24.05.2019 – Daily report. The stock market bulls have taken over the floor again: The Frankfurt stock market presented itself firmly on Friday noon. However, the rebound seems somewhat fragile after the disappointing Thursday. Because really solid fundamental news, which underpinned the plus in the DAX, was missing recently.
DAX again above 12,000
With a recent gain of around 0.8 percent, Germany’s leading index returned above the 12,000 mark. A large part of the counter-movement was probably due to short covers. Because there was little news about the China-USA customs dispute. US President Donald Trump had announced on Thursday that the dispute over Huawei could be resolved within the framework of a trade agreement with China. At the same time, however, he described the telecom supplier as “very dangerous”. There was silence about the Iran crisis. There was movement in Brexit: British Prime Minister Theresa May announced her resignation on June 7. But what should the way out of the impasse look like?
Wall Street in the red
The fact that investors in New York had increased their access towards the end of trading on the eve of the trading day did, after all, lead to cautious optimism in Frankfurt. Nevertheless, the bottom line remained a loss for the important US indices. The Dow Jones fell by 1.1 percent to 25,490 points. The S&P 500 lost 1.2 percent to 2,822 points, and the Nasdaq 100 fell to its lowest level in two months, saying goodbye 1.5 percent weaker at 7,308 points.
Wisps of light in no-man’s-land
And so we take another brief look at some basics of chart analysis: Yesterday, Thursday, the DAX closed exactly on the 200-day line. Even more interesting is the situation on Wall Street, where chart technology provides vivid examples of investors’ indecision. We recently pointed out to you in a special report that the important indices are currently oscillating between bullishness and bearishness in no-man’s-land. And look: Yesterday the Dow Jones closed on the 200-day line. The S&P 500 hangs between the 50-day and 200-day lines, the same as the Nasdaq Composite and the Nasdaq 100. So the indicators are caught between the two moving averages.
Asia at a loss – Treasuries in demand
Asia also felt the effects of helplessness. On Friday, the Nikkei lost 0.2 percent to 21,117 points. However, the Hang Seng gained 0.3 percent to 27,354. As so often when the direction is unclear, investors first parked their money in a safe haven: US Treasuries were in strong demand. Ten-year government bonds rose to their highest level since autumn 2017, with yields falling to 2.3 percent.
Oil price rebound
In line with the DAX, the price of oil also rose again somewhat. On Thursday, the price for West Texas Intermediate fell below the 60 dollar mark for the first time since the end of March. US reserves had risen to their highest level since mid-2017. In addition, a trade war between China and America is likely to stifle demand – the People’s Republic is the world’s largest oil importer.
This is what the day brings
Friday is likely to be an outdated model for stock market traders: Except for the US Order Intake for Durable Goods at 14:30 in April, there are no important dates to come.
The Bernstein-Bank wishes you successful trades and a relaxing weekend!
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