12.06.2019 – Daily report. German shares reset. Wall Street did not make any headway either. No wonder: In the customs dispute between China and the USA, scepticism is once again spreading. But the People’s Republic has a problem with inflation. And also with industrial production.
The DAX is crumbling
The bulls on Wall Street hadn’t really gotten their act together on Tuesday night. Meanwhile, US Secretary of Commerce Wilbur Ross has dampened hopes that the trade conflict between the US and China will soon ease. Now the Frankfurt stock market is heading south. The DAX has recently posted a minus of around half a percentage point.
Beijing has two problems
Meanwhile, new data from China signal a rise in inflation – in addition to special factors also a logical consequence of the still moderate but noticeable depreciation of the yuan, with which Beijing wants to keep exports going. Consumer prices rose to 2.7 percent in May within a year, as the National Statistics Office announced on Wednesday. The level of consumer inflation is thus the highest in 15 months. In April, the plus was still 2.5 percent. Particularly alarming: year-on-year, food prices for May climbed by 7.7 percent. Fruit prices rose by 14.8 per cent due to weather conditions during this period, pork prices by 18.2 per cent due to African swine fever. And it is precisely in this situation that the purchasing power of the middle class is declining.
In addition, the weak 0.6 percent increase in Chinese producer prices caused scepticism. In the middle of the customs dispute, this was a new signal that the Chinese economic engine is stuttering. All important data can be found here: Market Mover
The Chinese blue chip index CSI 300 responded with a minus of 0.8 percent to 3,691 points. The Nikkei in Tokyo slipped by 0.4 percent to 21,130 points.
Winning streak in New York snaps
The night before, the scepticism was felt on the New York floor. The Dow Jones Industrial returned from early gains and closed the day at 26,049 points, down 0.1 percent. Prior to this, the Dow had closed six consecutive trading days higher. The market-wide S&P 500 fell by hardly noticeable 0.03 percent to 2,886 points. In contrast, the Nasdaq 100 rose moderately by 0.2 percent to 7,514 points. Those who rely on CFD for these minimal changes are lucky – because while online stock trading hardly brings any profit, you can make good profits with Germany’s best CFD brokers thanks to the leverage over trades.
The reason for US investors’ shyness: President Donald Trump poured oil into the smoldering tariff dispute on Tuesday. He said: “We had a deal with China and they retreated. If they don’t come back to this deal, then I have no interest.” China need an agreement. Which the economic data mentioned above seems to confirm.
This is what the day brings
Last but not least, we have a look at the diary. It gets exciting at 2.30 pm, then the US consumer prices for May arrive. At the same time, real incomes are reported for May. And at 4.30 pm the crude oil inventory data will follow from the state Energy Information Administration.
The Bernstein Bank wishes you successful trades!
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