15.10.2019 – Daily Report. The stockbrokers in Frankfurt have put on pink glasses. Wall Street is completely different. Because of the Chinese demand to renegotiate the already meagre customs deal, investors in the USA and China hesitated. After all, there were bullish signals about Brexit. And also to Turkey.
Profits in Frankfurt
The German stock market index recently held up by 0.4 percent to 12,535 points. The ZEW Indicator of Economic Sentiment of minus 22.8 hardly moved the market. As always, you can find all the data here: Market Mover
Wirecard caused a sensation: the share temporarily plunged 23 percent to a six-month low. The “Financial Times” reported that internal Wirecard documents indicated excessive sales in Dubai and Ireland. Despite everything, the German benchmark index reached its highest level since the end of July on Tuesday morning. All that mattered most recently to the German shareholders was the avoidance of an escalation spiral between China and the USA and the cancellation of US tariff increases as of today, October 15.
China demands renegotiation
Beijing had still unsettled many investors the day before. Before signing the partial agreement, China wants to hold further talks before “Phase 1” of the trade agreement can be signed. Bloomberg reported this with reference to an insider. According to this, details are to be worked out at the end of October before President Xi Jinping can sign the agreement announced on Friday by US President Donald Trump.
We continue to advise increased vigilance: If you trade CFDs or online stocks, you must keep direct market access open – and this with Germany’s best CFD brokers with a Bafin license, whose servers do not crash if the turmoil on Wall Street and the DAX breaks out. What could blossom next: China refuses to sign Phase 1 until the US cancels the next tariff increases scheduled for 15 December.
Asia rather sceptical
Investors in Asia have recently been sceptical. In China, the CSI-300 fell by 0.4 percent to 3,936 points. Although the 3 percent inflation rate in the People’s Republic raises the question of whether Beijing can really refuse a customs deal. Consumer prices reached a six-year high in September. According to the national statistics office, pork was 69 percent more expensive than in the previous year.
The Tokyo stock exchange gained ground, but after the holiday break it only caught up with the reaction to a possible trade agreement. The Nikkei index gained 1.9 percent to 22,217 points.
New York is waiting
Investors on Wall Street also stayed sideways in the face of the Chinese turnaround on the previous evening. The Dow Jones index closed 0.1 percent lower at 26,787 points. The market-wide S&P 500 also fell by 0.1 percent to 2,966 points. And the Nasdaq Composite also slipped 0.1 percent to 8,048 points. Among all three indices, there was a price gap that is usually closed. Overall, trading was quite tough due to the “Columbus Day” holiday.
Sterling on the upswing
The British pound was much more energetic: the hope for a rapid Brexit compromise pulled “Cable” upwards. EU chief negotiator Michel Barnier described an agreement as possible this week. According to the channels RTÉ and BBC, London had submitted new proposals on the Irish border issue. So GBPEUR and GBPUSD remain exciting.
Relief in Istanbul
Relief also spread to the Turkish lira and the Istanbul stock exchange. Brokers saw the US sanctions as moderate after the invasion of Syria. For example, Washington imposed a duty of 50 percent on Turkish steel imports and stopped trade talks with Ankara over goods worth 100 billion dollars. The US Treasury also blacklisted the Turkish Defence Minister, the Energy Minister, their two ministries as a whole and the Home Secretary. This would allow possible assets in the USA to be frozen and business to be done with them. Was that it now or is something yet to come? Traders should keep a close eye on ISE 100, EURTRY and USDTRY.
This is what the day brings
In the early afternoon, US banks Citigroup, Goldman Sachs, JPMorgan and Wells Fargo are going to open the reporting season.
The Empire State Index for October will be published in the USA at 2:30pm.
Additionally at 3pm the European Central Bank’s weekly financial statement will follow.
The Bernstein Bank wishes you successful trades!
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