27.06.2019 – Daily report. New optimism on the stock exchange – News in the trade dispute between China and the USA pushes prices. Investors are putting their concerns about Iran back. US President Donald Trump gave an insight into what a blow to the mullah regime could look like.
Stock market analysts rely on Osaka agreement
Once again, investors on the Frankfurt stock market have bet that an open economic war between China and the United States will still be avoided. By midday, the DAX had gained around 0.6 percent. The star of the day was Bayer stock: the U.S. hedge fund Elliott confirmed its entry into the chemical group. According to initial statements, Bayer could be split up.
But the most important boost for the DAX was an announcement by the South China Morning Post and the U.S. publication Politico. The report, citing insiders, said that Trump had promised to postpone the threatened extension of punitive tariffs to all imports from China for the time being. This step had been the condition of China’s head of state and party Xi Jinping for the planned meeting on Saturday in Osaka, Japan. He added: “Details will be announced by both heads of state before the meeting on the fringes of the G20 summit. Yesterday, US Treasury Secretary Steven Mnuchin had already declared that 90 percent of the journey had been made with China.
Investors in Asia are taking up the offer
The News provided for rising prices in Asia. The Japanese Nikkei 225 climbed by 1.2 percent to 21,338 points. The Chinese CSI-300 gained 1.1 percent to 3,835 points. Wall Street was unable to react yesterday: The Dow Jones Industrial closed almost unchanged at 26,537 points, while the market-wide S&P 500 lost 0.1 percent to 2,914 points. The Nasdaq 100, on the other hand, gained 0.5 percent to 7,627 points.
We note: Should an agreement be reached in the customs dispute, then prices on the world’s stock markets should jump sharply upwards. And if the hopes are disappointed again, things will probably go downhill. Then the DAX, Wall Street and co. will perhaps soon be as turbulent as Bitcoin, which has recently suffered heavy losses. So make sure you can react quickly and professionally via direct market access and an ideal platform for online trading.
How specific is a blow against Iran?
Another exciting topic is Iran. The White House’s plans for a blow are obviously quite concrete. In any case, Trump said in an interview with the Fox Business Network that military action is not about boots on the ground, so ground troops should not be deployed. And a possible conflict would not last very long.
The scenario would probably be the same as in April 2018, when the USA fired over 100 Tomahawk missiles from warships on Syria in retaliation for the use of chemical weapons. “One and done” should be the motto of a fireworks display in the Persian Gulf.
Despite all this, the price of oil fell slightly. For the first time since the end of May, the price had just passed the 66 dollar per barrel mark again. Nervousness in the energy market is likely to persist until the meeting of OPEC and its allies at the beginning of next week – so be sure to keep an eye on your regular market updates. At Moscow’s request, the OPEC meeting was postponed until after the G-20 summit.
This is what the day brings
At 2:30pm the American gross domestic product in the first quarter will initially be shown on the screens. At the same time, the first applications for unemployment benefits are reported. At 10:00pm finally the second part of the US bank stress test is due.
The Bernstein Bank wishes you successful trades!
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