In the shadow of the summit

By 28/06/2019News
China vs America

 

28.06.2019 – Daily report. There is currently only one important topic on the Frankfurt Stock Exchange: the G-20 summit. Will Beijing and Washington get closer in the customs dispute? The shareholders hope that this will provide a stimulus for the global economy.

The music plays in Japan

The stock market can be so monotonous: Investors in global trading have watched the incoming news from Osaka with their eyes wide open. Will the US and China make a truce or not? Meanwhile, the first sceptical voices were heard that even a rapprochement between the two largest economies would not only be good for the stock market. Because then the Federal Reserve would probably give up its implied easing of monetary policy.

Whatever the case may be, optimism recently remained in Frankfurt and the DAX climbed by around half a percent by noon. Meanwhile, two domestic issues caused some distraction from the summit meeting. On the one hand, the VW commercial vehicle subsidiary Traton presented a rather moderate stock market debut. On the other hand, Deutsche Bank investors celebrated passing the US stress test.

Wait and see in Asia

In view of the summit, the stock market participants in the Asian market took cover for the time being. In Tokyo, the Nikkei closed 0.3 percent lower at 21,276 points. The Chinese CSI-300 fell 0.2 percent to 3,826 points.

Little impetus from the USA

Investors in the USA also showed little determination on Thursday evening. The Dow Jones closed almost unchanged at 26,526 points. Here, a nosedive of the index heavyweight Boeing pulled the Dow down. In contrast, the S&P 500 gained 0.4 percent to 2,924 points. In contrast, the Nasdaq Composite gained 0.7 percent to 7,967 positions.

Gold remains in demand

The winner of the current general weather situation was gold. In view of the possible easing of monetary policy in the USA and Europe and against the backdrop of an escalation in the Persian Gulf, buyers remained in the market. The troy ounce stood at around 1,414 dollars, just below the six-year high of 1,439 dollars marked by gold at the beginning of the week.

Tension in front of the OPEC meeting

In the case of oil, the tension persisted before the OPEC+ meeting, which is due to begin at the beginning of the week. Most analysts expect new production limits for the second half of 2019. However, the question arises as to whether the cartel and its allies will continue to cut production levels or only extend the current limit. In addition, Moscow had indicated several times in recent weeks that it did not want a higher oil price. Saudi Arabia, on the other hand, urgently needs to fill its state coffers. CFD traders should therefore keep an eye on the regular market updates in this segment.

This is what the day brings

The same applies to investors who invest on Wall Street and in the dollar.
This afternoon at 2pm, personal income and expenses from the USA will arrive in May.
At 3:45pm, the Chicago Purchasing Managers’ Index follows. And at 4pm the University of Michigan reports consumer confidence for June.

The Bernstein Bank wishes successful trades and a sunny weekend without heat stroke!

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.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.