04.02.2020 – Daily Report. Investors are taking action again: initially cautiously on Wall Street. Then particularly strong in China. Because the central bank in Beijing is pumping fresh money into the system. And in the morning, the DAX also rises. But nothing has changed in terms of the corona virus.
Frankfurt wants to go up
The leading German index spread optimism: The DAX climbed 1.1 percent to 13,186 points on Tuesday afternoon. The price indicator received tailwind from the American futures on Dow Jones and S&P 500, which climbed by 1.1 percent.
US futures bet on Trump
As a reason for the rise in futures, the financial site “Marketwatch” quoted the investor/TV presenter Jim Cramer, who is well known in the USA and who explains the stock exchange in an entertaining way with his show “Mad Money”. Cramer tweeted that the contracts were rising because in 48 hours the impeachment would be over and because the Democrats in Iowa are in chaos during the primary election. And even the left-wing “Politico” added that five Dems could vote with the Reps for an acquittal in the impeachment. Oops…
Corona continues to rage
Meanwhile, the threat from China has not changed: The number of confirmed infections and deaths in China has once again skyrocketed. By Tuesday, more than 20,000 cases had been confirmed – over 3,000 more than the day before. The number of deaths increased by 64 to 425. This is the largest increase in infections and deaths in a single day to date.
Asia is still growing
Investors in Asia nevertheless took up equities. The Chinese CSI-300 made a nice profit of 2.6 percent to 3,785 digits. The Chinese central bank is pumping an additional 400 billion yuan net (around 51 billion euros) into the financial market via repo transactions. A signal that the market interpreted as determination. The Nikkei gained around 0.5 per cent to 23,084 jobs.
Profits in New York
The evening before, Wall Street had already posted a plus – supported by the ISM purchasing managers’ index. The Dow Jones Index rose by 0.5 percent to 28,400 points. The S&P 500 advanced by 0.7 percent to 3,249 points. And the Nasdaq 100 gained 1.5 percent to 9,126 points. The Tesla share caused a sensation with a jump in price of around one fifth.
Determination in OPEC+
Oil prices rose: WTI rose 1.9 percent to $51.08. And Brent rose 1.1 percent to 55.07 dollars. A nice countermovement: Last night, crude oil prices fell to their lowest level in just over a year. Crude from the USA cost less than USD 50 for the first time since January 2019.
In view of the dent in demand in China, the oil sheikhs and their allies apparently want to act: Experts are scheduled to meet in Vienna today and tomorrow. The market is rumoring of drastic production cuts. The “Wall Street Journal”, for example, reported that one scenario would involve a cut of 500,000 barrels per day; a second scenario would even involve a reduction in output of 1 million barrels. However, the group is not yet in agreement.
What the day brings
On Tuesday there are only a few important dates on the economic calendar. Market Mover
In the USA, for example, at 04:00pm the order intake for industry in December is reported. Ditto the order for durable goods.
The Bernstein-Bank wishes successful trades!
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