11.09.2019 – Daily report. The bulls don’t give up control of the German stock exchange. In the middle of the week, signals of easing tensions from China in the customs dispute with the USA are giving rise to new optimism. CFD traders, who are active in the energy market, are also looking forward to the latest events in the oil sector – a lot is happening here.
The DAX climbs upwards
The recovery on the Frankfurt stock market continues: In early Wednesday’s trading, the German benchmark index gained 0.8 percent to 12,372 points. Yesterday, Tuesday, the DAX had made a U-turn, offset its losses and closed in positive territory. Despite the European Central Bank’s forthcoming intervention tomorrow, investors took up again. Many brokers, like the German Institute for Economic Research (DIW), also hoped for government stimuli. The DIW has called for a multi-billion government investment program to prevent a possible recession in Germany. The state should pay out 30 billion euros in additional public investments over 15 years.
Beijing signals willingness to negotiate
Beijing also sent a gesture of good will to Washington in the customs dispute. China presented a list of 16 US products to be exempted from punitive tariffs. These include medicines for cancer, medical equipment and chemicals. The state newspaper “Global Times” spoke of a “gesture of goodwill” in the trade dispute before both sides resume negotiations at the beginning of October. Hu Xijin, the editor-in-chief of the Times, who is well connected with the communist power apparatus, twittered that China was doing this to mitigate the negative consequences of a trade war, and that the decision would benefit both companies from the People’s Republic and the USA. The “South China Morning Post”, which is also close to the state, added that the exceptions should take effect from 17 September.
However, as whey and fish meal are also on the list – both serve as animal feed – the step also proves the need in China, where swine fever is raging and meat prices are skyrocketing. Beijing is also facing the threat of American companies emigrating. The US television channel CNBC reported on a survey conducted by the American Chamber of Commerce in Shanghai. According to the Chamber of Commerce, many US companies fear a collapse in business due to customs duties and want to withdraw from China as quickly as possible. 333 American companies in China were surveyed.
The reaction to the most recent development varied: The Chinese CSI-300 fell by 0.7 percent to 3,930 points. In Tokyo, on the other hand, the Nikkei 225 closed 1 percent higher at 21,598 points.
Late Activity in New York
Investors in New York had only dared to take out cover late the night before. The Dow Jones saved a plus of 0.3 percent to 26,909 points at the closing bell. The S&P 500 closed at 2,979 points, hardly measurable in the profit zone; in contrast, the Nasdaq 100 fell by 0.2 percent to 7,815 positions.
Oil boom signals
There are several factors that currently make oil interesting for CFD traders – volatility is rising here and there are some indications that oil prices might be rising. Initially, prices slipped after US President Donald Trump dismissed National Security Advisor John Bolton. The Super Falcon is regarded as an extreme hardliner towards Iran.
However, the industry is currently discussing an analysis by Raymond James & Associates that the US oil industry is at the end of its productivity road. The production volume is rising much weaker than expected, the investment bank reported. The production rate for the first 30 days of production (IP-30) has increased by up to 40 percent at the beginning of the decade. However, IP-30 fell to 11 percent in 2017, recovered to 15 percent in 2018 and collapsed to 2 percent in the first seven months of 2019, reports Raymond James.
Saudi Arabia could also reduce OPEC production. Many brokers suspect that the Saudis urgently need a higher oil price because of Saudi Aramco’s IPO. Perhaps we are already getting clarity from the current energy conference in Abu Dhabi – so you should keep an eye on the regular market updates on your trading platform. In addition, OPEC’s monthly report will be published today. And further the weekly US crude oil stock data of the national Energy Information Administration (EIA) are lining up at 16.30 o’clock.
This is what the day brings
The US producer prices for August at 4.30 p.m. are the only really date of importance on the agenda. As always, you will find the overview here: Market Mover
The Bernstein Bank wishes you successful trades!
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