News

04.11.2019 – Daily Report. Up, up and away: S&P 500 and Nasdaq 100 set new records. The DAX breaks the 13,000 points in early trading. No wonder, since the positive signals in the China-USA customs dispute are now towering.

German stocks with profits

This is how it works: The DAX once again reached an annual high at the beginning of the week. And it broke an upward gap at the same time. Germany’s leading index recently rose by 1.1 percent to 13,100 points.
On the one hand, the fact that US Secretary of Commerce Wilbur Ross indicated in an interview with Bloomberg that Washington could dispense with punitive tariffs on imported cars was a source of joy. For there had been positive discussions with car manufacturers in the European Union, Japan and Korea. In addition to strong economic data from China and the USA, news about the customs dispute between China and the USA was the main reason for the buying mood of the stock market in Frankfurt.

Only the signature is missing

“We’re making good progress,” American Secretary of Commerce Wilbur Ross said on Sunday. There is indeed “no reasonable reason” why ‘Phase 1 of the trade agreement could not be concluded this month, Ross said in an interview with Bloomberg TV. In addition, there could soon be licenses for all American companies that wanted to sell components to Huawei.
In addition, US President Donald Trump’s economic advisor Larry Kudlow said earlier that several chapters – on agricultural products, financial services and currency issues – were “practically ready”. Elsewhere, there has been great progress. US President Donald Trump also said on Saturday that Phase 1 could be signed in Iowa.
There remains a small detail that is quickly forgotten: the signature is still missing. Should there be a bitter disappointment here, then the prices will most likely rattle downwards. There is also the possibility that the market will act according to the motto “buy the rumor, sell the fact”. If you trade CFD or online stocks, you should therefore always check for regular market updates and at least consider a short position – regardless of whether you are successful or unsuccessful in the customs dispute.

Opportunity with Renminbi

All this leads to an interesting aspect in the foreign exchange market. The South China Morning Post reported that there is another fact pointing to an agreement. China wants to stabilize the yuan to support the conclusion of a trade deal. Specifically, the People’s Bank of China (PBOC) announced on Friday that it will offer Yuan-denominated assets with a total value of 30 billion Yuan (about 4.3 billion Dollar) this Thursday in Hong Kong. This is a way to push up lending costs, making it more difficult for speculators to bet on a falling currency. In addition, the yuan is sucking out of the market. Specifically, the auction is to offer 3-month securities worth 20 billion yuan and one-year-olds over 10 billion yuan.

China shares want to go up

In the light of the news, investors in China got in. The CSI-300 rose by 0.7 percent to 3,978 positions. In addition, China’s industry grew as strongly in October as it did two years ago. Meanwhile, Japan did not trade because of Culture Day.

Records in New York

There were also happy customers from the USA on Friday: The US labour market did not lose as much momentum as feared with 128,000 new jobs created in October. The unemployment rate remains close to its 50-year low.
Investors in New York therefore took action. The S&P 500 climbed by 1.0 percent to an all-time high of 3,066 points. The high-tech index Nasdaq 100 also rose by around 1 percent to a record 8,161 points. The Dow Jones Industrial rose by 1.1 percent to 27,347 points. The Dow is thus only a few points short of its record high of 27,399 last July.

Public impeachment hearing at last

What remains is a factlet from politics: yes, the Democrats have finally launched the official impeachment hearings on a vote. And finally they should take place in public and not behind closed doors. But no, the Dems don’t agree – two Democrats voted against. Only one ex-Republican and now Independent voted for it. The Republicans voted unanimously against. That looks like a tiny crack in the Democratic front.

That brings the day

The diary brings only a few interesting events, the overview can be found as always here: Market Mover
First, the ECB Monthly Bulletin is due at 3:45pm for October.
At 4pm orders for US industry will follow for September.
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.

The end of the week was full of important news. US job growth in October slowed less than expected. Investors are optimistic towards US labor market reports and do not expect recession in the US economy. All this, combined with the Fed’s easy monetary policy, can add some drive to all global markets. But what about cryptocurrencies?

S&P500 Daily Chart

Cryptocurrencies are still trading sideways. Market capitalization of all the cryptocurrencies is 248 billion USD now. New users entering crypto market, as massive price collapse last winter and all the problems seem to be in the past. Institutional investors are still wary of cryptocurrency, since any large project meets serious barriers from US regulators. That thing happened both to Facebook’s Libra cryptocurrency and Bitcoin ETF. There is no important news now, and that gives traders a hard time with choosing the direction to enter the trades.

