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08.10.2019 – Daily Report. No buying mood in Frankfurt. Scepticism about a solution to the Chinese-American customs dispute is spreading on the floor. The requirements from global trade are mixed – profits in Asia, losses on Wall Street.

Slight minus in Frankfurt

Once again, investors on the Frankfurt Stock Exchange initially showed caution. In early Tuesday trading, the DAX fell by 0.4 percent to 12,050 points. Perhaps the mood will change again – yesterday the trading day for the bulls had ended with profits after a hesitant start. As is so often the case, however, the apparently deadlocked customs dispute between China and the USA is spoiling investor sentiment. Hopes for a solution before the planned resumption of talks in two days’ time are falling.

Scepticism about customs dispute

Traders pointed out that Beijing is apparently increasingly reluctant to enter into a comprehensive trade agreement with the USA. China probably does not want to give up state subsidies or its industrial policy – ergo: the preference of domestic companies remains. Meanwhile Washington fired a shot at the bow: Because of “brutal oppression” of the Muslim minority of the Uighurs, the US has blacklisted 28 Chinese government and trade organisations. This restricts exports to these companies, the US Department of Commerce reported.

Asia defies pessimism

Investors were also suspicious of the situation in Hong Kong, with US President Donald Trump linking the matter to the customs negotiations. Now, for the first time, Hong Kong’s Prime Minister Carrie Lam spoke openly of the possibility of military intervention by the People’s Republic of China, as dw.com reported. At a press conference, she said she could not rule out the possibility that the Chinese military would intervene in the conflict in the Special Administrative Region if the situation continued to escalate in the face of continuing protests. Nevertheless, the Chinese CSI-300 rose by 0.6 percent to 3,838 points after the holiday break. In Tokyo, the Nikkei gained 1.2 percent to 21,621 points. The weaker yen, which improves the chances of Japanese companies on the world market, provided a boost.

Losses in New York

On Wall Street, investors had held back the night before due to the upcoming tariff negotiations. The Dow Jones closed 0.4 percent lower at 26,478 points. The S&P 500 also lost 0.4 percent to 2,939 points. The Nasdaq Composite slipped 0.3 percent to 7,956 points.

New pressure on the Turkish lira

A view of the Turkish lira remains. Here new trouble is looming, because Ankara apparently wants to invade Syria and eliminate the Kurdish resistance. Trump has cleared the way by referring to his voters’ mandate to avoid wars. The USA had done far more than was to be expected, including taking 100 percent of the ISIS caliphate. Now is the time for others to become active in the region.
A war costs money, it will further damage the Turkish economy. And at least Trump threatened in a true Twitter storm of Turkey – he would extinguish the Turkish economy if necessary. Here is a particularly readable quote in full length: “I will totally destroy and obliterate the Economy of Turkey (I’ve done before!)”. So keep an eye on the regular market updates on your trading platform – no chart analysis helps with a war, because then emotions rule.

This is what the day brings

Last but not least, a look at the rather sparsely filled appointment calendar. As always, you will find the overview here: Market Mover
At 2:30pm US producer prices will be reported for September.
And at 7:50pm German time Fed boss Jerome Powell gives a speech in Denver.
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 markets re-opened on a positive note after the weekend. US unemployment data published on Friday showed a lower number of new jobs relative to earlier forecast. This serves as a further sign to the investors that the Fed will lower the interest rate again. High-risk assets went up, while gold, Japanese yen, and Swiss franc all lost a bit.

DAX30 DAILY CHART

After falling down to its lowest point in many months, the EUR/USD has already rebounded by 100 points. Its growth is driven by the widespread opinion that the US and China might reach a compromise in their ongoing trade war. There’s still a week left till the introduction of the planned tariffs on goods worth $250 billion, so there’s still time to reach a solution.
As expected, the price of gold decreased, dragging other precious metals with it. However, bears shouldn’t celebrate too soon. The powerful upward trend, which began in Q2 2019, remains unchanged. In the context of any new or existing political tensions (such as the protests in Iraq), gold can easily set a new record.
The SP500 and DAX charts look very interesting. On Thursday, they rebounded from the very strong support level formed by the daily 200 MA and started moving north again. Chaotic supply has been consumed; there’s every reason to expect a traditional Q4 rally.

