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No movement before the Fed decision

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18.09.2019 – Daily report. Rien ne va plus: The shareholders on the Frankfurt Stock Exchange go on a temporary strike. Commitments are in short supply. It is hardly to be expected that the situation will change over the course of the day. Because in the evening the Federal Reserve announces its interest decision. Otherwise, the situation on the oil market will continue to ease.

Break in Frankfurt

Hardly any movement on the Frankfurt Stock Exchange: The DAX has barely changed recently at around 12,380 points. The crisis in the Persian Gulf receded into the background. Hardly any attention was paid to a report on the faltering European automobile market: from January to August, 3.2 percent fewer cars were registered than in the same period last year. For investors, only the Federal Reserve was important: for most brokers, another rate cut is a foregone conclusion.

Second rate cut priced in

This much conviction has never been so strong: most analysts expect central bankers to lower their key interest rate band by a further 0.25 percentage points; the current range is between 1.75 and 2.0 percent. At the end of July, the currency authorities had lowered interest rates for the first time in more than ten years.

The unshakeable faith of the market naturally harbours a high potential for disappointment – which often comes unexpectedly. Perhaps Fed head Jerome Powell wants to demonstrate his independence. If you trade CFDs or are active in online stock trading, you might want to consider a protective put. Or because of the recent rise in oil prices and the unresolved trade dispute with China, the Fed is pushing the gas pedal through and lowering interest rates even more than hoped for – then you can look forward to a bull market on the stock exchange.

Relaxation on the oil market

By the way, the magazine “Forbes” highlighted how closely the topics of oil/ Iran and China are connected. Beijing has promised Tehran investments of 400 billion dollars over the next 25 years. The aim is to expand oil and gas production and infrastructure. China wants to quench its thirst for oil and de facto circumvent the sanctions of the West. Interesting side effect: If the USA and Saudi Arabia were to strike at Abquaiq and Kurais against Iran in retaliation for the weekend air strike, they would also hit China. If refineries and ports are destroyed, the Chinese would probably have to put even more money on the table for reconstruction.
Otherwise, the oil price settled back south after the wild ride of the past few days. A barrel of WTI was last traded at around 59 dollars, a barrel of Brent at around 65 dollars. Saudi Aramco had reported that full production was to be restored by the end of September.

No clear trend in Asia

The CSI-300 in China gained 0.5 percent in the morning to 3,911 points. The Nikkei closed 0.2 percent lower at 21,961 points. Japan reported falling exports again in August – for the ninth time in a row. The minus of 8.2 percent was quite strong, with many analysts expecting an even worse decline. All data can be found here: Market Mover

A slight plus in New York

On the evening before, the New York Stock Exchange had also been rather reserved. The Dow Jones Industrial gained a little only shortly before the closing bell and dropped 0.1 percent more firmly out of trading at 27,111 points. The S&P 500 rose 0.3 percent to 3,006 points and the Nasdaq 100 climbed 0.5 percent to 7,889 points.

This is what the day brings

The Fed’s interest rate decision marks the most important date of the day at 8 pm German time. It will be even more exciting from 8:30pm when Fed Chairman Powell will give his outlook on the topics of inflation, economic growth and unemployment. Each half-sentence could whirl Wall Street, Dollar and US-Bonds around, therefore you should absolutely keep your regular market updates in the view.
Before that, US building permits and construction starts for August are due at 2:30pm.

The weekly crude oil inventory data from the Energy Information Administration will also be available from 4:30pm.

The Bernstein Bank wishes you 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.

Gold Stock Graph

Tense calm after the air strike

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17.09.2019 – Daily report. It hasn’t been as bad as expected so far: No war in the Persian Gulf, relatively moderate tones from Washington and Riyadh, the oil price is not shooting up any further. Nevertheless, investors in global trading remain cautious. And for good reason: We may experience the calm before the storm on the stock market and in the oil market.