EUR/USD

EUR regained its positions on Friday. Bullish momentum on the market is supported by anticipation of US-China trade negotiations, possible impeachment of US president and upcoming news on EU economy. US dollar can show signs of weakness next week and EUR may retest 1.12 important level once again.

GOLD

Gold is still a haven for many people. The price hit last week’s high on Friday. Many traders were expecting price decline after US macroeconomic data came out, but strong dependence on news and uncertainty on Brexit in Europe still supports the demand for this precious metal.

INDICES

World markets showed positive movement before closing for weekend. The traders were enthusiastic about Non-Manufacturing Business Activity Index released in China, and on US jobs report. Most of the blue chips on US market are trading in green zone. We may see new all-time highs on S&P500 this week.

What’s next?

10.55 German Manufacturing PMI in October
11.30 Construction PMI in October, Great Britain
14.30 Initial Jobless Claims in October, US

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.

31.10.2019 – Special Report. The scenarios of doom are accumulating: the price of oil is on the brink of collapse. Because the shale industry in the USA has to get the hell out of it. As always, discipline within OPEC leaves much to be desired. And a global recession is quite possible.

Crash cocktail for crude oil

Drastic warning of the end of the oil world as we know it: Journalist Julianne Geiger recently brought a price of 10 dollars a barrel into play on Oilprice.com. “Is $10 oil really possible?” Absolutely. A crash is inevitable when the following factors coincide: Above all, high OPEC production, high US production, high inventories, a collapse in demand, capitulation by speculators.
In fact, the International Energy Agency has consistently lowered its forecasts for an increase in demand in the current year – from 1.4 million barrels per day in January to only 1.1 million at last. OPEC, too, had repeatedly pushed down its growth forecasts for demand. All in all, the scenario is as follows: persistently weak demand with robust production.
In fact, Keisuke Sadamori, Director for Energy Markets and Security at the International Energy Agency (IEA), warned CNBC of an impending oil glut in the coming year. The reasons are continued uncertainty in the global economy and the Brexit.

Is history repeating itself?

A decade ago, traders had to find out what was possible. At that time, the oil price slipped from over 140 dollars per barrel in 2009 to below 40 dollars in 2008. Wasn’t there something? Right: A financial crisis that shook the banking world. And the real economy was there too. And what the closing of long positions in the oil market entailed. This is also possible today: it was not until September of this year that the credit crunch in the American interbank sector, which had recently eased again, signalled that enormous mistrust still prevails among commercial banks. The assumptions about the reasons range from the overturning of large equity managers to the bursting of the bubble in collateralised loan obligations.

Threatening demand shock

And in 2014/15 the scenario repeated itself almost to the same extent: the oil price slipped from over 100 dollars to under 30 dollars. At that time, major importers such as China and India were experiencing an economic slowdown. At the same time, US production was booming during the fracking boom. The current oil price of around 55 dollars per barrel of WTI and 60 dollars per barrel of Brent is a long way from the peaks of the time. But actually, demand appears to be in jeopardy at the moment: The outlook for the global economy is clouding over. A trade agreement between Beijing and Washington is anything but certain.

Preprogrammed Oil Glow

This is accompanied by problems on the supply side. OPEC is not cutting production fast enough – especially as the socialist paradise of Venezuela and Iran, ruined by the mullahs, urgently need foreign exchange. It is anything but certain that the OPEC+ will agree on a drastic quota cut in December. Russia, in particular, wants to put an end to US competition with a persistently low price. Deputy Russian Energy Minister Pavel Sorokin just told the news agency TASS that it was too early to discuss deeper cuts. Nigeria has also negotiated a secret exception with the cartel, Reuters reported. Especially as the maltreated Libya and Iraq want to increase their production and are likely to do so.

Democrats unintentionally push shale oil

And Oilprice.com just reported an interesting political effect in the American oil market: The hardcore communists among the Democrats have come out in favor of a fracking ban. Senator Elizabeth Warren from Massachusetts and Senator Bernie Sanders from Vermont want to ban hydraulic fracturing in the event of an election victory in 2020. Of course, there is no oil industry in their states and nobody loses their job.
But the democratic presidential candidates have accidentally achieved what they actually want to prevent: They have boosted US oil production. The small shale drills in particular now have to forestall a ban and build up stocks. Especially since the financing crisis is forcing many small companies to increase their output anyway. Because if you don’t get any more money from the bank, you have to make more turnover than the quantity.