What’s going to happen today?

A lot of interesting events are scheduled for Tuesday. First and foremost, we’re waiting for the statements by Governor of the Bank of England Mark Carney and Chair of the Fed Jerome Powell, as well as for the start of the European Central Bank session. Any signs of a continuing easing of the monetary policy are bound to elicit a strong positive reaction from the stock markets.

Important Notes on This Publication:

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

07.10.2019 – Daily Report. Investors on the German stock exchange are once again not taking action: Friday’s US job data was halfway passable – Wall Street pulled in. But the German economy is sending out new warning signals. And China is apparently playing a temporary game in the trade deal with the USA.

The DAX is stagnating

The DAX is simply not making any headway: at the start of the week, the leading index remained unchanged at 12,012 points. The fear of recession persisted on the trading floor: German industrial orders fell unexpectedly sharply in August. Orders fell by 0.6 percent compared to the previous month, as the Federal Statistical Office announced on Monday in Wiesbaden. This was the second consecutive decline and already the fifth setback in the current year. Before the imminent trade dispute with the USA over subsidies for the aircraft industry, this is certainly not a good omen. As always, you will find an overview here: Market Mover

China cools expectations

The mood also deteriorated in the China-USA customs dispute. The news agency Bloomberg reported that the chances of a comprehensive deal, as requested by Washington, had declined. The spectrum of issues China wanted to negotiate had narrowed. In concrete terms, negotiator Liu He wants to bring an offer with him from Thursday, but this does not include a commitment to reforms in Chinese industrial policy or state subsidies, he said, citing unnamed sources. But these are precisely the sticking points for America.
Obviously China has thundered blood: because of the fear of a US recession and the impeachment against Trump the leadership in Beijing could believe that the Americans would make every deal just to report a success. On the other hand, the Chinese leadership is also under pressure from swine fever and exploding meat prices. In addition, the conflict in Hong Kong continues to smoulder. Only on Friday US President Donald Trump told journalists that both sides were at a very important stage. But: “If the deal doesn’t work 100 percent for us, we won’t make it.”
So that gives us three options: either No Deal or Trump breaks. Or Beijing will give in after all. The former should send Wall Street south, the latter a moderate plus. And the third case is likely to send the New York Stock Exchange up a lot.

Asia hesitates

In view of the latest developments, the Japanese Nikkei-225 fell by 0.2 percent to 21,375 points at the start of the week. In the People’s Republic of China, the stock markets remained closed due to the “Golden Week”.

New York wins again

Wall Street had risen on Friday after halfway positive job data in the USA. Unemployment fell to its lowest level in 50 years. Wage growth, however, was not as strong as expected. The Dow Jones Industrial rose by 1.4 percent to 26,574 points and closed just below its daily high. The market-wide S&P 500 also rose by 1.4 percent to 2,952 points. And the Nasdaq 100 climbed 1.5 percent to 7,754 points.

A Second Impeachment Witness

Meanwhile, the team of lawyers representing the first whistleblower conjured up a second witness in the matter of impeachment. His law firm represented several tipsters, said attorney Andrew Bakaj, who once worked for both Hillary Clinton and the Democratic faction leader in the U.S. Senate, Chuck Schumer; Bakaj is also said to have donated for Joe Biden. While number one is said not to have heard Trump’s allegedly scandalous statements about Ukraine and lied about whether he had contact with the Democrats in the House of Representatives before the charges were brought, the second witness is said not to have done so, according to ABC News. Looks like the Democrats will have to underpin their rather weak position. Let’s wait and see.

