16.10.2019 – Daily Report. The strong start in the US reporting season is pleasing for investors in America. And initially also the shareholders in Frankfurt. News about Brexit also gives hope. Even an about-turn from China in the customs dispute is initially calmly received.
Frankfurt running sideways
The DAX started a new summit storm on Wednesday morning, but initially did not quite make it to the top. After a strong start, the index crumbled and recently held at minus 0.1 percent at 12,624 points. Yesterday afternoon, the DAX reached its annual high of 12,682 points. The high in the morning was 12,668 points.
Investors hiked off rising European car sales as a statistical effect. According to the European industry association Acea, sales in September climbed by 14.5 percent to 1.2 million vehicles. But a year ago, sales fell by almost a quarter due to new emission regulations.
The US reporting season – above all the good quarterly figures for the third quarter from the major bank JPMorgan or the health insurer United Health had pleased investors.
Asia predominantly stronger
Most investors in Asia followed the US stock market upwards. In Tokyo, the Nikkei-225 closed 1.2 percent higher at 22,473 points. The Asia Dow climbed 0.8 percent to 3,236 points.
The Chinese stock exchange contributed a drop of bitterness, the CSI-300 closed 0.3 percent lower at 3,923 points. One reason: a law passed by the US House of Representatives to protect democracy and human rights in Hong Kong caused displeasure in Beijing. The Chinese government threatened to take countermeasures. Chinese car sales also cast doubt on some brokers: the market slipped 6.6 percent to 1.8 million cars sold. The minus in September was the 15th decline within 16 months.
Joy in New York
Brokers in New York were pleased with predominantly positive quarterly figures. The Dow Jones climbed by 0.9 percent to 27,025 points on Tuesday. The S&P 500 rose by 1 percent to 2,996 points. And the Nasdaq 100 gained 1.3 percent to 7,943 points.
The old suffering with China
Interestingly, investors ignored a new Chinese U-turn in the tariff dispute. According to Bloomberg, Beijing is now reluctant to buy agricultural products worth up to $50 billion in the US. China does not want to commit itself to this until Washington withdraws all existing punitive tariffs. But for US President Donald Trump these are the whip that forces China to keep its promises.
Grande finale in Brexit
Meanwhile, hopes remain for a solution in Brexit and a rise in the British pound. Most recently, however, EURGBP was thrown back to 1.1496, as talks were interrupted in the morning without an agreement. “Cable” remains exciting today, because Wednesday is the last day of negotiations before tomorrow’s EU summit in Luxembourg – and an agreement must be announced here, otherwise the exit date of 31 October will wobble.
Turkey in the sights
The situation remains tense for the Turkish lira. After the US sanctions of the White House in the course of the invasion of Northern Syria, which were rather perceived as lax, the public prosecutor of the Southern District of New York now followed suit. He is investigating the Turkish Halbank, the seventh largest financial institution in Turkey, for circumventing Iran’s billions in sanctions. Shortly after the news, Senator Lindsay Graham also announced that he would introduce a bill for sanctions against Turkey on Thursday.
That brings the day
US retail sales for September start at 14:30.
The NAHB index for October will then be reported at 16:00.
And at 8 p.m., the Federal Reserve presents its Beige Book.
At 10.30 p.m. German time, US crude oil inventory data from the private American Petroleum Institute will be ticked.
On Wall Street, the quarterly results of Netflix, Alcoa, or IBM are closely monitored.
As always, you can find the complete calendar of events here: Market Mover
The Bernstein Bank wishes you successful trades!
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