23.09.2019 – Daily report. Painful weekly start for the bulls on the German stock exchange – Monday initially brings losses. The reason is disappointed hopes in the customs dispute negotiations between China and the USA.
Diving down in Frankfurt
Investors on the German stock exchange initially kept a low profile at the beginning of the week. The DAX slipped by 1.1 percent to 12,326 points by midday. The weak German purchasing managers’ indices caused skepticism; as always, you can find all the data here: Market Mover
Disappointment in customs dispute
Beijing, however, was the main source of sales pressure. Apparently, an agreement in the customs dispute between China and the USA has moved into the distant future. After two days of preparations in Washington for the talks planned for early October, the Chinese delegation spoke of “constructive discussions” on Saturday. However, the delegation cancelled a visit to farmers in Montana and Nebraska. This indicates that the Chinese do not even want to make the promised purchases – especially of soy – a reality.
Meanwhile, an extremely self-confident US President Donald Trump dampened hopes of a quick agreement. He does not necessarily need a trade agreement before the presidential election in November 2020, said POTUS (President of the United States). Trump added on Friday at the press conference with Australian Prime Minister Scott Morrison that he did not want an interim solution – but a complete deal. In addition, it is not enough for the Chinese simply to buy more agricultural products. According to “Politico”, the USA had signalled its willingness – the US government wanted to exempt some Chinese products from punitive tariffs. But it is more likely to be a question of solving supplier problems for US companies.
This looks very much like a volatile hanging game on the stock market that has been prolonged by months. This means that you should keep direct market access open on your trading platform and keep an eye on regular market updates.
Overseas sales
In view of the customs negotiations, investors pressed the sell button. In China, the CSI-300 fell 1.1 percent to 3,891 points. In Japan, there was no trading on Monday due to the early fall holiday. Wall Street also closed in the red on Friday. In addition, the large decline on the futures markets caused turbulence. The Dow Jones Industrial lost 0.6 per cent to 26,935 points – over the course of a week, the minus thus amounted to a good 1 per cent. The S&P 500 lost 0.5 percent to 2,992 points on Friday and the Nasdaq 100 even slipped by 1 percent to 7,824 points.
Futures premiere at Bitcoin
There is a novelty for all Bitcoin traders: Intercontinental Exchange, the owner of the New York Stock Exchange, launched its first futures contract yesterday, which will be paid out in Bitcoin. This initially had little effect on the price of the crypto currency, which fluctuated around 9,950 dollars.
Ukraine disaster for the Democrats
Last but not least, a look at US policy: the Ukraine affair is currently turning into a disaster for the Democrats. Trump apparently did not abuse his power and put pressure on Kiev to publish unpleasant details about the Biden family. At least Ukrainian Foreign Minister Vadym Prystaiko told the publication “Hromadske”. However, now Hunter Biden, the son of the current leading democratic challenger Joe Biden, is coming into focus. According to the New York Times, Hunter is said to have earned up to 50,000 dollars a month from the Burisma gas company – without any experience in Ukraine or the gas industry. This was at the time when Joe Biden was vice president and when the U.S. was successfully exerting pressure to remove the Ukrainian Attorney General who was investigating Burisma at the time. By the way, Hunter had been released from the Navy reserve for cocaine abuse – and he only got there thanks to an exemption without military training.
Why is that interesting if you trade CFDs or are involved in equities online? Quite simply, because Wall Street is only likely to stay in bullseye mode if Trump wins the election. At least that’s what hedge fund legend Leon Cooperman believes. He said at CNBC’s Delivering Alpha conference that if Bernie Sanders or Elizabeth Warren win, it will kick off the next bear market.
This is what the day brings
The calendar brings some interesting events on Monday.
First the Chicago Fed National Activity Index August will be announced at 14.30 hrs.
Then at 15.45 the US Purchasing Managers Indices are due.
At the same time, the European Central Bank will publish its weekly report on the bond purchase program.
Since outgoing ECB President Mario Draghi will also be speaking, it will be interesting to hear about the euro and bonds.
In Germany, the index changes for DAX, MDAX and SDAX come into force.
Bernstein-Bank wishes successful trades!
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