This is what the day brings

Monday will bring hardly any interesting data that could move stocks, bonds and currencies.
At 1:30pm the ECB’s banking supervisors will speak on banks’ liquidity risks.
This will be followed at 3:45pm by the ECB’s weekly report on the bond purchase programme.
At 7pm German time, Fed Chairman Jerome Powell steps up to the microphone in Salt Lake City.
Finally at 9pm the US consumer loans are due in August.
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.

04.10.2019 – Daily Report. The stock market players on the Frankfurt stock market are initially catching up with the upward movement of the New York Stock Exchange from the previous evening. Then the DAX will also be pulled down. The fear of recession continues to dominate trading. The US job data in the afternoon will now become particularly important. And the latest developments in impeachment against Donald Trump are also really exciting.

Moderate growth in Frankfurt

The DAX fell by 0.2 percent to 11,899 points by Friday midday. On Wednesday, the leading German index slipped below the 12,000 mark for the first time in four weeks due to economic concerns. Gold, on the other hand, was in demand.

Pressure from US economic data

The US economy, in particular, was a source of concern for investors in global trading. After the weak ISM industry index – which fell to a ten-year low – the job report of the service provider ADP was also worse than expected. Thursday’s ISM service sector index was not really robust either. The mood in the US service industry had deteriorated significantly in September, falling to its lowest level for a good three years. As always, you can find an overview here: Market Mover

So the official labour market report is due this Friday afternoon – at 2:30pm Wall Street is holding its breath.

Now the Fed has to fix it

The latest depressing data yesterday supported hopes that the Federal Reserve would intervene. At the next meeting of the Federal Reserve at the end of October, brokers already estimated the chance of further monetary easing at 90 percent. Yesterday the Dow Jones Industrial gained 0.5 percent to 26,201 points. The S&P 500 rose by 0.8 percent to 2,911 points. And the Nasdaq 100 climbed by 1.2 percent to 7,638 points.

Tension in Hong Kong

A customs deal between China and the USA would now be helpful for the cops. Investors were also suspicious of what was happening in Hong Kong. Head of government Carrie Lam imposed a ban on masquerading on Friday, referring to the Emergency Regulations Ordinance of 1922. Nevertheless, Lam stressed that the emergency did not yet apply. Should the unrest be violently suppressed, this could have consequences for the negotiations in the customs dispute between China and the USA, which are to be resumed next week. The Japanese Nikkei-225 closed Friday 0.3 percent higher at 21,410 points. In China, trade continued to pause due to the 70th anniversary of the People’s Republic.

Feudal glove from Trump

In the USA, the impeachment theater is also gradually becoming really interesting. US President Donald Trump called on Beijing to investigate Democrat Joe Biden and his son Hunter in front of cameras. The background: In December 2013 Joe Biden flew with his son Hunter to Beijing for a meeting with the Chinese head of state Xi Jinping. According to Trump, Biden junior used his father’s trip to China to raise 1.5 billion dollars for a fund.

The “New York Post” confirmed this: Less than two weeks after the flight in Air Force Two, the Bank of China is supposed to have the investment vehicle Bohai Harvest RST (BHR) up and running. Founding partner: Rosemont Seneca Partner, the company of Hunter Biden. According to the financial blog ZeroHedge, BHR helped the state-owned Chinese military contractor Aviation Industry Corporation of China to buy the American precision parts manufacturer Henniges in 2015. According to the New York Post, BHR was also an anchor investor in the IPO of China General Nuclear Power Corp. And in April 2016, the US Department of Justice accused it of stealing American nuclear secrets. Which raises the question of national security. Or even after treason under the protection of the highest circles of democrats. Whatever the case, Wall Street will continue to keep a close eye on the impeachment pros and cons – violent upheavals are possible here at any time.

