30.10.2019 – Daily Report. Investors on the Frankfurt stock market also take a break on Wednesday morning. The first task is to process the flood of figures in the USA and Germany. In addition, the Federal Reserve will speak in the evening about the interest rate decision. And finally, negative reports about the customs dispute between China and the USA stopped the buying mood.
Slight minus on the German stock exchange
The Frankfurt Stock Exchange took it easy on Wednesday. The DAX slipped 0.3 percent back to 12,900 points. Three heavyweights, Deutsche Bank, VW and Bayer, presented their business figures – with the Deutsche Bank share plummeting sharply.
In terms of interest rate decisions, most stock market participants expected the third interest rate cut this year. Anything else would be a disappointment and could send Wall Street and the DAX south. But if you trade CFD, this should not be a problem – after all, you have the opportunity to speculate on both rising and falling markets.
Dampers the Customs Controversy
Global trade also registered several sceptical comments on China. Washington apparently managed to lower expectations. Yesterday a US official – who? – according to several media reports that the hoped-for signing of Phase 1 at the APEC summit in Chile in a good two weeks’ time might not happen after all.
In addition, CNBC reported, citing insiders, that China is reluctant to implement the promised purchases of 50 billion dollars from US farmers. For the USA, however, this is a particularly important cornerstone in a deal. Beijing fears that the Chinese market will not be able to process a large amount of agro-goods exported in a short period of time. An oversupply would push down local prices. The news focused on US futures on pork and soya.
And then the Chinese foreign ministry also spoke with anger. After yesterday’s announcement that Huawei and ZTE would soon be classified as a risk to national American security, spokesman Geng Shuang now gave a clear message. According to AP News he accused the USA of “economic bullying behavior”. It will be exciting on November 19 – when the Federal Communications Commission will decide whether US companies are allowed to use public money to buy 5G equipment from Chinese companies.
The stock market players were skeptical about the shrill sounds. Because of the news, the Chinese CSI-300 slipped 0.5 percent back to 3,891 points. The forex market apparently continues to believe in an agreement, the renminbi remained quite stable recently – USDCNY stood at 7.0563. On the Tokyo stock exchange, investors first took profits after seven friendly trading days. The Nikkei 225 slipped by 0.6 percent to 22,843 points.
New York weak despite S&P high
Wall Street was also hesitant the night before. At the closing bell, the Dow Jones recorded a minimal loss of 0.1 percent to 27,071 positions. The S&P 500 reached a new all-time high of 3048 points in the course of trading. However, it also finished trading at minus 0.1 percent at 3037 points. The Nasdaq 100 even fell by 0.8 per cent to 8,048 points.
In the reporting season there were light and shade. The Google mother alphabet failed to live up to expectations. Merck and Pfizer, on the other hand, were pleased. Dito General Motors.
Smashed the Gordian Brexit node
Sterling held quite tight at 1.2875 dollars. The news that Labour has now agreed to a new election was a source of joy. Yesterday evening the House of Commons passed a law to elect a new parliament on 12 December. Now the House of Lords still has to give its blessing. The entire financial sector and export-oriented companies hope that the paralysis in parliament will be ended by clear majorities. Of course, the sympathies do not necessarily apply to the left, but to the Tories.
This is what the day brings
The appointment calendar on Wednesday is full to bursting: Market Mover
At 1:15 pm, the ADP employment data for October will be received first.
The provisional GDP for the USA in the third quarter is reported at 1:30pm.
Ditto the figures for private consumption.
Furthermore, the US crude oil inventory data of the Energy Information Administration will be published at 3:30pm.
The highlight of the day will be the Federal Reserve’s interest rate decision at 7pm, followed by a press conference on equities, the dollar and US Treasuries.
Bernstein-Bank wishes 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.