTC for a long time, while new waves of buys and sells create speculative structures eager to manipulate the market and earn a quick profit. The current trend is likely to continue in the near future, and we’ll witness a lot of movement in the crypto market.

EUR/USD

The euro zone is waiting for Trump’s decision on 25% import tariffs on cars and spare parts from Europe. The market doesn’t believe that such a serious change in the relationship between the key trading partners can actually take place. However, Trump’s intention is to transfer as much manufacturing capacity is possible to the US and create a record number of jobs. Thus, he’s likely to give green light to the tariffs. Euro has reached the week’s new low, heading for 1.09.

GOLD

Trump’s speech wasn’t great for gold. His statements about economic growth and transferring industrial capacities to the US had a positive effect on the stock market, giving new faith to investors. By the end of the day, gold has fallen to $1450 per ounce.

INDICES

Since there was no important news on Tuesday, the main indices recovered Monday’s losses and prepared for the US President’s speech, given that he tends to devote much attention to the current economic issues both globally and in the States. It seems like the effect of the trade talks between China and the US on the markets has already run its course; Trump’s optimistic statements had virtually no impact, either.

What’s next?

03.00 New Zealand: Central Bank’s decision on the key interest rate for November
11.30 UK: consumer price index for October
15.30 US: consumer price index 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.

12.11.2019 – Special Report. Celebrating the abyss: Greece is pleased with increased demand for its government bonds. Wall Street is holding its own at a record high. The warnings of crash prophets like Robert Shiller can no longer be ignored – he sees no escape from the financial Armageddon. Especially in the bond market a huge bubble is inflating.

Hellas is hip again

Hooray: As the Financial Times has just reported, for the first time since the 2008 financial crisis Athens has given up its status as the most risky sovereign borrower in the eurozone. To Italy. The yield on five-year Greek bonds was therefore over 60 percent at the beginning of 2012, most recently at less than 0.5 percent. So much optimism is surprising – what has actually changed in the Greek business model? In fact, the new hunger for risky government bonds is only the result of zero interest rates – investors are desperately looking for investment opportunities. Is the next bond bubble building up again in Europe? It looks that way.

Bubbles everywhere – no place to go

It’s no different in the United States. Nobel laureate Robert Shiller recently spoke with a drastic warning. At the end of October, the Yale professor told investors in Los Angeles: “There’s no place to go. You just have to ride it out.” And further he sees “bubbles everywhere”. The economist advised waiting, consuming savings and sitting out the crisis – flight and hiding pointless. And Shiller is not just anyone: the economist predicted the stock market crashes in 2000 (dot-com bubble) and 2007 (subprime crisis in the real estate market). His book “Narrative Economics” has just been published.

Grace period for US equities

After all, an economic crash on the stock market could still take a while, as Shiller expects an annual return of 4.4 percent over the next thirty years. Shortly before the apocalypse date in L.A., Shiller said in an interview with CNBC that a recession is still years away, which is due to the bullish trump effect in the market. And “Barrons” reported in August that Shiller sees no bubble in the US stock market – but certainly elsewhere. Like Bitcoin, Canadian real estate market, marijuana stocks.

It’s going to end badly

And the US real estate market is also in a bubble, added Shiller in LA. The whole thing is reminiscent of 2005, when San Francisco and Los Angeles were already showing signs of weakening. On the bond issue, he said, “this can’t keep going and it’s going to end badly.” So the thing would end badly.

Gigantic national debt

In fact, public debt in the US is heading towards the enormous $23 trillion mark by the beginning of the year (23 trillion in US English). As the blog Economica reported, 17 trillion are publicly traded treasuries and 6 trillion are loans within the state, i.e. for social security, pension funds or between central government, municipalities or states. Below in the chart the Federal Funds Rate (FFR), that is the interest rate for short-term debt.

Withdrawal of private investors

According to Economica, the enormous rise in public debt is an act of desperation. In a demographic sweep, the blog concludes that the poor population is growing worldwide in the wake of unrestrained overpopulation; and that even in the US, the only class that is also growing is that of owning pensioners – but that is traditionally risk-averse. This means that the Fed has no choice but to provide people with cheap loans for cars, houses and universities.
In line with this, UBS Global Wealth Management has just announced that the world’s rich are preparing for a turbulent year in 2020 and want to withdraw from the market. The reasons are the unresolved trade conflict between China and the US and the presidential election in the US. Already, 25 percent of the assets are in cash. More than 3,400 investors with at least 1 million dollars of free capital were surveyed. Four fifths of them believe in an increase in volatility and 55 percent think there will be a significant sell-off on the stock market before the end of 2020. 60 percent want to increase their cash holdings further.

