11.12.2019 – Daily Report. After a dramatic Tuesday, the stock market tries unsuccessfully to recover on Wednesday. The German benchmark index is oscillating sideways. Once again, contradictory reports about a rapprochement in the customs dispute between China and the USA are causing restraint. And global trade remains cautious because of the Fed as well.
The DAX is losing its courage
At first it looked like a recovery. But most recently, the German benchmark index lost its early gains. The indicator was 0.1 percent higher at 13,087 points. Yesterday, after a meagre start, prices slipped and fell to 12,887 points. This is how weak the DAX had last been on October 31. Then the index rose again and the losses were reduced to 0.3 percent. Interestingly, the German stock market indicator yesterday turned pretty much on the 50-day line, which runs at 12,891 points. Once again we can rely on the basics of chart analysis.
Back and forth in the customs dispute
The reason for yesterday’s U-turn was a report in the Wall Street Journal. According to the report, the start of further US punitive tariffs on Chinese goods scheduled for Sunday could possibly be postponed. The paper referred to members of the Chinese and American negotiating delegations. Furthermore, there should be no hard time limit for the negotiations – so no time pressure.
On the other hand, economic advisor Peter Navarro on Fox News dampened expectations. The hardliner Navarro said there was no indication that December tariffs would not come into force. He added that it is up to the Chinese whether there is a deal or not. White House Chief of Staff Mick Mulvaney also confirmed that tariffs depended on how the negotiations developed, and at least interjected that they were “pretty good”. Probably the struggle for a customs deal will continue until the deadline on Sunday. So volatility is guaranteed – good for you when you trade CFDs.
Wait and see in Asia
Against this backdrop, investors in Tokyo held out sideways. The Nikkei lost 0.1 percent to 23,392 points. The Chinese CSI-300 closed almost unchanged at 3,903 points.
Restraint in New York
Trading in New York was largely undramatic. The Dow Jones closed Tuesday 0.1 percent lower at 27,882 points. And the market-wide S&P 500 also fell by 0.1 percent to 3,132 points. The Nasdaq 100 also lost 0.1 percent to 8,354 points.
Dampers for the Tories
A look remains at the British pound, which recently fell slightly to 1.1855 euros. The reason is a cold shower for Prime Minister Boris Johnson. According to an eagerly awaited last survey before tomorrow’s election, the Tories’ lead in seats in the House of Commons has more than halved. According to YouGov, Conservatives still win 339 of the 650 seats in the House of Commons, 20 less than in the previous YouGov survey at the end of November. Labour comes in at 231, 20 more than before. In addition, smaller parties gained. All in all, the previous survey had revealed a majority of 68 Conservative deputies; now election researchers only expect 28 seats ahead of all other parties. Since YouGov is regarded as extremely reliable, this again looks more like unclear power relations and a persistent Brexit stranglehold.
This is what the day brings
The event of the day is the result of the Federal Reserve meeting at 20:00. Hardly any broker, however, expects another interest rate hike after three key rate cuts.
US consumer prices will arrive at 3:30pm.
At the same time the American real incomes are reported.
At 4:30pm the US Department of Energy publishes its oil report.
All dates can be found here: Market Mover
The Bernstein Bank wishes you 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.