14.06.2019 – Daily report. Wait and see is the motto at the end of the week. The DAX is crumbling a little. Brokers are suspiciously watching the escalation in the Persian Gulf. Especially as radio silence continues to prevail in the customs dispute between China and the USA. New impulses could come from America in the afternoon. Initially, however, German government bonds and gold were in demand.
Gold on the Rise – Record Low in Federal Yield
Small escape to a safe haven: The price of gold rose to 1,357 dollars per troy ounce. This marked a new annual high for the precious metal. At the same time, ten-year German government bonds were in high demand: the yield fell to minus 0.26 percent and thus to a new record low.
No wonder, given the tensions before Oman. The US military presented a video showing the removal of a dud mine from a tanker by an Iranian speedboat. Apparently traces were to be covered up. This would in fact make Iran responsible for yesterday’s attack on two ships. The situation in the Persian Gulf can escalate at any time by a retaliation strike, CFD traders should not only keep an eye on the news because of the energy prices.
Investors avoid stocks
On the other hand, there was hardly any news on the stock market, and even a look at regular market updates did not provide the stock market in Frankfurt with any new arguments to buy. Until Friday midday, the DAX recorded a minus of 0.7 percent. Infineon maintained its position at the end of the index. Investors blamed competitor Broadcom for the losses. On Thursday evening, the US company lowered its revenue forecast for 2019 from 24.5 billion dollars to 22.5 billion dollars. The main reason was the threat of a trade war between the USA and China, which depressed demand.
Uprising of cheap suppliers
China and the USA at all. The bulls among investors hope for a breakthrough in the tariff dispute at the G20 summit in Japan at the end of the month, but don’t really believe so themselves.
Meanwhile, an open letter from more than 500 American companies to the White House caused a bit of a stir on the floor. The Tariffs hurt the Heartland merger warned of “negative consequences for the economy as a whole” because of the threat of a trade war. The initiative includes wholesalers and retailers Walmart, Costco and Target, as well as textile companies Gap, Levi Strauss and Foot Locker. Why these companies cannot switch to other suppliers from Asia, Central America or Europe is a mystery. The Chinese products on offer are not space technology and can therefore be replaced quickly and easily.
Especially since the U.S. labor market would be happy about new jobs – America is currently experiencing an explosion of homelessness, especially in the so-called Sanctuary Citys, cities that do not deport illegal migrants. With the open-door policy, traditionally left-wing ticking states like California have scored an own goal. Los Angeles is now showing slum tendencies in some parts of the city.
Whatever. As the Japanese stock market picked up, Chinese brokers ducked away – new major demonstrations are expected in Hong Kong over the weekend. The Nikkei gained 0.4 percent to 21,117 points. The Chinese CSI 300, on the other hand, lost 0.8 percent to 3,655 points.
Wall Street performs well
Wall Street was more robust the night before and was supported by the hope of a rate cut. The Dow Jones Industrial gained 0.4 percent to 26,107 points. The S&P 500 also rose by 0.4 percent to 2,892 points. The Nasdaq 100 rose by 0.5 percent to 7,511 points.
That’s what the day brings
At the end of the week, investors expect another round of potentially price moving data. First, at 2:30pm U.S. retail sales in May will run through the tickers.
At 3:15pm is followed by US industrial production and capacity utilization for May and US inventories for April at 4:00pm. At the same time the index of consumer sentiment of the University of Michigan in June (1st survey) should cause a stir.
Bernstein Bank wishes you successful trades!
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