16.05.2019 – Daily report. The DAX had only just risen – because US President Donald Trump probably wants to postpone threatening import duties for cars from Europe. The cold shower came next: Apparently he expects something in return from the European Union. Exports to the USA are to be capped. The DAX has slightly decreased.
DAX narrowly maintained
Little movement on the trading platform: After the nice gains on Wednesday, the German equities presented themselves somewhat weaker on Thursday. In the morning, the DAX moved just below the 12,100 mark. What is the future for German car stocks? According to the latest media reports, Trump will postpone the decision on punitive tariffs for European cars by up to six months. Actually the decision should have been made at the end of this week. But then the news that a concession is probably tied to conditions.
No clear trend in Asia
The Nikkei had fallen 0.6 percent in the morning to 21,063 points. The Chinese CSI 300 gained 0.5 percent to 3,744 points. Meanwhile, it is becoming clear how China is going to finance its stimuli with which, for example, it is pushing up stagnating car sales: with the sale of American government bonds. China sold $20.5 billion worth of Treasuries in March, the US Department of Commerce announced Wednesday. That was the highest value since October 2016. At the same time, of course, it is one of the means to hit the US in the customs dispute. However, Beijing remains the largest creditor of the USA: the People’s Republic still held bonds worth 1.1 trillion US dollars in March. But if Beijing buys yuan instead, how can the domestic currency be lowered to boost foreign trade? Things remain exciting.
Rising courses in New York
Wall Street was in a buying mood on Wednesday. Prices only turned down after the disappointing US retail data. In the wake of the announcement that Washington apparently does not want any further conflict over car tariffs with Japan and Europe apart from the customs dispute with China, investors resorted to the news. The Dow Jones Index ended the day up 0.5 percent at 25,648 points. The market-wide S&P 500 gained 0.6 percent to 2,850 points. And the Nasdaq Composite gained 1.1 percent to 7,822 points.
Previously, Trump had again exerted pressure on the Federal Reserve. With a little help from the Federal Reserve, economic growth in the United States could be increased to five percent, he said in Louisiana. All it needs is lower interest rates and a “little quantitative easing”.
Escalation in Yemen
Meanwhile, traders in the oil market continue to look forward to the heated situation between Iran and Saudi Arabia. In retaliation for a drone attack on an oil pipeline, the Saudis bombed the Yemeni capital Sanaa, which is controlled by the Huthi rebels. The insurgents are supported by Iran. Among other things, the attacks were directed against arms depots.
Today’s agenda
The afternoon brings some important economic data. At 2.30 p.m. German time the building permits from the USA will be received. The Philadelphia Fed Index is ticking over at this time. Of special importance at the same time are the first applications for unemployment assistance. As always, you will find all dates here: Market Mover
Bernstein Bank wishes you successful trades!
Fresh US data and Brexit launch in London
We are curious to see if the US economic data coming in this afternoon will underpin the renewed optimism. At 2.30 p.m. German time, retail sales will be reported in April, as will the Empire State Index for May, which provides information about the New York region’s economy. At 3.15 p.m. the Federal Reserve will provide figures on industrial production in April, i.e. capacity utilization. The weekly oil report is also due at 4.30 pm.
Traders in the British pound should also note the date for the next act in the exit drama: British Prime Minister Theresa May wants the House of Commons to vote on the Brexit agreement for the fourth time at the beginning of June.
Bernstein Bank wishes successful trades!
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