30.08.2019 – Daily report. Now the bulls are doing well again: The latest conciliatory signals from Beijing are boosting prices in global trading. The hard bandages of Donald Trump seem to be having an effect. But only one thing is certain in the looming trade war: volatility is at its limit.
Green prices in Frankfurt
After Thursday’s saturational plus, investors are also taking a cautious approach again on Friday. Germany’s leading index gained around one percent at noon, most recently trading at 12,000 points. The DAX now appears to be sitting stable again on the 200-day line. What happened? Quite simply: The Chinese apparently want to avoid an escalation in the customs dispute.
Beijing signals a turning away
On Thursday, the Chinese Ministry of Commerce raised the white flag a little bit. China will not react immediately to the new tariff increases by the Trump administration, which are due to come into force on September 1, said ministry spokesman Gao Feng. An escalation in the trade dispute would benefit neither China nor the USA. And he continued: Both sides are currently working on the details of new trade talks in September.
In addition, US President Donald Trump said without details that today’s agenda included talks on the subject of trade for the USA and China. New US tariffs on Chinese goods worth 300 billion dollars will come into force on 1 September.
Who feels the pain?
So are we getting closer to an agreement? Perhaps. The customs dispute apparently weighs heavily on the Chinese middle class. The evidence for this thesis is a bizarre footnote: Several lobster fishermen in the US state of Maine reported a slump in lobster exports to China – sometimes US exports to the Middle Kingdom fell by up to 80 percent. However, the Canadians jumped into the gap, even if they did not completely fill it. More importantly, the Pentagon will open up new sources of rare earths in Australia. This means that the USA will be able to exert pressure on the People’s Republic.
Anticipation overseas
So are we going to see an agreement soon? Let us wait and see. The hope of an end to the conflict has boosted overseas courses. The CSI-300 only posted a plus of 0.3 percent to around 3,800 points. However, the Nikkei finished trading on Friday with a gain of 1.2 percent at 20,704 points. In August, the leading index in Japan lost 3.8 percent.
In the USA, the Dow Jones benchmark index rose by 1.3 percent to 26,362 points the previous evening. The broad-based S&P 500 also climbed by 1.3 percent to 2,925 points. The Nasdaq 100 even advanced by 1.5 percent to 7,702 points.
But beware: Dow, S&P 500 and Nasdaq Composite as well as Nasdaq 100 have now torn price gaps that want to be closed.
This is what the day brings
The calendar brings some interesting events, you can find the overview as always here: Market Mover
At 2.30 pm, the data on personal income and consumption in July will first run through the tickers.
Somewhat later, at 3:45pm, the Chicago purchasing managers’ index for August is reported.
Shortly thereafter, consumer confidence for August runs from the University of Michigan via the tickers at 4 pm.
Bernstein-Bank wishes successful trades and a sunny weekend!
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