Goldman Sachs warns against 20 dollars per barrel

All in all, the risks of an oil price collapse are real. Goldman Sachs has also recently made statements in this direction: after the Oil & Money Conference in London, analyst Jeff Currie said in an interview with CNBC that there was a risk of 20 dollars per barrel. And that as soon as every oil tank, every stock on the planet is full – and as soon as there is no more free storage capacity.

A bull market is also possible

But the dead live longer: the price of oil could of course escape the threat of Armageddon. If a wave of bankruptcies at small US companies eliminates the oversupply on the American market. And if China and the USA do agree on a customs deal. And if the world doesn’t slide into a recession after all. And if OPEC and its allies cut production quotas.
And especially when war breaks out in the Middle East. Here’s a little factlet: In view of the threat from Iran, there is currently a thaw between some Arab states and Israel. While most Islamic countries are still adhering to the racist practice of rejecting every entry with an Israeli stamp in their passports, this time an Israeli representative took part in the conference Working Group on Maritime and Aviation Security in Bahrain, as reported by the Times of Israel. Let’s see what happens here. Currently, Israel has diplomatic relations with only two Arab states – Egypt and Jordan. But the same interests as Saudi Arabia exist in view of the danger of an Iranian atomic bomb. When the powder keg explodes, the price of oil rises.
The Bernstein Bank also keeps an eye on this asset for you – and wishes you successful investments in oil when you trade CFDs.

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.

31.10.2019 – Daily Report. The Fed has delivered as expected – the markets are applauding first. The S&P 500 once again reaches a record high. The DAX climbs moderately at the beginning of Thursday. Then, however, hopes for the China-USA customs treaty will be dampened.

The DAX slips

That’s how fast it can go: At first, the DAX climbed slightly. Shortly after 10:00 a.m., however, Germany’s leading index fell sharply, with the DAX losing 0.6 percent to 12,827 points most recently. Yuan and US futures also fell.

Hope shattered

Bloomberg reported that leading Chinese officials see a chance for a customs deal close to zero. The US demands for structural changes are simply unacceptable. Beijing also demanded a commitment from the US to withdraw all existing tariffs in Phase 2 for the signing of Phase 1 and also to cancel the next tariff round planned for December.

China calms its nerves first

The day before, according to CNBC, the Chinese Ministry of Commerce had announced that both sides wanted to call on Friday. The communication of both trade delegations continued and there was good progress – both sides continued to work on the agreed timetable. And this despite the fact that Chile just cancelled the APEC summit in November, at which phase 1 was to be signed.
In addition, Washington was accommodating Beijing: Finance Minister Steven Mnuchin told Reuters news agency in Saudi Arabia that it would take some time for China to boost its agro-purchases in the US to the promised $40-50 billion a year. Our assumption: If China ever makes a clear commitment to buy, the futures on lean hog and soya should pick up strongly. The stock market has not yet responded to the news, and the Chinese CSI-300 set a moderate 0.1 percent back to 3,887 points in the morning.

As expected, the Fed delivers

The evening before, the Federal Reserve had met the expectations of brokers. Due to the economic slowdown in the USA, the Federal Reserve lowered the key interest rate for the third time in a row. The gentlemen of the money cut the key monetary policy rate by a further quarter point to the new range of 1.5 to 1.75 percent. Now the Fed signaled a pause. According to Fed Chairman Jerome Powell, things are now moving in the right direction. It remains to be seen how the tariff dispute between China and the USA will develop.

Japan remains true to itself

Meanwhile, as expected, the Bank of Japan has left its interest rate policy unchanged. The target for the short-term interest rate remained at minus 0.1 per cent. The currency watchdogs reaffirmed their promise to keep the yield on ten-year government bonds around zero percent. However, the BoJ signaled its willingness to cut interest rates further if necessary. In the event of global economic risks, the fragile recovery in Japan is to be supported. The Nikkei gained 0.4 percent to 22,927 points in the morning.

US stock markets on the upswing

After the rate cut, US equities gained on Wednesday. The Dow Jones Industrial rose by 0.4 percent to 27,187, its highest level since mid-September. The Nasdaq 100 gained 0.4 percent to 8,083 points. Both stock market barometers lurk just below their all-time highs. And in terms of chart analysis, another note: both Nasdaq 100 and Nasdaq Composite have now closed their recently cracked small price gap again. The S&P 500 closed yesterday by 0.3 percent to 3,047 points at a new closing record.

