Resistance on the stock market

By 29/01/2020News
Resistenz am Aktienmarkt

29.01.2020 – Daily Report. Surprisingly robust, Wall Street has countered the latest setback. And the DAX is also showing resistance to the fear of the corona virus. However, the German leading index is not making much progress. No wonder: the stock market is waiting for the Fed.

Frankfurt swings sideways

Investors on the German stock exchange have let the recent events in China subside for the time being. Encouraged by the strong performance of Wall Street, the DAX recently hovered 0.1 percent higher at 13,333 points. Incidentally, the indicator had caught up exactly on the 50-day line yesterday.
GfK’s Nuremberg-based market researchers brought positive news: the easing of tension in the customs conflict between the USA and China has made German consumers more optimistic about the future. The consumer climate barometer for February rose slightly by 0.2 to 9.9 points. We are curious to see how the events in China will be reflected.

It is probably not over yet

The corona virus is likely to keep investors on tenterhooks for some time yet. Chinese authorities have now reported nearly 6,000 confirmed cases and 132 deaths. Meanwhile, the financial blog ZeroHedge continued a story first published in China by the well-connected Epoch Times, which is affiliated with the Falung Gong movement and has active relations with exiled Chinese.
According to this, there is growing evidence that the Wuhan Institute of Virology is indeed the epicentre of the epidemic. A leading scientist there has researched the spread of deadly diseases such as Ebola, SARS and the corona virus via bats – the animals apparently spread the killer germs without themselves becoming ill. In mid-November last year, the expert is said to have been looking for post-doctoral students via job advertisement. Has this brought inexperienced youngsters into contact with the deadly viruses? In fact, the magazine “Nature” had already quoted experts with safety concerns in 2017. By the way, bats were offered for consumption at the now closed fish and wild animal market in Wuhan. If the speculation is correct, it would raise considerable question marks about the Chinese’ safety skills. And would probably soon be reflected on the stock exchange.
Especially as the question of the efficiency of the quarantine in Wuhan also arises. According to the blog MishTalk, several international flights are scheduled to arrive at Wuhan airport today, including to Paris, Bangkok and San Francisco. We could not verify this after researching fligthstarts.com, but we did find several Chinese domestic flights for Wuhan Tianhe International Airport, in addition to flights to Tokyo and Hong Kong. Among them to the international hub Beijing. We very much hope that the data is out of date.

Nikkei firm – Hang Seng loses

The Nikkei in Tokyo gained 0.7 percent to 23,379 points in the morning. In contrast, the Hang Seng in Hong Kong lost 2.8 percent to 27,161 points. On the Chinese mainland stock exchanges, trading was again suspended due to the Chinese New Year.

Recovery in New York

On Wall Street, the bulls were in charge again yesterday. The Dow Jones Industrial closed up 0.7 percent at 28,723 points. The S&P 500 climbed 1 percent to 3,276. And the Nasdaq 100 rose 1.6 percent to 9,091 points. Strong US economic data, such as orders for durable goods and the mood of US consumers, created a buying mood.
As a result, all major US indices immediately closed the downward gap they had torn the day before yesterday. Is that all there is to it now with the correction? The corona virus is likely to stall some companies, as Apple and Starbucks have already warned.

Oil getting stable

Crude oil broke its recent losing streak and gained about 1 percent. Brent cost USD 59.32 in the morning, while the price of WTI rose to USD 53.99. OPEC and its main allies successfully resisted the bear market: Now the production cutbacks are to be extended until June of this year.

Everyone waits for the Fed

Tonight, the focus is on the Federal Reserve. No one expects the Fed to abandon its loose monetary policy. Most brokers expect the key interest rate to remain unchanged in the range between 1.5 and 1.75 percent. Statements by the Federal Reserve on the US economy are expected from 8 pm German time.
Otherwise, US data on pending home sales in December will be received at 4:00pm.
You find the entire appointment calendar as always here: Market Mover

The Bernstein-Bank wishes successful trades!


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