05.11.2019 – Daily Report. The US indices have once again set new records. In early trading, the DAX almost managed to reach an annual high again. Market moving news was sparsely sown.
The DAX actually deserved a break: on Monday, the German benchmark index had dropped out of trading at its highest level for a year and a half, 13,136 points. The indicator had reached 13,166 over the course of the year. Most recently, the German benchmark index was again 0.1 percent firmer at 13,154 points. Not much is missing from the all-time high, the 13,596 points from January 2018 are a good 3 percent above the current level.
Customs hope again and again
Once again, investors analyzed news on the customs dispute. First, the Wall Street Journal reported, citing a high-ranking representative of the US government, that Beijing and Washington could withdraw some of the most recently introduced tariffs under a partial agreement.
The Financial Times also reported that US politicians were considering cancelling 112 billion dollars worth of tariffs on goods as a concession for Phase 1. Penalty duties of 15 percent on goods such as clothing and computer monitors were introduced on September 1. In return, the US demanded stronger protection for the intellectual property of US companies. Meanwhile, Chinese President Xi Jinping promised steps to open the domestic market to foreign investors at a trade show.
Brokers in Asia are accessing the market
The Chinese CSI-300 reacted with a spurt above the 4,000 mark and closed 0.6 percent higher at 4,003 points. The Nikkei 225 rose after the holiday break by 1.8 percent to 23,216 points.
Boom in New York
The night before, the record hunt on Wall Street had continued. What did investors care about, given yesterday’s news about the customs deal, that US industry orders fell more than expected in September?
Now the Dow Jones also reached a new high, closing with a gain of 0.4 per cent to 27,462 points. The S&P 500 rose a further 0.4 percent to 3,078 points. And the Nasdaq 100 climbed the high by 0.6 percent to 8,211 points. By the way, all the major US indices ripped a small upward gap with yesterday’s move. Wall Street is otherwise a carefree country, as a glance at the VIX shows: The fear indicator recently remained just under 13 points – a level from which it rose steeply last July after several attempts.
Oil warning from OPEC
Meanwhile, the oil cartel OPEC sent a bearish request to speak to the oil market. In the annual World Oil Outlook (WOO), OPEC lowered its growth estimate from 1.4 million barrels per day in 2018 to 0.5 million barrels by the end of the next decade. Otherwise, the organization described the past twelve months as a challenge. However, the question arises as to how valid an estimate that extends several years into the future is.
This is what the day brings
In the afternoon some potentially market moving dates are scheduled.
First, the U.S. trade balance for September will be in at 2:30pm.
Shortly thereafter at 3:45pm the Markit PMI Service for October will follow.
And at 4pm the ISM index Services 10/19 is reported.
As always, you will find the overview here: Market Mover
The Bernstein Bank wishes you successful trades!
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