The end of the dollar is approaching

There’s still a sideways view of the Greenback. The so far unknown expert Anne Korin from the also unknown Thinktank Institute fort he Analysis of Global Security has warned in an interview with CNBC against the end of the dollar as a global reserve currency. A club of very powerful countries is working at the end of this status – China, Russia and also the European Union. An important reason for this is US jurisdiction: anyone paying in US dollars or doing business with American banks may fall under American jurisdiction. And as the Iran case has shown, this could have consequences. A warning signal would be oil contracts in Chinese currency – Petro-Yuan. Those who believe the lady will position themselves short in the Greenback in the long run. And he might consider long positions in the renminbi.

This is what the day brings

Thursday brings some interesting economic data, see here:Market Mover
At 1:30pm the first weekly applications for unemployment benefits will be received in the USA.
At the same time, the data on personal income and consumption in September will be available on the tickers.
The Chicago purchasing managers’ index for October is then reported at 2:45pm.

The Bernstein Bank wishes successful trades!

Important Notes on This Publication:

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

The interest rate decision and FOMC press conference did not cause much volatility on the markets. The forecasts of the analysts proved true, Fed cut interest rate to 1.75%. Q3 GDP in the United States turned out disappointing; it grew just 1.9% since the beginning of the year. Markets were ready for the decision at some point and played out the result in advance.

USD/JPY Daily-Chart

Major US stock indices closed at their highs today. Most of US companies have already reported their profits, and Fed’s decision was quite predictable. Cut of interest rate third time in a row tells us about stability in US economy and a calm end of the year. Usually Fed prefers not to make any harsh statements before Christmas.

EURUSD

EUR/USD pair dropped after Fed announced the cut of the interest rate to 1.75%, but it recovered shortly after. Brexit and snap election on December 12 don’t give Europe much time to relax. Fundamental data on October Consumer Price Index expected on Thursday.

GOLD

Gold price declines after fundamental news from the United States came out. Selling safe haven assets was very much predictable. Appetite for risk makes investors going into more profitable assets. As both week and month coming to an end, some traders will fix their position and exit the trades.

INDICES

World indices were trading mixed amid disturbing news on China’s reluctant fulfillment of the US requirements on purchasing US agricultural products, and also upcoming FOMC press conference. All Wednesday’s news will be played out on Thursday.

What’s next?

08.30 Bank of Japan Press Conference
12.00 EU Consumer Price Index in October
14.30 Initial Jobless Claims in October, US

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 market is focusing on US companies reporting again. Over 78% from 204 companies in the S&P500 reported on profits exceeding expectations. Based on the excellent reports of Pfizer and Merck, large pharmaceutical companies, S&P500 hits new highs. Market mood brightens on today’s Fed interest rate decision.

S&P500 Daily-Chart

Asian markets are trading mixed on Tuesday amid expectations of the news on the trade deal between US and China. Nikkei closes 0.5% higher and is actually trading on its yearly highs. Hong Kong Hang Seng Index fells 0.4% during the trading session. Korea Stock Exchange KOSPI Index fells 0.4% and Chinese Shanghai Composite Index ends lower than others and closes 0.6% lower than the previous day.

EURUSD

Nothing is happening on EUR/USD market second day in a row. There is practically no news. Market ignored Donald Trump’s yesterday speech on trade deal with China, as well as the other fundamental data. The traders are waiting for Fed’s decision on Wednesday. Most probably volatility will remain weak until important news come out.

GOLD

Gold is under pressure on Tuesday and hits a new week low mark of $1483,7 per ounce. During US session the price moved away from lows and was trading on $1490 mark. The Labour Party supported the call for snap election in the United Kingdom, it eased the concerns on inconclusive Brexit. In this case investors preferred to quit gold safe haven assets.

INDICES

Many major world indices retain positive dynamics. Optimistic mood coming from the US is fueling investors and creates space for risk. The mood of investors will very much depend on the fundamental news which will point the direction for the next few weeks.

What’s next?

15.30 Q3 GDP in the US
16.00 Bank of Canada Interest Rate Decision
20.00 Fed Interest Rate Decision
20.00 FOMC Statement

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.

29.10.2019 – Daily Report. The bulls on the Frankfurt Stock Exchange are taking a breather. This is understandable after the constant annual highs. After the all-time high of the S&P 500 the night before, the Federal Reserve is now the focus of attention. Anything other than a rate cut would be a disappointment. The British pound also remains exciting.

Take a breather in Frankfurt

Investors in Frankfurt initially held back in early Tuesday trading. The DAX rose 0.2 percent in the morning to 12,917 points. This is understandable after almost a week of gains. Only yesterday the German benchmark index climbed to a new annual high of 12,986 points. The 13,000 continue to magically attract the indicator.

