16.07.2019 – Daily report. Is the DAX finally making any headway? On Tuesday, this will depend primarily on new US economic data. And on the figures from major US banks in the balance sheet season. In any case, not even the new Wall Street records recently brought German stocks up.
The DAX hesitates
Monday had finally brought German investors another day of gains for the DAX. On Tuesday, however, the Frankfurt Stock Exchange once again lagged behind in a lack of direction. On Tuesday morning, the leading index remained almost unchanged at just under 12,400 points. Investors first analyzed the ZEW economic index, the exact figures can be found as usual here: Market Mover
However, in view of the quarterly figures from major US banks arriving in the afternoon, only a few brokers dared to leave cover. The second quarter data from JPMorgan, Goldman Sachs and Wells Fargo also provides information on the impact of the ongoing trade dispute between China and the US on corporate performance. A bunch of US economic data should point in the same direction. Johnson & Johnson could also provide impetus for Beiersdorf and Henkel.
Asia in reverse gear
Shareholders in Asia were cautious on Tuesday. The Nikkei fell by 0.7 percent to 21,535 points after the holiday break at the beginning of the week. The Chinese CSI-300 fell by 0.5 percent to 3,807 points. Incidentally, US President Donald Trump provided a differentiated reading of yesterday’s China data. He twittered that the growth of the Chinese gross domestic product of 6.2 percent in the second quarter had been the weakest in more than 27 years. US tariffs had an effect – thousands of companies left China. And that is why China wants a deal in the customs dispute. Let’s wait and see.
Close records in New York
Already the evening before, Wall Street had felt the reluctance in view of the balance sheet season. After all, the leading indices were once again able to reach record highs. The lethargic Dow Jones Industrial, for example, set a new record with 27,365 points. The Dow finally closed with a plus of 0.1 percent at 27,359 points. The S&P 500 hardly measurably went 0.02 percent firmer at 3014 points out of the day. And the Nasdaq rose by 0.3 percent to 7,967 points.
Citigroup kicked off the reporting season. In the second quarter, the bank earned significantly more than in the same period of the previous year; turnover and adjusted earnings per share exceeded analysts’ estimates. However, revenues in the trading division had once again fallen sharply, and classic investment banking had also weakened.
Burnt cash in the oil market
What remains is an important side aspect of the reporting season for the energy market. The question is whether investors are slowly losing patience with the small American oil producers. According to Oilprice.com, the shale-drillers in the oil and gas sector have burned around $187 billion in cash since 2012. Although production took off, profits were largely absent. After meetings with investors, Goldman Sachs noted that portfolio managers were currently hiding from the industry. In concrete terms, this means that investors are focusing on midstream and integrated companies – the majors – as well as clean energy. Service companies on the oil fields are currently particularly unpopular.
This is what the day brings
This afternoon, CFD traders in equities, bonds and forex, as well as the entire global trading community, will be facing several important U.S. economic data.
For British pound traders, it will be exciting at 2:00pm when Mark Joseph Carney, Governor of the Bank of England, steps in front of the microphones.
At 2:30pm German time, the news agencies report US retail sales in June.
At 3:15pm the industrial production follows in June.
And at 4:00pm the NAHB index for July is due, the figures of the National Association of Home Builders provide information about the construction sector.
Also at 4:00pm the American stocks are reported in May.
Finally, at 7:00pm, Fed chief Jerome Powell takes the floor. He speaks at a dinner of the Bank of France.
The Bernstein Bank wishes you successful trades!
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