Caution in Frankfurt

First of all, wait and see: On Tuesday noon, the DAX was down by 0.1 percent to 12,366 points. After eight winning days in a row, the Frankfurt Stock Exchange had again booked a setback on Monday, but only a small one. In view of the air strike on the Saudi oil industry, this is astonishing, just like the so far restrained reactions of Saudi Arabia and the USA.
US President Donald Trump said he did not want war; the Saudis did not hold the mullahs in Tehran directly responsible for the attack on Abqaiq. But nobody believes that the Huthi rebels in Yemen should be able to carry out such a professional attack. Ergo: Not all days are evening yet, the danger of war is by no means averted. So always keep an eye on regular market updates and direct market access open.

Moderately positive ZEW data

Meanwhile, the Frankfurt Stock Exchange ticked off new data from the ZEW with a shrug of the shoulders. The medium-term economic expectations of financial analysts and institutional investors were better in September: The index rose from -44.1 points in August to -22.5 points. However, the indicator of the Centre for European Economic Research in Mannheim remains well below its long-term average of 21.5 points.

Scepticism in Asia

There was some relief on another front: Trump told Congress that the US and Japan were ready to sign a trade deal. And the Chinese state television CCTV reported that a Chinese delegation would arrive in Washington this week to prepare for negotiations at the highest level in October. Deputy Finance Minister Liao Min also flew to the USA, the invitation had come from Washington. The CSI-300 nevertheless dropped by 1.7 percent to 3,891 points. After the long weekend, the Nikkei recorded only a plus of 0.1 percent to 22,001 points.

New York is waiting

In the USA, doubts about the Federal Reserve’s expected rate cut were growing. An average of 25 basis points is considered to have been agreed by most brokers. However, Fed Chairman Jerome Powell may feel compelled to prove his independence in the face of Trump’s repeated pushing. The Dow Jones index lost 0.5 percent yesterday to 27,076 points. The S&P 500 lost 0.3 percent to 2,997 points. And the Nasdaq Composite also lost 0.3 percent to 8,153 points.

This is what the day brings

In addition to the smouldering conflict in the Persian Gulf, a few economic data items are coming to the fore. As always, you will find an overview here: Market Mover
At 2:30pm US data on industrial production in August will be available on the ticker.
This is followed by the NAHB housing market index at 4pm.

Traders in the Forex market should also carefully scan the news regarding the British Pound and Brexit: The highest British court deals with the forced break of the parliament. Should this be overturned, we are threatened with new hustle and bustle in the House of Commons. Oooorder!

The Bernstein Bank wishes you 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.

Pump Oil

Oil Shock Stops the DAX

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16.09.2019 – Daily report. The professionally executed air strike on an important Saudi oil plant stops the latest DAX bull market. Oil prices are now skyrocketing at double-digit rates, and gold and silver are picking up. Iran is presumably behind the attack. The question now is whether the USA and Saudi Arabia are retaliating.

Fear of war depresses the DAX

After eight days of gains, the German benchmark index fell back. By Monday midday, the DAX had fallen by 0.7 percent to 12,378 points. The reason for this was the attack on the important Saudi oil refinery Abqaiq – now a conflagration is threatening the Persian Gulf.
As we had already analysed for you weeks ago in a special report, there is now a threat of the USA destroying Iran – especially the Revolutionary Guards. So be sure to keep an eye on the regular market updates and trade only with Germany’s best brokers with Bafin licenses who have strong servers – if it starts, the oil price should continue to shoot up and the world’s stock exchanges should shake.

Oil price jump

On Monday morning, the price of Brent shot up by up to 20 percent in the first trading minutes before the situation calmed down again. In percentage terms, this was the biggest price jump since the Iraq war in January 1991. In absolute terms, the rise of just under 12 dollars in the Brent future in London was even the largest since the contract was issued in 1988, as Bloomberg added. WTI rose by around 11 percent. In the meantime, US President Donald Trump relaxed the situation by announcing on Twitter that he would tap into the strategic oil reserve if necessary.