Trump bull because of China

The day before, Donald Trump had strongly raised stock prices in global trading – and announced the same. He had been wrong about the previous forecast of this kind a few days ago. Yesterday, the US President told journalists about the customs negotiations: “We are ahead of schedule”. The first part of the agreement with China could be signed at the summit in Chile in mid-November. The speculations on the floor are intensifying that Trump definitely wants an agreement so that the stock exchange does not crash – which would jeopardize his chances of being re-elected in 2020. Oh yes, there was something there: only very few people still think the Democrats’ impeachment project is realistic. Let’s wait and see what else comes out.

CSI-300 nevertheless resets

The stock market in China declined despite the progress that had been made. This is probably due to the fact that the USA continues to torture Beijing. In particular, the shares of telecom equipment supplier Huawei lost ground. The US regulatory authority wants to classify Huawei and its rival ZTE as risks to national security. In the People’s Republic of China, the CSI-300 fell 0.4 percent in the morning to 3,910 points. In Tokyo, on the other hand, the Nikkei index retired 0.5 percent stronger at 22,974 points. In the course of trading, the index had passed the 23,000 mark, thus climbing to its highest level for a good year.

New York bull market

The night before, Wall Street had presented a nice bull market. Brokers reported a veritable short squeeze. The Dow Jones gained 0.5 percent to 27,091 points. The Nasdaq Composite climbed 1.0 percent and closed at 8,326 points. Short note on the chart analysis: The high-tech index broke yesterday’s second price gap. The first one is still below 8037 points. The star of the evening was the S&P 500, which closed 0.6 percent higher at 3,039 points. The index thus marked a new all-time high.

Everything is waiting for the Fed

Investors are likely to hold back a little today. Tomorrow, Wednesday, the Federal Reserve will decide on the key interest rate. The majority believes that the Fed will cut the interest rate by 0.25 percentage points in order not to let the economy cool down.

Tension at Sterling

It remains interesting with Sterling. Should Prime Minister Boris Johnson prevail with his plans for a new election, the Pound should strengthen strongly. According to all current polls at the ballot box, Labour would receive the receipt for the latest sabotage tactic, which ultimately played into Brussels’ hands and weakened its own country’s negotiating position. Yesterday Johnson initially failed with the new election plan, as a two-thirds majority is required under the existing law, the 2011 Fixed-term Parliaments Act. However, Boris now wants to introduce a new law that could allow new elections by simple majority. If he wins, the constant Brexit disruption manoeuvres in the House of Commons should be a thing of the past.

This is what the day brings

In addition to the entertaining political theatre in the House of Commons, the US accounting season also occupies traders.
In the USA the pending house sales will arrive at 3pm fort he month of September.
At the same time, consumer confidence is to be reported for October.
And as mentioned, the two-day meeting of the Federal Open Market Committee (FOMC) of the US Federal Reserve begins.
As always, you can find the complete overview here: Market Mover

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.

Optimism rising among investors on Donald Trump’s speech on progress in trade deal with China. S&P hit a record high and breaking above an all-time high, trading above 3027, 98 mark set over July.

DAX30 Daily-Chart

The 27 European countries agreed to give the UK a Brexit extension until January 31, 2020. This is a good news for the United Kingdom; there is still enough time to make agreements and solve all the current problems. European markets are closing slightly higher on expectations on the Fed’s interest rates, US GDP and Nonfarm payrolls.

EURUSD

Market was trading sideways on the week’s first trading day. Slow market can develop into volatility storm very quickly. The further direction for EUR/USD pair for the next few weeks depends on the macroeconomic data releasing this week. If the Fed will go on with the “pigeon” rhetoric, probably the bulls will want to test the 1.12 mark this week.

GOLD

Judging on how Gold is trading on $1500 mark, the market traders are foreseeing the Fed’s actions on Wednesday. Most probably, the interest rate will be cut, and that will give support to the price of Gold in the next weeks. It is unlikely that the interest rate cut will be delayed until December, as usually before Christmas holidays the Federal Reserve prefers not to shake the markets with important decisions.

INDICES

The world’s stocks are trading in green zone today thanks to optimism on trade talks between US and China. More than 200 US companies will release reports this week. That will also have an impact on the market. If the reports and the economic news will be positive, we can see new record highs on US market.

What’s next?

16.00 October consumer confidence index, US
16.00 US pending home sales in September

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.

