15.11.2019 – Daily Report. Positive news from the negotiations between China and the USA are pleasing investors. Wall Street is holding close to its record highs. And the DAX is lurking below its annual high with a slight gain.
Upward gap in Frankfurt
Optimism in New York has raised the Frankfurt stock market. The DAX started Friday with a jump to 13,257 points. Then it fell slightly and gained 0.4 percent at 13,236 points. Volatility is likely to continue on the small expiration date. On Tuesday, the leading index reached its highest level since January 2018 at 13,308 points. Since the beginning of October, the index has risen by around 12 percent.
Stop and Go in the Customs Controversy
As is so often the case, happy customers from Washington made me buy. US economic advisor Larry Kudlow told journalists yesterday evening that talks about a first partial agreement in the trade dispute were in the final phase. He added there were “very constructive discussions” with Beijing and “the mood is pretty good”. Both sides were in close telephone contact and an agreement could soon be reached.
Previously, the Financial Times had slowed down the bulls a little. Citing an insider, the paper reported that frustration about China was growing in the Trump administration. For Beijing had not offered enough concessions to justify a reduction in American punitive tariffs. China is thus delaying a solution and lowering the chances of concluding a deal in the coming days. Perhaps that was a gang warning to the Middle Kingdom.
One thing is certain: the matter remains exciting. If you trade stocks or CFDs online, you should have direct access to the market and keep an eye on regular market updates. A customs deal might also involve buying from US farmers – which is why traders might want to take a look at soy. The January contract has been trading at $917.38, almost unchanged recently.
China keeps interest rates up
Meanwhile, shareholders in the People’s Republic held back. In China, the CSI-300 fell by 0.7 percent to 3,877 points. Many brokers were also disappointed that the Chinese central bank has kept the rate for medium-term loans to financial institutions (MLF) unchanged at 3.25 percent. After all, the central bank pumped a further 200 billion yuan (26 billion euros) into the money market to prevent lending rates from rising. But this was judged to be too little. China’s economy is currently growing as slowly as it did almost 30 years ago. In Tokyo, the leading index Nikkei 225 bid farewell on Friday 0.7 percent firmer at 23,303 points.
Mountain air in New York
Supported by the positive statements in the tariff dispute, Wall Street remained close to its all-time highs on Thursday. The Dow Jones Industrial closed the day down slightly by 0.01 percent to 27,782 points. The broad S&P 500 gained 0.1 percent to 3,097 points, but did not reach a new record high. The Nasdaq 100 barely oscillated a noticeable 0.02 percent back to 8,258 points.
Switzerland warns against intervention
The Swiss National Bank (SNB) has confirmed its willingness to intervene in the foreign exchange market following the recent appreciation of the Swiss franc. In addition, the SNB is also relying on negative interest rates of currently minus 0.75 percent. In view of this development, many brokers had speculated that the SNB’s willingness to intervene had diminished. Yesterday, the franc reached its highest level since the beginning of October against the euro.
Back and forth in the oil market
Oil traders currently need strong nerves. On the one hand, the Department of Energy reported an increase in reserves of 2.2 million barrels. And thus contradicted the American Petroleum Institute, which had reported a reduction of 0.5 million. In addition, OPEC’s production increased by 943,000 barrels per day to 29.7 million barrels in October compared to the previous month. Hopes of an end to the customs dispute supported prices somewhat. WTI fell by 0.1 percent to $56.73, Brent lost 0.4 percent to $62.06.
That brings the day
The diary brings some interesting events to the end of the week, the overview can be found as usual here: Market Mover
First, the Empire State Index arrives at 2:30pm.
At the same time, US retail sales and industrial production will run via the tickers.
Capacity utilization will follow at 3:15pm.
And at 4pm the stock inventories are reported.
The Bernstein-Bank wishes successful trades and a relaxing weekend!
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