25.07.2019 – Daily report. Interest gladness or interest frustration? The stock market expects the European Central Bank to lower interest rates. And a significant one at that. And soon, if not immediately. The new records of S&P 500 and Nasdaq 100 are also initially giving a boost. But the Ifo index is dampening the anticipation.
Frankfurt relies on the ECB
The theme of the day on the Frankfurt floor will be the European Central Bank. The DAX initially pulled away to 12,600 points, but then fell again and finally moved sideways again.
Investors hope that the currency guardians will flood the market with cheap money. Not all analysts assume that the deposit rate will be lowered today. A negative interest rate would be a penalty fee for money that commercial banks park at the ECB. But many brokers now estimate the probability that the ECB will lower the deposit rate at more than 50 percent. The scope for disappointment is therefore great.
At any rate, the Ifo Business Climate Index did not provide a clear indication of the ECB’s share price. The sentiment indicator fell slightly in July from 101.8 points to 101.7 points. However, the decline was not as severe as many experts had feared. All economic data can be found here: Market Mover
The Ifo index is therefore worse, but perhaps not bad enough for the ECB. So let’s wait and see how and whether the central bankers will set the euro, bonds and equities in motion. From 1.45 p.m. we know more.
Asia ignores politics
Meanwhile, Asian stock exchange traders looked to Wall Street, where S&P 500 and Nasdaq 100 had closed at an all-time high. In Tokyo, the Nikkei 225 bid farewell 0.2 percent firmer at 21,757 positions. The CSI, which includes 300 blue chips from mainland China, rose 0.8 percent to 3,851 points. Even politics did not stop the buyers: North Korea tested two short-range missiles. In addition, a spokeswoman for the Chinese Ministry of Defence indicated that Beijing could send the People’s Liberation Army to Hong Kong to get the riots under control. In addition, the USA sent a warship to Taiwan.
3000 and 8000 – record hunt in New York
Wall Street had been firmly in the hands of the cops on Wednesday. The White House had confirmed media reports that Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer will meet with their Chinese counterparts next week. So here’s to a new one in the customs dispute with China.
Both S&P 500 and Nasdaq 100 set new records. And magic brands overcame each other: 3,000 on the one hand and 8,000 on the other. The market-wide S&P 500 gained 0.5 percent to 3,020 points. The Nasdaq 100 passed the 8,000 point mark for the first time – it closed with a plus of 0.7 percent at 8,011 points. The Dow Jones lagged due to weak figures and the resulting price losses of Boeing and Caterpillar. At the closing bell, the Dow fell by 0.3 percent to 27,270 points.
He is serious
The pound sterling is likely to remain exciting until 31 October. The new Prime Minister, Boris Johnson, is apparently tackling the Brexit issue resolutely. At least he will take action in the new cabinet: He has mainly filled his new government team with supporters of Brexit. British media described the castling as a “bloodbath”. For example, his rival Jeremy Hunt, the Tory party leader, also fell victim to the new occupation.
This is what the day brings
In addition to the press conference of the European Central Bank at 2.30 p.m., two US data in particular should dominate the day.
At 2.30 p.m. German time, for example, orders for durable goods will be received in June.
At the same time, the first weekly applications for unemployment benefits will be reported.
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.