28.10.2019 – Daily Report. The bulls on the Frankfurt stock market are not giving up: Supported by the record hunt on Wall Street, the DAX lurks just under 13,000 points at the start of the week. Once again, hopes of a tariff deal between China and the USA are supported. But the story of the day comes from Bitcoin.

Summit run in Frankfurt

The DAX wants to continue its upward trend: In early trading, Germany’s leading index reached a new annual high of 12,944 points. This had already been the case on Friday at 12,914 points when prices rose after a slow start. However, activity on the trading platform was still manageable at first. Most recently, the DAX gained 0.3 percent to 12,933 points.

Good mood among exporters

German exporters were in a buying mood on Monday. Their mood brightened significantly in October: The index for export expectations rose from minus 5.3 points in September to minus 1.2 points, according to the Munich Ifo Institute. A total of 2300 companies were surveyed. As always, you can find all the data here:Market Mover

Chinese monster move at Bitcoin

Bitcoin caused a sensation: The crypto currency recently crumbled slightly under profit taking and was quoted at 8,468 Euro. It had reached an interim high of 8,897 euros late on Friday – after having been at a low of 6,627 points on Thursday.
And that had happened: Shortly after the opening of Wall Street, the free real-time prices shot up on Friday. In the high, Bitcoin recorded a plus of 40 percent within 24 hours. The market reacted to a message from the Chinese news agency Xinhuanet: President Xi Jinping urged that all the advantages offered by blockchain technology be exploited. This is what happened Friday local time in front of the Politburo of the Communist Party. The Crypto community of course immediately spread the word via Twitter. Interestingly, according to “USA Today”, there has been a crypto ban in China since autumn 2017. Beijing also wants to ban crypto mining in the country. At the same time, however, the Chinese central bank wants to offer its own digital coin, which is swept along the yuan, according to the newspaper. So China is apparently becoming a controlled crypto country.

Always new customs hope

Meanwhile, USDCNY has remained broadly unchanged at 7.0063 lately. This could change soon. Speculation in the media that the US and China are on the verge of concluding a tariff deal was mounting, at least for Phase 1. Edward Laurence of Fox News twittered that he had heard of a positive telephone conversation between negotiators Robert Lighthizer and Steven Mnuchin and Vice Premier Liu He. According to the report, both teams are on the verge of finalising important components. And ZeroHedge reported that Peter Navarro, White House consultant, had indicated that a deal would be signed in November. In addition, US Vice President Mike Pence stressed that America did not want to exclude Beijing from the global economic system. He also accused Beijing of large-scale theft of trade secrets and other unfair trade practices.

Profits in Asia

Nevertheless, the Asian stock market took action. The CSI-300 with the most important Chinese stocks gained 0.8 percent to 3,927 points in the morning. And the Nikkei index climbed to a twelve-month high of 22,896 points. In the end, Japan’s leading index closed up 0.3 percent at 22,867 points. This was the sixth consecutive positive trading day.

Record hunting in New York

The Wall Street stock market also stocked up on shares. The Dow Jones had left trading on Friday with a gain of 0.6 percent at 26,958 points. The Nasdaq 100 rose by 0.8 percent to a final record of 8029 points – supported by Intel and Tesla in particular. The S&P 500 levelled out its old high of 3,026 points in the course of the year and closed with a plus of 0.4 percent to 3,022 points.

The end is near

With all the euphoria, that leaves the warning of an expert. The almost legendary investor Marc Faber referred to the “repocalypse” of 24 September, which had just been averted, when the interbank market in the USA froze and the Federal Reserve had to play the lender of last resort. We had reported on the mysterious event in a special report. Faber judged: The date probably heralded the beginning of the end of the “Unicorn bubble” and the trend to put pension funds in the hands of private investment managers – because there are probably liquidity problems with some equity managers. He added: “WeWork was probably only the first Unicorn to tip over before it went public. Unicorn is the name given to companies that are valued at more than 1 billion dollars before their IPO. All in all, Faber expects turbulence in the market. A liquidity crunch would have a negative impact on all asset prices, some more, others less.

This is what the day brings

Forex traders should continue to keep an eye on the pound in their regular market updates. The EU has agreed to extend the Brexit date until 31 January 2020. The question remains whether Prime Minister Boris Johnson can push through new elections in parliament.
The US trade balance is published at 1:30 pm.
And ECB President Mario Draghi is bid farewell from 3pm. Just like his successor Christine Lagarde, he steps up to the lectern – which could move the euro, bonds and shares.
The Bernstein Bank wishes successful trades!

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