28/02/2019 – 12:00: The German stock market players are also initially spiritless on todays start of German carnival. The DAX recently oscillated once again just below the 11,500 mark in the minus. As an argument for the lethargy, on Thursday stock market participants used the failed summit between the USA and North Korea. This, along with a harsh economic warning from China, led to sales on the Asian stock exchanges in particular. Wall Street, too, had previously presented itself in a mixed state – the bulls are waiting for execution in the US customs dispute with China.
Zalando Fires a Rocket
In early trading hours, the German leading index lost up to 0.6 percent to 11.416 points, but at least it worked its way up again. Only Zalando in the third stock exchange league spread a little party mood. The share price rose by 17 percent, while the online fashion retailer performed surprisingly well in the final quarter of 2018. The Berlin-based company reported the strongest quarter-on-quarter growth in active customers in five years. Good news for the share price, which was highly volatile last year.
North Korea is Now Important Alongside China
The disappointment in Frankfurt was also caused by the summit between US President Donald Trump and the North Korean ruler Kim Jong Un – Trump left the meeting in Vietnam with the comment that sometimes you just have to leave. There was no result, not even a planned joint declaration.
China was again the focus of investors: US chief negotiator Robert Lighthizer dampened hopes of a quick settlement. He wants to ensure that this time the People’s Republic adheres to the agreements it has reached. The trade dispute could not be resolved by import promises from Beijing for US goods alone. In addition, American media speculated about possible differences of opinion between Trump and Lighthizer.
Poor Economic Figures from Beijing
The Chinese Purchasing Managers Index shows that an agreement between Washington and Beijing would urgently be needed: In February, the PMI fell to 49.2 points, its lowest level since the beginning of 2016. In December, this important leading indicator in the world’s second largest economy fell below the critical threshold of 50 points for the first time in two years, suggesting a contraction in industrial activity.
The Pound is Rising
The traders also looked at the British pound, which had recently made up ground due to a possible Brexit shift. Prime Minister Theresa May paved the way for a postponement of the EU withdrawal if the treaty does not find a majority. This would prevent chaos on 29 March, but the hanging game would continue.
Fed on Hold
For the dollar, Fed Chairman Jerome Powell initially provided no impetus. At his half-yearly hearing before the US Senate Banking Committee, he was hesitant. The reasons were weaker economic data and increased uncertainty. In other words, no interest rate hikes are planned for the time being, but they are possible. In view of the cooling global economy, most analysts currently see this as rather unlikely.
And what else is happening on Wednesday? First, Fed Chairman Powell will address Congress once again. At 4 p.m. German time, the EU Business and Consumer Surveys are scheduled, which should have an influence on shares from the EuroStoxx 50 and the Euro.
Asia Stock Exchanges in Bad Mood
Too much disappointment is leading to mental wounds. As result prices on the Asian stock markets have been falling for the time being. In China, the CSI 300 index with the 300 blue chips of mainland China fell by 0.3 percent to 3669 points. In Tokyo, the Nikkei index lost 0.8 percent to 21,385 points. However, the South Korean Kospi recorded the strongest losses with minus 1.8 percent to 2195 points.
Missing Support from New York
The day before, Wall Street had already delivered no real arguments for purchase. The Dow Jones index closed Wednesday 0.3 percent lower at 25.985 points; after all, it had made up some ground during the trading session. The market-wide S&P 500 lost 0.1 percent to 2.792 points. Only the Nasdaq Composite rose by 0.1 percent to 7.554 points.
On a day without really important planned events the hope for good economic data from the USA remains: The gross domestic product is announced for today’s Thursday at 1.30 p.m. – at the moment the calendars are all a little mixed up because of the US shutdown – becomes interesting for Wall Street and the dollar. We wish you every success with your trades!
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