This is what the day brings

As mentioned: At 2:30pm US labour market data for September might have the power to swirl around futures, dollars and US Treasuries.
At the same time, the U.S. trade balance is set to close in August.
At 8pm German time, Fed Chairman Jerome Powell steps up to the microphone at the Fed event “Fed Listens: Perspectives on Maximum Employment and Price Stability” in Washington D.C.. Every half-sentence can also frighten or delight the markets.

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

Important Notes on This Publication:

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

02.10.2019 – Daily Report. In early Tuesday trading, the DAX rose, then prices crumbled. No wonder before the holiday on Thursday there is a lack of vigour, as many brokers are on holiday. After all, there were hardly any disturbance maneuvers on the news front.

Things are going down

On Wednesday noon, the stock market in Frankfurt mainly pressed the sell button: the DAX slipped 1.2 percent to 12,117 points. Before tomorrow’s stock market pause on German Unification Day, the restraint is not surprising – no one wants to be caught on the wrong foot.
Above all, because the most recent comments by the five leading German economic research institutes caused some pondering – they significantly lowered their economic forecasts for 2019 and 2020. In their autumn report, the researchers forecast economic growth of 0.5 percent for this year. For 2020, they predict a growth in gross domestic product (GDP) of 1.1 percent. In their spring report, the five economic experts had still assumed growth of 0.8 percent for this year and 1.8 percent for 2020.
No wonder the euro recently slipped to its lowest level since spring 2017 as a result of this pessimism – EURUSD reached a low of 1.0879.

Recession signals from the USA

The evening before, the US industry had already sent out crisis signals: The ISM Purchasing Managers’ Index fell to its lowest level since the 2009 economic crisis. The most important reason for this is the ongoing trade dispute between the USA and China. As always, you can find all the data here: Market Mover. The next round of talks between the Middle Kingdom and America will begin on 10 October – this will determine what happens on the stock exchange.

Overseas sales

In view of the recession signals, the Japanese stock exchange also weakened: the Nikkei index lost 0.5 percent to 21,772 points. Incidentally, the stock exchange in China will remain closed until 7 October in the course of the festivities surrounding the National Day. Yesterday evening the ISM data had already sent Wall Street south. The Dow Jones Industrial lost 1.3 percent to 26,573 points. The S&P 500 lost 1.2 percent to 2,940 positions. And the Nasdaq 100 slipped by 0.8 percent to 7,684 points.

Deep State versus Trump

Otherwise a look at the Causa Impeachment for your positioning on Wall Street. A new fact has just emerged that supports Trump’s accusations that a coup d’état from the “Deep State”, i.e. from the bureaucracy and the security authorities, is taking place against him. The “Epoch Times” reported that only the Office of the Intelligence Community Inspector General (ICIG) had cleared the way for an impeachment investigation. Because at some point between 17 May 2018 and 24 September 2019, the requirement in the “Urgent Concern Disclosure Form” was deleted, according to which an informant must necessarily have direct, personally experienced information for his complaint – and since then he can rely on hearsay. What the current whistleblower has also done in Ukraine.

In addition, a recording that raises the question of the Democrats’ prospects of success – they themselves have a lot of dirt on their hands, which the voters in the USA are unlikely to have missed:

Here former Vice President Joe Biden boasts to the Council on Foreign Relations that he once forced Ukraine to fire Prosecutor Viktor Shokin. Biden senior threatened to withhold $1 billion in loans, which would have driven Ukraine into bankruptcy. Shokin had, among other things, investigated the gas company Burisma for corruption. There, son Hunter Biden earned 50,000 dollars a month.

Last chance for Brexit deal

Meanwhile, the Brexit issue is becoming interesting again and so is the British pound. Prime Minister Boris Johnson will present his final offer to the European Union today, Wednesday. If the European Union rejects the proposal, Johnson wants to push through the No-Deal-Brexit by 31 October.

