16.12.2019 – Daily Report. We’ll take care of the annoying details later – now we want to celebrate a little. According to this motto, the market welcomes the many question-marked customs deal between Beijing and Washington. Wall Street marks new highs, but then resets. The DAX rises on Monday.
Frankfurt attracts
The DAX rose by 0.6 percent to 13,358 points at the start of the week. The futures on the Dow rose by 0.2 percent, the contract on the S&P 500 by 0.4 percent. On Friday, however, the German stock market indicator proved that investors had their first doubts in view of the customs deal: the DAX reached a new high for the year at 13,423 points, but fell back to 13,283 points by the close of trading.
Scepticism about customs deal
That’s no wonder, because the customs deal leaves some questions unanswered. This is a fact: Both governments announced on Friday that, as part of the agreement, America will halve part of its existing punitive tariffs on Chinese shipments. The most important fact is that the US has cancelled the new punitive tariffs that were actually planned yesterday. In return, Beijing agreed to purchase agricultural, industrial and energy products from the US on a large scale.
However, no text has been published on phase 1 – it does not yet exist. Nor has there been a logical official signing ceremony between Presidents Donald Trump and Xi Jinping.
No clear trend in Asia
This was not enough for investors in Japan – they used Monday for profit taking. The Nikkei 225 closed 0.3 percent lower at 23,952 points. Japan’s leading index had climbed to its highest level for more than a year on Friday due to the prospect of the partial agreement. The Chinese CSI-300, on the other hand, rose by 0.5 percent to 3,988 positions on Monday. The data on industrial production and sales in the retail sector also provided a buying mood. The yuan rose to 6.98 against the US dollar.
Oil and Euro Slightly Higher
Investors in other markets were cautiously optimistic. On the one hand, Brent rose in the hope of stimulating global trade by 1 percent to 65.32 dollars; WTI also gained 1 percent to 60.17 dollars. EURUSD rallied to 1.1150 on Monday morning, while gold’s troy ounce remained unchanged at 1,476.22 dollars.
Hesitations in New York
Investors in New York first took the opportunity on Friday to change their minds. The Dow Jones, S&P 500, Nasdaq Composite and Nasdaq 100 all reached new highs. But then sales set in: The Dow Jones index closed virtually unchanged at 28,135 points. The S&P 500 also dropped out of trading almost unchanged at 3,169. The Nasdaq Composite gained 0.2 percent to 8,735 positions.
This is what the day brings
The calendar of events brings some interesting events on Monday, you can find the overview here as usual: Market Mover
First, the Empire State Index for December will be reported at 2:30pm.
At 3:45pm the Markit PMI Manufacturing and Services will be published for December.
And at 4:00pm the NAHB index will start.
The Bernstein-Bank wishes you successful trades!
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