25.09.2019 – Daily report. The bears have taken power on the Frankfurt stage. On the one hand, global trade had to deal with the official initiation of an impeachment trial by the Democrats against US President Donald Trump. On the other hand, The Donald unexpectedly raged harshly against the People’s Republic of China. A deal in the customs dispute is apparently a long way off.
German industry disappointed
The German stock market is going downhill: the DAX fell 1 percent in early trading to 12,184 points. At first, the German industry caused scepticism with new, negative data. The industry’s export expectations fell in September by 2.9 points to minus 5.2 points, according to the Ifo Institute. This means that the mood among German exporters has not been as bad as it has been since the 2009 financial crisis. As always, you can find all the information here: Market Mover
Democrats start trump impeachment
In addition, the stock market participants pondered the latest political developments in Washington D.C. – we have already summarized the possible effects for you in a special report. The US Democrats yesterday announced the initiation of a House of Representatives impeachment procedure against Trump. The latest trigger for this was the alleged abuse of power by Donald Trump – who is said to have urged Ukraine to initiate corruption investigations against the family of the democratic challenger Joe Biden. This should at least increase the uncertainty on the world’s stock markets.
Losses in Asia
The possible impeachment also caused restraint on the Asian stock markets: the Chinese CSI-300 fell by 0.8 percent to 3,871 positions. The Nikkei 225 closed in Tokyo with a loss of 0.4 percent at 22,020 points. The Republicans in the Senate could indeed dismiss the case. But the tug-of-war probably has an influence on the US-Chinese trade dispute. Because if the American president has to waste his time with mud battles, he cannot negotiate any deals. Especially since the Communists in Beijing will closely monitor the matter and perhaps wait for a soft successor in the White House to end the customs dispute in the sense of the People’s Republic. This is likely to put a strain on both the Chinese and American economies.
Tirades against China
Trump himself seems to be aware of this, yesterday he didn’t mince his words about Beijing. At the United Nations General Assembly in New York, he once again accused China of unfair trade practices. The list of charges is long: hoped-for reforms not implemented, state subsidies, currency manipulations, technology theft, theft of intellectual property. Trump became even clearer: he hoped for an agreement in the trade dispute, but would not accept a bad agreement for the USA.
Horror in New York
In view of the latest developments, the US stock market officials put on the handbrake the evening before. In addition, the mood of US consumers had cooled off surprisingly significantly in September due to the trade conflict with China. The Dow Jones fell by 0.5 percent to 26,808 points, the S&P 500 lost 0.8 percent to 2,967 points and the Nasdaq 100 fell by 1.4 percent to 7,710 points.
This is what the day brings
Traders in British pounds can look forward to a new act in the Brexit theatre: British MPs will return to parliament today from their forced break after the British Supreme Court declared the break illegal.
At 4pm the US new building sales are scheduled for August.
And at 4:30 pm the crude oil inventory data (week) are reported to the state Energy Information Administration.
The Bernstein Bank wishes successful trades!
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