12.07.2019 – Daily report. The DAX is grinding hard. While Wall Street is chasing records in the wake of the recently fueled interest rate fantasy, German equities are making no headway. This is due to various profit warnings in recent days. On Friday, Daimler caused a bad mood.
Even Daimler is in crisis now
On Friday morning, the DAX moved sideways, trading around 0.1 percent lower. All in all, no real fun for investors in online stock trading. In this tough market, it can make sense to prefer CFDs in the short term. In any case, as long as you rely on Germany’s best CFD broker with a Bafin license. No miracle, this stagnation at the stock exchange. The latest news looks very much like a swan song of the domestic economy. Deutsche Bank is building up a bad bank and dismissing a massive number of employees; the pictures remind us of the exit of the Lehman Brothers employees. Then BASF, Krones or Aumann. The German energy companies were almost destroyed by the energy revolution anyway.
And now Daimler. On Friday morning, the car manufacturer reported a weak outlook for the year as a whole. For diesel alone – which was not an issue at all before the greening of the Republic – provisions were increased by 1.6 billion euros. And EBIT is now expected to be “significantly below last year’s level”, after having previously targeted earnings at the previous year’s level. Eco works!
Yet researchers from the Finnish University of Turku, almost simultaneously with scientists from the University of Kobe, have shown that there is virtually no human influence on possible climate change. The fact that the climate is always changing anyway can be seen from the fact that icy Greenland was once grassland – and could therefore be populated by the Vikings.
Asia is in good spirits
And what about the trade dispute between China and the USA? Agony. For example, Trump complained yesterday via Twitter that China is not buying large quantities of products from US farmers. Beijing had actually promised this after the recent ceasefire at the G-20 summit. Nevertheless, the CSI-300 rose by 0.6 percent to 3,809 positions. In Japan, the Nikkei rose by 0.2 percent to 21,686 points.
However, the U.S. was still in a buying mood yesterday. The Dow Jones Industrial passed the 27,000 mark for the first time in its history on Thursday. The high-tech index Nasdaq 100 also reached a new high, and the index is now close to 8,000. The reason: Fed head Jerome Powell has now confirmed hopes of interest rate cuts in the Senate. He told the Banking Committee that a “slightly more cyclical monetary policy” was probably “appropriate”. The lower inflation rate in the USA had already pleased Wall Street before.
However, many investors first took profits, especially as the trump report in the customs dispute provided a small stopper. At the end of trading, the Dow was still trading at 27,088 points with a plus of 0.9 percent. The Nasdaq 100 even suffered a minus of 0.1 percent and closed at 7,897 points. The market-wide S&P 500 lost 2,999.91 jobs with a gain of 0.2 percent.
Crypto no good
Otherwise Trump slowed down the euphoria on Twitter regarding crypto currency. If Facebook and other companies wanted to become a bank, they would need a concession and the same regulation as any other national or international bank. And: “I’m not a fan of Bitcoin and other crypto currencies.” Unregulated cryptosystems could promote illegal activities such as drug trafficking. The only true US currency is the dollar.
Well, if the central banks lower the intrinsic value of money through low interest rates, then people are looking for alternatives that cannot be manipulated. For example gold, silver, land, real estate or even crypto. We are curious whether the various providers will soon be legally stopped, which could dry up the trade and bring joy on the short side.
This is what the day brings
By the weekend, the air in global trade should be out for the time being. Because apart from the US producer prices, which are announced at 2:30pm, there is no really important date on the agenda.
The Bernstein Bank wishes you successful trades and a relaxing weekend!
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.