25.03.2020 – Daily Report. The German leading index is lurking just below the magic mark. Investors in global trading are celebrating the agreement in the gigantic US rescue package. However, the Ifo Institute dampened the buying mood.
New profits in Frankfurt
Prices are soaring: After a brilliant Tuesday, the bull run continues at noon on Wednesday. All prices on the trading platform in the German leading index initially glowed green. The daily high in the DAX was 10,131. Recently, however, prices have been crumbling again, with the index still holding its ground with a plus of 1.6 percent at 9,855 positions. Yesterday, the price indicator had risen 11 percent to 9,701 points. US futures were still up about 1 percent.
Gigantic stimulus in the USA
Politics in the USA has created a buying mood: Republicans and Democrats have agreed on a massive rescue package of 2 trillion dollars, as the Republican majority leader, Mitch McConnell, and the Democratic minority leader in the Senate, Chuck Schumer, told journalists. Now the Senate must vote and the House of Representatives must agree to what could happen this Wednesday.
Gigantic stimulus in the USA
Politics in the USA has created a buying mood: Republicans and Democrats have agreed on a massive rescue package of 2 trillion dollars, as the Republican majority leader, Mitch McConnell, and the Democratic minority leader in the Senate, Chuck Schumer, told journalists. Now the Senate must vote and the House of Representatives must agree to what could happen this Wednesday.
German economy in shock
In Frankfurt, investors recently took profits after the recent recovery. On the other hand, the Ifo-Institute caused a bang on the floor: According to this, the fear of recession triggered by Corona is even greater than expected in the German executive floors. The final business climate index slid from 96.0 points in February to 86.1 points in March. “The German economy is in shock,” commented Ifo President Clemens Fuest. According to Ifo, production losses and costs for the state in Germany will amount to 255 billion to 729 billion euros. Economists expect a slump in economic power especially in the second quarter.
It is not over yet
There was also a small reminder from the Czech Republic for the optimists that Corona is still raging. The head of the crisis team, Roman Prymula, told Czech television that the border could remain closed for two years to prevent a second and third wave of infection from Europe. Our neighbouring country has so far been only slightly affected by the virus.
Course fireworks in Asia
Stock markets in Asia reacted to US policy. In China, the CSI-300 climbed by 3 percent to 3,723 positions. In Tokyo, the Nikkei soared by 8 percent to 19,546 points.
Monster rally in New York
Yesterday, the Dow Jones posted its largest daily percentage gain since 1933 due to the development in Congress. The US leading index rose by 11.4 percent to 20,704 points. The S&P 500 gained 9.4 percent to 2,447 jobs – the biggest percentage gain since October 2008 – and the Nasdaq Composite Index gained 8.1 percent to 7,417 jobs.
On the blog “ValueWalk”, the brokers of gorilla trades referred to the current under the surface, in addition to politics: The number of new 52-week lows on Wall Street has recently decreased. The rally could be more than a “one-day wonder”. But then the experts restricted that it might be too early to call a final bottom for stocks. Well, then…
That’s what the day brings
The diary brings some interesting events for traders, the overview can be found as always here: Market Mover
In the afternoon, the data for incoming orders for capital goods in the USA are due at 1:30pm.
This is followed at 2:00pm by the FHFA house price index
And at 3:30pm the weekly oil report from the US Department of Energy.
The Bernstein Bank wishes successful trades!
Important Notes on This Publication:
The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.