That brings the day

The appointment calendar is otherwise rather sparsely filled on this Wednesday.
In the USA the ADP employment report arrives at 2:15pm.
Furthermore, the European Central Bank will present its report on the bond purchase program at 3:35pm.
At 4:30pm the weekly US crude oil inventory data are reported to the state Energy Information Administration.
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.

01.10.2019 – Daily Report. In early Tuesday trading, the DAX rose, then prices crumbled. No wonder before the holiday on Thursday there is a lack of vigour, as many brokers are on holiday. After all, there were hardly any disturbance maneuvers on the news front.

The DAX crumbles

Everything is quite calm at the Frankfurt Stock Exchange. The DAX recently held its ground at 12,418 points, down 0.1 percent. Two days before German Unification Day, the trading volume of German equities was only at a low level. The US futures were trading in positive territory.

Nikkei defies Tankan

In Tokyo, the Nikkei closed 0.6 percent higher at 21,885 points. The customs dispute between China and the USA has meanwhile clouded the mood in Japanese industry due to falling export opportunities to the People’s Republic: the Tankan Report signalled a six-year low in the mood in companies. After all, the assessment is not as bad as many analysts had expected. As always, you can find all the data here: Market Mover

Bond Surprise in Japan

Meanwhile, Japan showed what happens in the bond market when the central bank and large funds hold back on purchases. Futures turned south after the ten-year Japanese government bond auction was worse than it had been in three years. Yields rose across all maturities. Earlier, the Bank of Japan had declared that it was buying potentially fewer domestic bonds in October. The Japanese Government Pension Investment Fund also wants to buy more foreign government bonds in the future. And that is after all the largest pension fund in the world.

Investors look to Hong Kong

The Chinese stock exchanges remained closed due to the national holiday. Investors in Asia watched the situation in Hong Kong intently: demonstrations in the former British crown colony are expected again for the celebrations marking the 70th anniversary of the People’s Republic of China. This is already the 18th week in a row with demonstrations. US President Donald Trump warned China weeks ago of a violent escalation and linked the crisis with the customs dispute.

Up in New York

On the evening before, the US stock exchange had closed in positive territory. And this despite the fact that the mood of companies in the Chicago region had deteriorated considerably. The Dow Jones Industrial closed 0.4 percent higher at 26,917 points. In the month of September, the Dow thus achieved a profit of just under 2 per cent; in the third quarter, the plus was 1.2 per cent. The S&P 500 closed Monday 0.5 percent higher at 2,977 positions. And the Nasdaq 100 climbed 0.9 percent to 7,750 points.
What remains is a brief chart analysis: the Dow has been in a sideways trend between 26,700 and 27,100 points for just over a week now. This makes the index an ideal platform for traders. Because if you trade CFD, then the ups and downs in a relatively narrow trading range with the right positioning will certainly bring a nice return, because even with a small investment you can earn good money with leverage. If you trade stocks online, the sideways movement can be frustrating.

This is what the day brings

Tuesday has some interesting dates in store.
First of all, the Markit Purchasing Managers’ Index for the U.S. is scheduled for September at 3:45pm.
Shortly thereafter at 4pm the ISM Purchasing Managers Index Industry will follow in September.
At the same time, US construction spending for August will be ticked off.
And at 6:30pm ECB President Mario Draghi steps in front of the microphone in Athens.
Last but not least, the weekly US crude oil inventory data from the private American Petroleum Institute will be reported at 10:30pm.
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.

30.09.2019 – Daily Report. The beginning of the week starts with new speculations regarding the China-USA customs dispute. Will Washington curb capital flows to China? Global trade is initially irritated. But a partial denial and a request to speak from the Federal Reserve provide support on the German stock exchange.

Fed Supports US Futures and DAX

Investors in Frankfurt are resisting the current: while the DAX had worked its way up on Friday, Wall Street slipped. Actually, a catch-up downward movement would be due. But the DAX remained unchanged at 12,385 points in early trading.
The US futures also pointed upwards again. One of the reasons: Charles Evans, head of the Federal Reserve Bank of Chicago, told CNBC that he was open about the right level of interest rates in the US (“definitely open minded”). Evans also sits on the Federal Open Market Committee (FOMC), which decides on interest rates.

