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09.08.2019 – Daily report. After the bloodbath of the last days the wounded bulls look hopefully at the chart technique. The DAX has torn some price gaps in this turbulent week. And they want to be closed. The rebound of yesterday’s Thursday is definitely a whim. If there hadn’t been skepticism on the German stock exchange again on Friday at noon. Italy and China are depressing prices.

DAX hovers above the 200-day line

Who trained the brokers on the Frankfurt stock market? As if they had all attended the same university, they recently looked at chart technology. In textbook terms, the DAX rebounded from the 200-day line yesterday with a solid plus of 1.7 percent. The safety net of the moving average should hold better – the abyss lurks south of 11,640 points. Exactly this mark had tested the DAX on Wednesday and closed on it.

On Friday noon, the German benchmark index moved just above this level. Most recently, the price indicator stood at 11,750 points, albeit with a minus of 0.8 percent. Support was provided by Bayer stock, which at times recorded double-digit gains. The Bayer Group is seeking a settlement with thousands of glyphosate plaintiffs, hopefully removing the ongoing issue from the table.

Escape to safe havens

Coins and bars were in demand on Friday. The gold price levelled off at 1,500 dollars per ounce. German government bonds were also on the shopping list. The Euro-Bund future climbed to 177.40 points in the meantime, the yield on ten-year German government bonds slipped to minus 0.592 percent. Investors are therefore paying the Bundesbank money to ensure that their capital is safe. Is anyone afraid of a bank crash? For example, at Southern European commercial banks that have bought their own government bonds at the behest of their governments? Perhaps even Italian bonds? Not good…

Nervous flutter because of Rome

The nervousness is understandable, because the national crisis in Italy continued to cause excitement. In Rome, after only 14 months, the right-wing alliance of Lega and the five-star movement failed. Interior Minister and Lega leader Matteo Salvini demanded a new election on Thursday. Of course, the Lega is speculating on a mega-success in a new ballot. Because the Italians don’t want to spoil the soup they got from left-wing do-gooders in this country when it comes to the refugee crisis. Strangely enough, open borders in Italy are not seen as enrichment at all, which could perhaps be due to declining internal security. So the Lega’s hard course of isolation is well received. Is that right or sensible? Here it’s worth reading our Special Report on the European elections: The political crack that runs through Europe also has an impact on the financial market.

Foreign exchange traders in euros should definitely keep an eye on the matter: Italy could try to get out of the euro and elegantly clear its debt with a parallel currency. You may remember another special report, this time on the mini-bot issue: Rome could introduce these bonds, which are randomly offered in small denominations just like euro banknotes, nationwide and binding. If Rome explains the default on its euro debts without further ado, then the common currency – and the European stock exchanges – will wiggle along with it. Italian government bonds will then dive down to zero and prepare a party for short traders.

So you see, dear reader: Told you so. We had warned you of both developments at an early stage. The Bernstein Bank won’t leave you alone as a pilot in the shallows of the stock exchange!

Customs dispute continues to slow Asia down

Investors in Asia showed a lack of direction on Friday. In Tokyo, the Nikkei 225 gained about half a percent to 25,685 points. But the CSI-300 recorded a minus of one percent to 3,634 places on Friday. The reason for this reluctance was still the latest damper in the customs dispute. Beijing had announced that it would stop importing US agricultural products for the time being. Actually, the People’s Republic had promised to increase its purchases. Washington now wants to delay its decision to resume business with Huawei.

New York in a buying mood

On Wall Street, investors had accessed on Thursday. As in Frankfurt, the reason for the price gain was good export figures from China. The S&P 500, which is particularly meaningful because it is broad, gained a convincing 1.9 percent to 2,938 points. The technology index Nasdaq 100 even gained 2.3 percent to 7,725 positions. And the Dow Jones Industrial at least recorded a plus of 1.4 percent to 26,378 points at the closing bell. All three indices closed Thursday just below their daily highs.

That’s what the day brings

CFD traders can expect a quiet Friday afternoon apart from the uncertainties of politics. The focus on the trading platform is only on US producer prices for July, which will be released at 14:30.

Bernstein-Bank wishes successful trades and much recovery on the weekend!

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