The pressure does not ease

By 31/05/2019News
China vs USA

 

31.05.2019 – Daily report. The German stock market is going down again. Investors are concerned about possible Chinese countermeasures in the customs dispute with America. Meanwhile, the US administration has intensified its rhetoric. Investors are waiting for new US economic data in the afternoon.

DAX in the red

The stock market is shaking, at least a little. On Friday morning, all shares in the DAX presented themselves in the loss zone. The index recently slipped by almost 2 percent below the 11,700 mark. Nervousness also prevailed in global trading.

Customs dispute again and again

This was triggered primarily by news that China, in retaliation for the punitive tariffs imposed by the USA, will now raise tariffs on US goods worth 60 billion dollars. In addition, speculations have recently been growing that China wants to cut US industry off from supplies of rare earths. The production of mobile phones and computers would be particularly affected. Just to mention a few things: it was precisely this possible counter-attack that we announced to you at this point as a possible option.
Meanwhile, US Vice President Mike Pence has upgraded his verbal skills. After a meeting with Canadian Prime Minister Justin Trudeau, he told the press that the US could more than double its punitive tariffs if necessary. In addition, Pence is likely to pillory the Chinese leadership with a speech on the 30th anniversary of the Tiananmen massacre, according to CNBC television.
The footnote remains that the USA has now announced 5 percent punitive tariffs to its southern neighbour because of the unchecked influx of people from Mexico. China plus Mexico – Europe-wide, car stocks came under pressure.

China’s industrial engine stutters

In addition, weak economic data from China depressed bull sentiment. The official industrial purchasing managers’ index slipped to 49.4 points in May, from 50.1 points in April. This proves that the tariff conflict with the USA is already paralysing the domestic economy. All important economic data can be found here: Market Mover

However, the hope for stimuli from Beijing supported the courses. In China, the blue chip index CSI 300 lost 0.3 percent to 3,630 points in the morning. The Nikkei in Tokyo, on the other hand, slipped by 1.6 percent to 20,778 points.

Wall Street robust

Wall Street had shown itself to be stable on Thursday. The Dow Jones Industrial closed almost unchanged at 25,128 points. The S&P 500 rose slightly by 0.02 percent to 2784 points, while the Nasdaq 100 gained 0.1 percent to 7224 points. Support was provided by figures on US economic growth, which had accelerated at the beginning of the year. From January to March, the gross domestic product increased by 3.1 per cent over the year as a whole.

This is what the day brings

If you trade CFDs or are involved in online stock trading, you should keep an eye on your trading platform this afternoon.
At 2:30pm, the personal expenses and income for April from the USA will be on the tickers. At 3.45pm German time the Purchasing Managers Index for Chicago follows in May. And at 4 pm the consumer sentiment indicator of the University of Michigan in May (2nd survey).
The Bernstein Bank wishes you successful trades!

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