03.04.2019 – Daily report. Once again news from China pushes prices: The DAX reached a new high for the year on Wednesday morning. The good mood in the Chinese service sector was a boost. On the other hand, according to a press report, an agreement in the customs dispute between China and the USA is imminent.
Strong growth in Frankfurt
The German stock market indicator recorded a plus of over 1 percent in early trading and reached a high of 11,925 points. There was especially one article in the “Financial Times” that was applauded by the brokers: According to it, most of the details in the US-Chinese customs dispute have been resolved. The question of how already introduced US customs duties on Chinese products can be lifted remains open. All in all, however, an agreement is in sight. Both sides are on the verge of concluding an agreement. The FT referred to persons familiar with the state of negotiations.
Service sector in China optimistic
In addition, good economic news from China ran over the screens. After the good news from the industry on Monday that had fired hopes of a turnaround in the People’s Republic, the service sector has now started to recover. The Caixin/Markit purchasing manager index for the service sector climbed to 54.4 points. This is the highest level for 14 months. In February, the index had still marked 51.1 points. The index shows growth above 50 points. The managers signaled higher demand both from China and abroad.
Brokers in Asia in buying mood
No wonder, given the good news, that investors in Asia were accessing. Hopes of an economic recovery for the entire region and the entire world meant that cyclical stocks such as shipowners and machine builders were particularly in demand. The Nikkei closed Wednesday up 0.8 percent to 21,676 points, while the Chinese CSI 300 gained 0.4 percent to 3,986 points.
Before the arrival of the China News, Wall Street had presented itself with no clear tendency. Weak orders for durable goods dampened sentiment. The Dow Jones lost 0.3 percent to 26,179 points at the closing bell on Tuesday. The market-wide S&P 500 bid farewell unchanged in percentage terms at 2867 points. However, the Nasdaq 100 reached its highest level in almost six months. Just below its high, it dropped out of the day with a plus of 0.3 per cent at around 7500 points.
This is what the day brings
The question remains as to whether the stock market players in New York will first cash in on the arrival of the final, official message on the customs agreement between China and the USA. Since the deal has received such advance praise, a sell the news would not be unusual.
However, economic news will also move the prices of stocks and bonds. For example, the ADP Labour Market Report for March in the USA is scheduled to be published at 2.15 p.m.; forecast: 221,000.
The ISM Purchasing Managers’ Index for Services in the USA follows at 16:00. Forecast: 58.7.
And finally, at 4.30 p.m., the US crude oil inventory data from the state Energy Information Administration (EIA) will run on the screens. Forecast: a minus of around 3.4 million barrels.
All important scheduled events can be found here: Market Mover
The Bernstein Bank wishes you a very successful day with your trades!
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