02.10.2019 – Daily Report. In early Tuesday trading, the DAX rose, then prices crumbled. No wonder before the holiday on Thursday there is a lack of vigour, as many brokers are on holiday. After all, there were hardly any disturbance maneuvers on the news front.
Things are going down
On Wednesday noon, the stock market in Frankfurt mainly pressed the sell button: the DAX slipped 1.2 percent to 12,117 points. Before tomorrow’s stock market pause on German Unification Day, the restraint is not surprising – no one wants to be caught on the wrong foot.
Above all, because the most recent comments by the five leading German economic research institutes caused some pondering – they significantly lowered their economic forecasts for 2019 and 2020. In their autumn report, the researchers forecast economic growth of 0.5 percent for this year. For 2020, they predict a growth in gross domestic product (GDP) of 1.1 percent. In their spring report, the five economic experts had still assumed growth of 0.8 percent for this year and 1.8 percent for 2020.
No wonder the euro recently slipped to its lowest level since spring 2017 as a result of this pessimism – EURUSD reached a low of 1.0879.
Recession signals from the USA
The evening before, the US industry had already sent out crisis signals: The ISM Purchasing Managers’ Index fell to its lowest level since the 2009 economic crisis. The most important reason for this is the ongoing trade dispute between the USA and China. As always, you can find all the data here: Market Mover. The next round of talks between the Middle Kingdom and America will begin on 10 October – this will determine what happens on the stock exchange.
In view of the recession signals, the Japanese stock exchange also weakened: the Nikkei index lost 0.5 percent to 21,772 points. Incidentally, the stock exchange in China will remain closed until 7 October in the course of the festivities surrounding the National Day. Yesterday evening the ISM data had already sent Wall Street south. The Dow Jones Industrial lost 1.3 percent to 26,573 points. The S&P 500 lost 1.2 percent to 2,940 positions. And the Nasdaq 100 slipped by 0.8 percent to 7,684 points.
Deep State versus Trump
Otherwise a look at the Causa Impeachment for your positioning on Wall Street. A new fact has just emerged that supports Trump’s accusations that a coup d’état from the “Deep State”, i.e. from the bureaucracy and the security authorities, is taking place against him. The “Epoch Times” reported that only the Office of the Intelligence Community Inspector General (ICIG) had cleared the way for an impeachment investigation. Because at some point between 17 May 2018 and 24 September 2019, the requirement in the “Urgent Concern Disclosure Form” was deleted, according to which an informant must necessarily have direct, personally experienced information for his complaint – and since then he can rely on hearsay. What the current whistleblower has also done in Ukraine.
In addition, a recording that raises the question of the Democrats’ prospects of success – they themselves have a lot of dirt on their hands, which the voters in the USA are unlikely to have missed:
Here former Vice President Joe Biden boasts to the Council on Foreign Relations that he once forced Ukraine to fire Prosecutor Viktor Shokin. Biden senior threatened to withhold $1 billion in loans, which would have driven Ukraine into bankruptcy. Shokin had, among other things, investigated the gas company Burisma for corruption. There, son Hunter Biden earned 50,000 dollars a month.
Last chance for Brexit deal
Meanwhile, the Brexit issue is becoming interesting again and so is the British pound. Prime Minister Boris Johnson will present his final offer to the European Union today, Wednesday. If the European Union rejects the proposal, Johnson wants to push through the No-Deal-Brexit by 31 October.
That brings the day
The appointment calendar is otherwise rather sparsely filled on this Wednesday.
In the USA the ADP employment report arrives at 2:15pm.
Furthermore, the European Central Bank will present its report on the bond purchase program at 3:35pm.
At 4:30pm the weekly US crude oil inventory data are reported to the state Energy Information Administration.
The Bernstein Bank wishes you successful trades!
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