Rebound after Black Monday

By 10/03/2020News
Broker Trading

10.03.2020 – Daily Report. This was overdue: Investors on the Frankfurt Stock Exchange are taking action again in early trading on Tuesday. Previously, the DAX had crashed as hard as it last did on September 11, 2001, and investors are now hoping for government money in the USA.

Moderate turnaround in Frankfurt

The bargain hunters are here: some brave ones are getting back into the bombed-out stocks. The DAX climbed 3.4 percent to 10,991 places on Tuesday morning. US futures also rose by a good 4 percent recently.

Trump announces government aid

Tuesday’s new buying mood was supported by US politics: President Donald Trump has announced a larger aid package, he will give details later today. Previously he had informed about possible wage tax relief and loans for small businesses. In addition, there could be help for all those who are paid by the hour – because they are particularly hard hit after a sick leave. There is also help for the troubled US oil industry.

Meanwhile, CNBC reported that Trump plans to meet with leading managers and heads of the seven largest US banks at 3 p.m. East Coast time. Yesterday, the Federal Reserve had urged the banks to accommodate customers who are in arrears with installment payments. We are excited. If you trade CFDs and online stocks, you should keep your trading platform open and keep an eye on the news. By the way, the New York Fed announced that it will make more money available for repo transactions. By the way: Italy also promised state aid of 10 billion euros./p>

Slight recovery in Asia

All of this made for restrained courage in Asia. In China, the CSI-300 rose by 2.1 percent to 4,083 digits on Tuesday. And the Nikkei gained 0.9 percent to 19,867 points.

Biggest crash since 9/11

The German leading index yesterday posted its largest daily loss in almost 20 years. In the end, the DAX plunged by 7.9 percent to 10,625 points on Black Monday. An absolute minus of an incredible 916 points. At the daily low, the DAX had slipped to 10,556 points. This was the highest loss since the attack on the World Trade Center on September 11, 2001. In the end, a double blow from Corona and the price war between OPEC and Russia sent the cops to the boards.

This leaves a critical note: Why didn’t investors celebrate the fall in oil prices? Ultimately, this is the most gigantic economic stimulus package ever for the Western economy. We are sure that this insight will soon be spread on the trading floor.

Slaughter festival in Moscow

The situation is completely different for oil exporters. After the Saudis’ first salvo against Russia in the price war, the Moscow stock exchange went down on its knees, as we had already suspected in yesterday’s Special Report on the new oil war. The Russian RTS index slumped by up to 12.7 percent to 1,055 points on Tuesday morning. Above all, oil and gas stocks were taken to the scaffold. The sell-off was thus much stronger than in Frankfurt or on Wall Street – because the Russian Federation is completely dependent on the revenues from the oil and gas business. The Russian stock exchange remained closed yesterday because of International Women’s Day.

Mega sell-off in New York

Yesterday on Wall Street yesterday should go down in the history books: The Dow Jones Industrial lost more than 2000 points or 7.8 percent to 23,851 points. The worst sell-off for the Dow since the 2008 financial crisis, with the S&P 500 plunging 7.6 percent yesterday to 2,747. Here, too, oil stocks fell to their knees. And the Nasdaq 100 slipped 6.8 percent to 7,948 points. After the early sales panic, share trading was initially interrupted for 15 minutes – the first time since 1997.

What the day brings

The diary does not offer many interesting events on Tuesday, you can find the overview as always here: Market Mover

The Bernstein-Bank wishes successful trades

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. 68% 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.