Air raid on Saudi refinery

Over the weekend, the largest oil refinery in Saudi Arabia in Abqaiq came under fire. The air raid – probably with drones and cruise missiles – hit the world’s largest Saudi Aramco refinery in Abqaiq near Khuraii’s second largest Saudi oil field early Saturday morning. The Saudis had to cut their production by 5.7 million barrels or about half. While experts do not see any sustained supply bottlenecks, the blow proves the vulnerability of the oil plants – surprisingly, there is no air defence like the Israeli “Iron Dome”.
While the Houthi rebels from Yemen took responsibility, US Secretary of State Mike Pompeo blamed Iran for the attack. The rebels reported the use of ten drones, but there were 19 impacts. Photos of wreckage in the Saudi desert, which probably belong more to missiles than to drones, continued to circulate on the Internet. On Sunday evening, a US government spokesman reported that there were indications that missiles had flown in from a west-northwest direction, i.e. from Iran – and not from a southern direction from Yemen.

Locked and loaded

Meanwhile, US President Donald Trump has threatened Iran with retaliation after the attack on Saudi Arabia. The United States is “locked and loaded”, which means that the weapon is loaded and the cock is cocked. Tehran rejected the accusations.
The commander of the Iranian Aerospace Force of the Revolutionary Guards, Amir Ali Hajizadeh, indirectly threatened the USA with war and immediately identified his troops as the main target of the Americans. Hajizadeh told the official news agency Tasnim that all American bases and aircraft carriers are within a distance of 2,000 kilometres around Iran and thus within reach of Iranian missiles. He added: “His country has always been ready for a total war. We think: If an American aircraft carrier is sunk, then the Iranian army will be exterminated. Which in turn would draw the respective allies into a great war: Saudi Arabia, the United Arab Emirates, Oman, Israel on the one hand; Houthi rebels, Hamas, Hezbollah, Lebanon on the other.

Dampers from China

Other factors also depressed sentiment on the stock market. Recent data shows that China’s economy was weaker than expected due to the trade war with the US and structural problems in August. Growth in industrial production, retail sales and investment in property, plant and equipment continued to slow. As always, you can find all the data here: : Market Mover

In the People’s Republic of China, the CSI-300 with the country’s most important blue chips fell by 0.4 percent to 3,958 points. In Japan, the stock exchanges were closed due to a holiday.

Waiting in New York

On Friday, investors in New York had taken it easy. The Dow Jones gained 0.1 percent to 27,220 points, a weekly gain of 1.6 percent. The S&P 500 fell 0.1 percent to 3,007 points on Friday and the Nasdaq 100 lost 0.3 percent to 7893 points. Even solid economic data from the US retail trade did not create a buying mood.

This is what the day brings

Apart from the trouble spot in the Persian Gulf, there are hardly any important news to come. But these events offer more than enough material to shake the global financial markets – so keep your trading platform in view and your market access open at all times.

At best, the Empire State Index for September at 2.30 pm will be important.
The Bernstein Bank wishes you 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.

Stock market analyse

Another shot of cheap money

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13.09.2019 – Daily report. The European Central Bank delivered as hoped and further relaxed monetary policy. The stock market is satisfied and buying. But this is only restrained: For perhaps the era of cheap money will end after the departure of Mario Draghi – resistance is apparently forming in the central bank. Otherwise the investors wait for new economic data from the USA. And hope for a customs deal between China and the USA.

Moderate gains for the DAX

The German stock market continues to make progress. By Friday midday, the leading index had climbed by 0.2 percent to 12,439 points. Not bad: Since the low in August, the DAX has thus gained more than ten percent.
No wonder, the ECB decided at its meeting yesterday to raise the penalty rate for bank deposits from 0.4 percent to 0.5 percent for the first time since 2016. In addition, the ECB wants to buy bonds worth 20 billion euros per month again from November 1. Thus, the program to buy government and corporate bonds, which was terminated at the end of 2018, will be reactivated – it will now continue indefinitely. The debt states, like addicts, are thus always getting new material. How the gigantic debt bubble will ever be reduced remains a mystery – with considerable crash risks for the stock market if at any time a state declares default.