Threatening US sanction against China shares

In addition, an important stress factor from Friday was partially eliminated over the weekend. According to a report by the news agency Bloomberg, the US government should consider limiting American capital flows to China – American money should not support Chinese companies. One possibility would be to stop listing shares of Chinese companies on American stock exchanges. The news about a possible delisting naturally put Chinese shares on the US financial market such as Alibaba or Baidu under pressure immediately.
In addition, the involvement of American pension funds in Chinese markets could be limited. One way of doing this would be for index operators like MSCI to restructure their indices. For example, the All Countries World Index (ACWI), in which Chinese companies have a share of 3.6 percent according to “Focus” and thus form the fifth largest position. Index operators would then have to sell Chinese shares massively.
One day after the announcement, the US Treasury Department partially denied the matter on Saturday: There were no plans for a delisting of Chinese shares in the USA. Which leaves the part open that the exposure of US investors to Chinese equities could be restricted through funds. Let’s wait and see.

Falling prices despite robust China data

In the light of speculation, the CSI-300 dropped 1 percent in the morning to 3,815 positions. New economic data from China was quite positive. The purchasing managers’ index of the Chinese business magazine “Caixin” – which measures the mood in small and medium-sized companies – rose to its highest level in one and a half years. The government indicator for large, state-owned industrial enterprises also climbed slightly. However, it remained just below the growth threshold. In Japan, industrial production fell in August compared with the previous month. The Nikkei 225 closed 0.6 percent lower at 21,756 points – its lowest level for almost three weeks. As always, you can find all the data here: Market Mover

Losses in New York

On Wall Street, the most recent trade dispute between China and the U.S. described above caused unrest late Friday evening. The Dow Jones turned negative, closing 0.3 percent lower at 26,820 points. The Nasdaq 100 lost 1.2 percent to 7,681 points. The S&P 500 fell 0.6 percent to 2,960 points.

This is what the day brings

The economic calendar is rather clear at the beginning of the week.
In Germany the consumer price index for September runs at 2pm over the ticker.
The ECB weekly report on the bond purchase programme will follow at 3:45pm.
At the same time, the Chicago purchasing managers’ index for September is reported.

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.

30.09.2019 – Special Report. — MystifyingCredit Crunch on the American Interbank Market – the Federal Reserve has intervened. Illiquid commercial banks received fresh short-term capital from the Fed in the past two weeks as a result of a wave of overnight repo transactions. This was exactly the same warning signal as in the financial crisis that raged a good ten years ago. Particularly worrying: even the New York Fed allegedly does not know who or what exactly froze the cash market.

Shrill warning signal from the US financial market

The alarm bells have stopped for the time being. But if you trade CFD or online stocks, then you have to expect a potential crash on Wall Street, in the DAX and especially with American banks and insurance companies. And with a global panic. Which would speak for shorts on indices and long trades in the VIX. Always keep your trading platform open with Germany’s best CFD brokers and keep an eye on regular market updates: The topic can boil up again at any time. Here are the backgrounds to ensure that you are always correctly positioned.

The same symptoms as in the financial crisis

In mid-September, interest rates for short-term loans between banks in the USA suddenly shot up to 10 percent. For the first time since the financial crisis more than ten years ago, the US Federal Reserve had to pump billions of dollars into the money market again. The Fed made a start on 17 September with a short-term transaction of 53.15 billion dollars. Banks borrowed cash from the Fed, depositing government bonds and other securities as collateral.
This was followed by further tenders. With the overnight repo transactions, the Fed first calmed the situation, the credit market seems to have thawed out again. A repo is a repurchase agreement – a seller of an asset agrees to buy it back at a later date at a higher price. According to the financial blog ZeroHedge, the Fed pumped additional capital of around 162 billion dollars into the dried up credit market compared with the usual levels. At the last repo round on Friday, only about 23 billion dollars of 100 billion provided funds were called up. In the meantime, the repo rate fell back to the targeted 2 percent.