Steroids from the Fed

Another crisis signal: the banks in America are still reluctant to lend money to each other in the short term. The New York Fed is continuing its infusion of dollars, once launched as an emergency operation in the Repurchasing (Repo) Market. Since the campaign began at the end of September, the Federal Reserve’s balance sheet has inflated by 200 billion dollars. The investment consultant Michael Pento of Pento Portfolio Strategies aptly called this Quantitative Easing (QE) “on steroids”.

How to protect yourself from a crash

We think The Shiller warning sounds very much like a total deflationary crash like in 1929. In fact, the question is how the US and Europe will ever pay off their mountain of debt. Especially if investors don’t pump money into the real economy, which is actually the point behind the low interest rates. But when money houses instead gamble away, for example in the market for collateralised loan obligations or risky bonds issued by debt states. Panic on the stock market would be the logical consequence.
If you trade CFD or online stocks and follow Shiller in the doomsday scenario, then a short position on Wall Street indices and the DAX could be an option. Furthermore, in such a scenario it would be conceivable that gold and silver could benefit from this.
Small denominations of gold and silver would also be helpful – while people have lost faith in paper money several times in history, this has never been the case with precious metals. Then we have to sit out the reset of the hour zero. We are curious to see whether the doomsday scenario will occur and keep an eye on things for you.

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.

12.11.2019 – Daily Report. Tailwind from the German economy: Germany’s leading index climbs ahead. Brokers also referred to the so far positive reporting season in the USA and Germany.

Profits in Frankfurt

The DAX rose on Tuesday morning. Most recently, the leading index held up 0.5 percent to 13,265 positions. The ZEW-Index from Mannheim was a source of joy, the economic expectations of the surveyed experts from the economy turned out much better than expected with – 2.1. All data can be found here: Market Mover

The consolidation of Wall Street at a high level also provided some impetus. Especially since the reporting season was well received in the USA and Germany. The most recent example of this was Infineon, which the stock market thanked with a full plus. Investors also hoped that the US would postpone punitive tariffs for the German auto industry. Otherwise, there was largely radio silence on the news front.

Nikkei in plus

Investors in China have been staying sideways lately. The Chinese CSI-300 closed unchanged at 3,904 points. In contrast, the Nikkei index rose by 0.8 percent to 23,520 points. The weaker yen provided a tailwind, and the USDJPY recently reached 109.164, a five-month low.

Mixed trend in New York

Wall Street, too, had shown no clear trend the previous evening. The Dow Jones achieved a minimal gain, but this was mainly due to price gains in the heavyweight Boeing share. The Dow recently closed 0.04 percent higher at 27,691 points. The closing record last Thursday was 27,774 points. The S&P 500 lost 0.2 percent to 3,087 positions, the Nasdaq 100 also slipped by 0.2 percent to 8,242 points.

Middle East powder keg

After the Israeli military action in the Gaza Strip and the rocket attacks of the Arabs on Israel, the oil market came into focus. Israel has switched off Baha Abu al-Ata, commander of the northern Gaza front of the Palestinian Islamic Jihad (PIJ), with a targeted military strike. The Israelis also killed Akram Al-Ajouri in Damascus, the PIJ liaison officer with the Iranian Al-Kuds Brigades in Syria. Around 50 missiles rained immediately on Israel, of which the Iron Dome defence system shot down almost two dozen. Israel justified the attacks with an imminent major offensive by the PIJ.
The always well-informed Debka website reported that Iran and its allies were currently discussing an attack on Israel. Which in turn would allow an Israeli air strike on Iran, perhaps with the support of the Saudis. If you are trading CFDs in the oil market, it is important that you keep an eye on the issue and keep market access open. The market still reacted calmly, WTI recently increased by 0.1 percent to 56.90 dollars, Brent also increased 0.1 percent to 62.27 dollars.

China faces the digital currency

Bitcoin initially hardly responded to a report from China and maintained a plus of 0.5 percent at 7,950 points. Jack Lee, Managing Partner of HCM Capital, told CNBC that Beijing has set the framework for a digital currency – Digital Currency Electronic Payment or DCEP. Lee is considered to be well connected because his investment company is supported by Foxconn Technology. With DCEP, the central bank is in a position to offer a crypto currency for commercial banks or retail traders such as Alipay or WeChat Pay. China could bring it to market within the next three months, the manager said at the Singapore FinTech Festival. And that probably means that the Western world will be focusing on regulation, which should cause considerable turbulence in the crypto market.

This is what the day brings

On Tuesday, there are no really market moving economic data on the calendar. Global trading focuses on news from the world of politics.

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.