Resistance to the flood of money

This insight also seems to be moving forward in the ECB. According to the “Spiegel”, the majority of the Central Bank Council was this time as close as never before, even if Draghi later presented things differently. According to insiders, a two-digit number of the 25-strong committee opposed the new steps – the Bundesbank and even the French, but a formal vote had not taken place. When you trade CFD or online stocks, you need to keep an eye on possible internal turmoil in the ECB – this has implications for stocks, bonds and currencies. Especially now that Christine Lagarde is taking up her post as head of the ECB – and according to many experts, she has earned herself a reputation of ignorance in the Argentine crisis.

US customs concession?

Meanwhile, overseas investors are counting on an agreement in the customs dispute between China and the USA. US President Donald Trump, on the advice of his entourage, is apparently thinking about a transitional deal with China. This was reported by the news agency Bloomberg with reference to several insiders. According to the report, the US could postpone or even reverse new punitive tariffs on Chinese goods if China is prepared to make concessions in return. Trump did not confirm this clearly to reporters in Baltimore – he said he favoured a full deal, but the easy points might have to be settled first in an interim deal – although there are no really simple issues.
While the Chinese stock market was unable to react due to a holiday, the Nikkei gained 1.1 per cent to 21,988 points – its highest level in over four months.

Rising prices in New York

Brokers in New York also bet on a tariff dispute deal: the Dow Jones Industrial climbed for the seventh consecutive trading day, missing its all-time high by 100 points. After profit taking set in, the Dow saved a gain of 0.2 percent to 27,182 points. The S&P 500 finally gained 0.3 percent to around 3,010 points and the Nasdaq 100 gained 0.4 percent to 7,917 points.

This is what the day brings

The calendar brings some interesting events, you can find the overview as always here: Market Mover
First of all, at 2:30pm the US retail turnover in August is due, ditto the import prices.
At 4:00pm, consumer confidence at the University of Michigan in September and stocks in July will follow.
US consumption in particular will be closely monitored as the domestic market will be a key factor for the Federal Reserve to cut interest rates.

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.

Boerse chart

Draghi final on the stock exchange

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12.09.2019 – Daily report. Wait and see in Frankfurt – investors in Frankfurt are hoping for a massive monetary policy programme from the European Central Bank by Mario Draghi, the outgoing head of the European Central Bank. In addition, US President Donald Trump sent a signal of goodwill to Beijing in the customs dispute.

Moderate DAX gain

More and more optimistic speculations about the extent of the new money injections have been circulating on the Frankfurt floor recently. Nevertheless, the DAX lost its early gains and rose only 0.1 percent to 12,374 points. This is not surprising: If you trade CFDs or are active online in stock trading, you should consider a possible disappointment. Or the fact that the market could react with a “sell the news” – after all, the DAX was heading for the seventh profit day in a row. We know more at 13:45.

Grande Draghi Final

Many brokers are hoping for a last big shot from the head of the ECB, which will help the shares to rise strongly. Not only with a bazooka, but perhaps even with a big Bertha. After all, Mario Draghi first raised some expectations at the central bank meeting in Sintra and then at the latest ECB meeting in July. A further reduction in the deposit rate for banks is now priced into the financial market; it is already minus 0.4 percent. In addition, the resumption of the purchase program for bonds with a volume of 20 to 30 billion euros per month is a foregone conclusion for many stock market participants. If not, the DAX is likely to plummet and the euro will rise.

Customs dispute gesture by Trump

US President Donald Trump was delighted with the second major stock market theme. He twittered on Wednesday that as a gesture of goodwill he would postpone the increase of tariffs for Chinese goods worth 250 billion dollars from October 1 to October 15. The increase is to take place from 25 to 30 percent. The step was taken at the request of Deputy Prime Minister Liu He against the background of the 70th birthday of the People’s Republic of China. By the way, China showed little gratitude: The Middle Kingdom has just concluded an agreement with Argentina on the first import of soya and has thus hit the US farmers.
In the People’s Republic, the CSI-300 rose by 1.1 percent to 3,972 points. Japan’s leading index, the Nikkei 225, closed 0.8 percent higher in Tokyo at 21,760, and at times climbed to its highest level for more than four months.

