Summit storm at the stock exchange

By 01/07/2019News


01.07.2019 – Daily report. Buying frenzy on the Frankfurt stock market: The DAX rose strongly at the beginning of the week – and marked a new high for the year with a leap up. The price driver was the G20 summit. And above all the positive signals in the customs dispute that US President Donald Trump sent out after the meeting with China’s head of state Xi Jinping.

DAX marks annual high

Perfect start into the new trading week fort he bulls: almost all DAX prices were in the profit zone on the trading platform. The outlier was only Deutsche Lufthansa, which suffered from a downgrade. But that did not change the general buying mood. By noon, the DAX had risen by around 1.2 per cent. In its high, the leading German index reached the 12,619 mark right at the start of trading. The best mark for the year to date was 12,438 points. The truce between China and the USA mainly fired chip stocks and carmakers.
Let’s pour a little water into the wine in view of the burgeoning euphoria: If the DAX with its current price movement tears an upward gap by the close of trading, you must assume that this gap will be closed at some point. For example, when the joy of an alleged agreement between Beijing and Washington gives way to disappointment as soon as new problems arise. But unlike online stock trading, short investments are no problem for CFD traders.

Trump bull market after G20 summit

The reason for the small course fireworks was the G20 summit that ended in Osaka on Saturday. After his meeting with China’s head of state Xi Jinping, US President Donald Trump spread optimism: The meeting had been excellent. The talks were “even better than expected”. America would continue with China “where we left off”. Trump promised to suspend the threatened extension of punitive tariffs for the time being, thereby meeting a precondition set by China. In return, China is buying more US agricultural products. The US President also loosened the blockade against the Chinese telecoms giant Huawei for the time being, which surprised most investors. The two sides had not met for official negotiations since Washington broke off talks at the beginning of May.
In response to the happy news, futures on Wall Street indices rose. In view of the new risk appetite, investors parted company with gold. It remains to be assumed that government bonds will also soon become a major feast for bears if an agreement is reached. In Australia, for example, last week’s 10-year bond marked a record low in yields of 1.26 percent.

Asian stock markets are taking action

Shareholders on the Asian stock exchanges also reacted with purchases. At the close of trading in Tokyo, the Japanese Nikkei was 2.1 percent higher at 21,730 points. And the Chinese CSI-300 even rose by 2.9 percent to 3,936 points.

Oil in demand again

Oil prices also rose in the energy market, preparing the market for the hoped-for economic stimulus from a possible agreement between China and the USA. In addition, the OPEC states and their allies are today discussing the extension of the production brake. The Israeli military attack on targets in Syria caused additional nervousness – the attack was aimed primarily at Hezbollah, which Iran supported.

Backlog in New York

It remains to be assumed that Wall Street will also gain ground today, Monday. A new record for the Dow is within reach. Investors were still cautious on Friday. The Dow Jones closed the day 0.3 percent higher at 26,599 points. The S&P 500 had advanced by 0.6 percent to 2,941 positions on Friday. And the Nasdaq 100 worked its way up by 0.2 percent to 7,671 points.

This is what the day brings

This afternoon, various economic data are coming into view. At 3:45pm , the Markit Manufacturing Purchasing Managers’ Index for June will be shown in the U.S. (2nd release). Finally at 4:00pm the American ISM Manufacturing Index will follow in June.
At the same time, US construction spending will be reported for May.

The Bernstein Bank wishes successful trades!

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