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!
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