Mysterious Repocalypse

The Apocalypse, which was just once again turned away with special replies, has raised questions. The “Manager Magazin” explained the dried-up liquidity of mid-September with, among other things, the quarterly payment of corporate taxes. In addition, banks and other investors settled the purchase of US government bonds worth 78 billion dollars. But even the lead New York Fed must first investigate exactly why banks with free cash reserves refused to lend money in the overnight market. At least that’s what Fed boss John Williams admitted on Friday.
Moreover, according to ZeroHedge, nobody knows exactly which banks were forced to take the stigmatizing step of running to the guardians for fresh money – but the blog suspects American banks. It examined the Fed report on 18 September, the date just before the cash drain began. And according to the Assets and Liabilities of Commercial Banks in the United States, the cash holdings of large domestic banks fell by 55.3 billion to 714.8 billion, the lowest level since April 2013. The cash holdings of small US banks also slipped by 18.2 billion to 272.9 billion dollars. By contrast, the holdings of foreign banks in the USA rose by 13.6 billion to around 538 billion dollars.
Even two weeks ago, “Manager Magazin” stated that the reserves parked by banks with the Fed were as low as they had not been since 2011. They totaled 1.47 trillion dollars, which is about 50 percent less than the peak reached five years ago.

Distrust among banks

But why exactly have the reserves fallen to their lowest level in years? If investors don’t know whether it’s their bank that’s gambling somewhere, then the door opens for a bank run. One thing is clear: if banks no longer lend money to each other, it is because they no longer trust their counterparts and have to reckon with the credit being lost. So the crucial question is which investments have damaged trust so badly.

CLO as a crisis factor

In the background, we assume that the recently booming Collateralized Loan Obligations market will be a major negative factor. CLOs are asset-backed securities. These are synthetic bonds backed by several bundled corporate loans as collateral. Pension funds and insurers in particular like to deposit such corporate bonds because they receive higher interest rates than US Treasuries and because they appreciate the seemingly reliable cash flows. But if the debtors tip over behind the loans because the business model does not support them, then the so-called securities are worthless and so is the asset built on them. The worst that can happen is that the creditor tips over.
We had already warned the CLO of this in a special report weeks ago. These, by the way, are astonishingly similar to collateralized debt obligations, i.e. the assets mostly backed by scrap mortgages that brought Lehman Brothers and Bear Stearns to their knees from 2007 onwards.
Bond Bubble – oil bankruptcies – bad loans
Other possible reasons for the cash drain include the current wave of bankruptcies among small and medium-sized American oil producers, who are being brought to their knees by the low oil price. It is also questionable how many students will ever repay their horrendous loans for their studies. The same applies to shopping on credit. And the above-mentioned issue of government bonds is also a problem. When investors flee into US Treasuries, the Bond Bubble lacks the money for short and medium-term transactions. And if investors are faced with the choice of parking their money with the Fed rather than pumping it into the real economy, then the recession threatens.
However, the fact that both Goldman Sachs and JP Morgan have now expressed the suspicion that the Fed will have to pump additional money into the market from now on via Permanent Open Market Operations speaks in favour of one or more serious long-term issues.
Our conclusion: Perhaps this was the last warning of the new, big crash that is coming from Wall Street and is pulling global trade into the abyss. The speculations alone can throw the financial market wildly back and forth. Because if a clammy investor urgently needs cash, he could quickly sell off large blocks of shares, which would lead to inexplicable movements on the stock market.
Secure yourselves thus absolutely – 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.

