Recovery is a long time coming

By 25/02/2020News
Stock market graph

25.02.2020 – Daily Report. The day after, the DAX first attempts the rebound. But then it turns negative. At least the US futures are working their way back up moderately. Optimists hope that the huge price gaps torn yesterday will soon be closed.

Slight decline on the Frankfurt Stock Exchange

Initially, green prices on the trading platform were flashing. On Tuesday, some courageous investors picked up again. The DAX rose to 13,132 at the start of trading, but recently the indicator was again 0.3 percent weaker at 13,000.

By the end of yesterday’s trading day, the index had fallen sharply by 4 percent to 13,035 points due to fears of the corona effect on the global economy. At this point we had advised you days ago to invest some of your capital in protective puts or short positions when trading CFDs or online shares.

Huge gaps in the charts

Yesterday the German leading index also ripped a huge gap between 13,501 and 13,247 points. It went down to 12,982 points. The situation is no different for the US indices – sooner or later long chances for courageous bulls lurk here. Because such price gaps are usually closed. The only question is when.

Dow rushes down over 1,000 points

In the USA the serial records of the past weeks are history. The Dow Jones Industrial closed 3.6 percent lower at 27,961 points – its lowest level since mid-December. So one day easily wiped out all annual profits.

The S&P 500 lost 3.4 percent to 3,226 yesterday and the Nasdaq 100 tumbled 3.9 percent to 9,080 yesterday. Dow and S&P posted their largest daily percentage losses in two years. The Nasdaq suffered its worst setback since the end of 2018. Many investors are now hoping for the Federal Reserve. For example, the broker Gorilla Trades reported on the blog “Valuewalk” and bond traders now expect two or even three interest rate cuts.

Asia hopes for the cash injection

It is no different in China: Brokers in the People’s Republic hope for intervention by the central bank. The CSI-300, for example, closed only 0.2 percent down on Tuesday morning at 4,124 points. The Nikkei caught up on yesterday’s sell-off after the holiday and closed 3.3 percent lower at 22,605.

Big address makes cash register at Gold

Interestingly enough, gold, the crisis currency, also received a slight damper yesterday. Most recently, however, the troy ounce again cost 0.3 percent more at $ 1,655. ZeroHedge pointed out that at around 11.30am East Coast time, a small sell-off on the futures began. In total, a good $3 billion was thrown onto the market. The blog blamed the Bank for International Settlements in Basel, posting the picture and contact details of the manager responsible for gold trading.

Hoping for relaxation in the matter of Corona

But was that all with the correction on the stock markets? Everything currently depends on Corona. The spread in Japan and especially in Italy is causing investors to look to the future with concern. In Italy, the first shops have been emptied out, the question is whether fear will soon be rampant in Germany as well. On Tuesday afternoon, Health Minister Jens Spahn (CDU) will meet with his counterparts in Rome to discuss how Covid-19 should be contained. The meeting will be attended by ministers from Italy, Austria, Slovenia, Switzerland, Croatia, France and EU Health Commissioner Stella Kyriakides.

What the day brings

Otherwise, there are only a few price-shifting dates on Tuesday. As always, you will find the overview here: Market Mover
First of all, US consumer confidence in February starts at 16.00.

At 22:30 the weekly crude oil inventory data from the private American Petroleum Institute (API) follow.

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.