08.07.2019 – Daily report. Good is bad on Wall Street – and therefore also in Frankfurt. The American labor market is currently proving too robust. This lowers hopes of a rate cut by the Federal Reserve. And so the DAX is not making any real headway either.
Scepticism in Frankfurt
Buyers recently lacked the arguments to buy shares. The DAX, for example, moved sideways until noon. Apart from the Fed, Deutsche Bank provided most of the material for discussion. The money house wants to carry out a radical restructuring and cut 18,000 jobs worldwide by 2022, that would be one in five. In addition, the bank will withdraw completely from stock trading and make cuts in bond trading.
There was support for the DAX from the German economy: German exports in May rose by 1.1 percent month-on-month, as the Federal Statistical Office announced on Monday in Wiesbaden. In April, German exports fell by 3.4 percent. But wait – a German economy that is too strong should also slow down the European Central Bank in the event of further interest rate cuts. So good is bad again.
Asia is submerging
The Asian stock markets had already held back in view of the dwindling hope of US interest rates. The Japanese Nikkei recorded a minus of 1 percent to 21,534 points at the close of trading on Monday. Chinese stocks also slipped due to the radio silence in the trade talks between the USA and China. The CSI-300 closed with a minus of 2.3 percent to 3,803 points.
Dampers in New York
Of course, Friday’s surprisingly strong US labour market report also cooled Wall Street’s interest rate euphoria. According to the June report, the US economy created 224,000 jobs in June.
According to the news, the Dow Jones Industrial slipped by up to one percent at times. At the close of trading, however, the minus was only 0.2 percent to 26,992 points. The S&P 500 also fell by 0.2 percent to 2,990 points. The Nasdaq 100 also lost 0.2 percent to 7,841 points. All three indices had climbed to record highs on Wednesday.
Erdogan shoots down the lira
A fine example of politicians sinking their own currency was provided by Turkey. Autocrat Recep Tayyip Erdogan had fired the head of the central bank on Saturday – because interest rates were too high. Murat Cetinkaya has been the head of the central bank since April 2016 and has raised interest rates by a total of 6.25 percentage points to 24 per cent during this time to support the Turkish lira that is crashing. For Erdogan, on the other hand, high key rates were “mother of all evil”. The result: according to the news, the lira has gone into a descent. She had just recovered so nicely.
This is what the day brings
The table for CFD traders is not really rich today.
At best, the Conference Board’s Employment Trend Index could move Wall Street at 4:00pm.
And at 9:00pm consumer credit is due in the USA. That’s it.
The Bernstein Bank wishes successful trades!
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