27.09.2019 – Daily report. New day, old game: The back and forth in the customs dispute between China and the USA slows down and lifts the mood in global trade. In addition, the Damocles sword of ouster is hovering a little closer above the head of US President Donald Trump following new, albeit expectable, accusations. Nevertheless, the DAX is rising – which is due not only to interesting news about Trump/Ukraine but also to the weak euro.

Slight increase on the German stock exchange

Restrained momentum on the Frankfurt floor before the weekend: the DAX climbed by 0.5 percent to 12,353 points. The German mainstream media were shocked that, according to an anonymous whistleblower, several leading US government officials tried to prevent access to the wording after the telephone conversation between Trump and Ukrainian President Volodymyr Selenskyj at the end of July. Moreover, not everything has been published – it is clear that the Democrats are playing this card in view of the dry transcript. What is true: The matter paralyzes the stock market, which hates nothing more than uncertainty.

Predominantly sceptical overseas

There was also speculation that the Huawei sanctions would be reintroduced. Fortunately for the cops, there were also signs of relaxation from China – Chinese Foreign Minister Wang Yi was optimistic and confirmed that the USA was showing good will. The trade agreement between the USA and Japan also supported the mood somewhat. The Chinese blue chips saw a moderate rise, with the CSI-300 gaining 0.2 percent to 3,850 points. The Nikkei 225 closed with a minus of 0.8 percent at 21,879 points, but this was also due to dividend distributions.
In the USA, the Dow Jones Industrial fell by 0.3 percent to 26,891 points on Thursday due to the new Ukrainian accusations. The S&P 500 fell by 0.2 percent to 2,978 points. The Nasdaq 100 fell by 0.4 percent to 7,772 points.

Impeach yourself

Let’s stick to the Causa Impeachment. The Washington Post was just fair enough to give the floor to conservative commentator Marc Thiessen. And he brought this interesting Document from the US Senate back to light.
Accordingly, 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 that Russia had supported Trump in the 2016 election campaign, which had meanwhile been refuted by the Mueller Report. By the way, Lutsenko followed Viktor Shokin, who according to a report in “The Hill” had been dismissed under pressure from Joe Biden – US Vice President Joe Biden threatened to withhold $1 billion in loans if Shokin did not leave. Official version: Shokin has kidnapped corruption investigations.
Shokin himself told ABC that he was also responsible for investigations against the Burisma Holdings gas company and was therefore dismissed. In Burisma, by the way, son Hunter Biden earned 50,000 dollars a month as a member of the board of directors – although he had previously been released from the US Army reserve for cocaine abuse and had no experience in the gas business or with Ukraine. There are strange coincidences…

Hypocrisy and suppressed news

This raises the question: In view of these backgrounds, how do the democrats intend to justify to their voters that they want to overthrow Trump and de facto paralyse government work with the impeachment hearings? So maybe it doesn’t look as bad for Trump as the media caste of Pharisees likes to portray it. Or have you already read or seen on TV something of the letter quoted above in this country? Let’s wait and see what else comes to light. It is already clear now: If you trade CFDs or shares online, it is important for you that you always analyse the dissenting vote. You can find them here on our website, for example. Only then can you position yourself correctly with your trades.

Euro and Pound in Focus

A look at the currency market remains: Even the weak euro was a reason for the strength of the DAX with its many export-oriented companies. The euro just fell to 1.0905 US dollars at times – the lowest level since May 2017. The reasons: A small run on US Treasuries was recorded due to the Ukraine affair. On the other hand, investors are hoping for a glut of money in Europe. According to the CNBC, something is also happening about the pound: Michael Saunders, chief economist at Citigroup and external advisor to the Bank of England, told managers in Northern Ireland that the British central bank could lower interest rates because of the Brexit uncertainty. Which weighed a little on the pound.

This is what the day brings

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

In the USA it gets interesting at 2:30 pm: Then personal income and consumption are due for August.

In addition, data on new orders for durable goods will arrive simultaneously in August.

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

Important Notes on This Publication:

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