Winnings in New York

The US stock exchange officials are counting on a solution to the customs conflict and attacked courageously on Wednesday. The Dow Jones gained 0.9 percent to 27,137 points and closed at its high for the day, its sixth consecutive gain. The S&P 500 gained 0.7 percent to 3,000 points. The Nasdaq Composite rose 1.1 percent to 8,169 positions. Once again Trump wedged against the US central bankers, whom he described as fools – they were finally supposed to lower interest rates.

Series of hits against the oil bulls

The bulls in the oil market had to put up with several violent blows. Initially, the Energy Information Agency’s inventory data was mixed – as usual, you can find all the data here: Market Mover

In addition, the announcement in the market that the Russian central bank considers an oil price of 25 dollars to be possible for 2020 was being prepared. This was only one possible scenario. But who knows – perhaps there is a Kremlin strategy behind it to conquer market shares in oil with a low price. In line with this, deeper cuts in OPEC’s oil production seemed to be off the table, at least at the meeting in Abu Dhabi there was no real determination to do so.
According to Bloomberg, US President Donald Trump actually discussed the relaxation of sanctions against Iran and even a meeting with Iranian President Hassan Rouhani. That was the real reason for the departure of security advisor John Bolton. The hardliner exploded in the Oval Office on Monday when Finance Minister Steven Mnuchin supported the plan to renegotiate with Iran, they said, citing unnamed sources. This means: It is possible that Iranian oil will again come onto the market in larger quantities.

This is what the day brings

In addition to the ECB meeting, there are two other relevant dates in the calendar.
At 2:30pm US consumer prices for August are due.
At the same time, the first weekly applications for unemployment benefits in the USA will run over the tickers.

The Bernstein Bank wishes you 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.

Frankfurt börse

Shopping mood in Frankfurt

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11.09.2019 – Daily report. The bulls don’t give up control of the German stock exchange. In the middle of the week, signals of easing tensions from China in the customs dispute with the USA are giving rise to new optimism. CFD traders, who are active in the energy market, are also looking forward to the latest events in the oil sector – a lot is happening here.

The DAX climbs upwards

The recovery on the Frankfurt stock market continues: In early Wednesday’s trading, the German benchmark index gained 0.8 percent to 12,372 points. Yesterday, Tuesday, the DAX had made a U-turn, offset its losses and closed in positive territory. Despite the European Central Bank’s forthcoming intervention tomorrow, investors took up again. Many brokers, like the German Institute for Economic Research (DIW), also hoped for government stimuli. The DIW has called for a multi-billion government investment program to prevent a possible recession in Germany. The state should pay out 30 billion euros in additional public investments over 15 years.

Beijing signals willingness to negotiate

Beijing also sent a gesture of good will to Washington in the customs dispute. China presented a list of 16 US products to be exempted from punitive tariffs. These include medicines for cancer, medical equipment and chemicals. The state newspaper “Global Times” spoke of a “gesture of goodwill” in the trade dispute before both sides resume negotiations at the beginning of October. Hu Xijin, the editor-in-chief of the Times, who is well connected with the communist power apparatus, twittered that China was doing this to mitigate the negative consequences of a trade war, and that the decision would benefit both companies from the People’s Republic and the USA. The “South China Morning Post”, which is also close to the state, added that the exceptions should take effect from 17 September.
However, as whey and fish meal are also on the list – both serve as animal feed – the step also proves the need in China, where swine fever is raging and meat prices are skyrocketing. Beijing is also facing the threat of American companies emigrating. The US television channel CNBC reported on a survey conducted by the American Chamber of Commerce in Shanghai. According to the Chamber of Commerce, many US companies fear a collapse in business due to customs duties and want to withdraw from China as quickly as possible. 333 American companies in China were surveyed.

The reaction to the most recent development varied: The Chinese CSI-300 fell by 0.7 percent to 3,930 points. In Tokyo, on the other hand, the Nikkei 225 closed 1 percent higher at 21,598 points.

Late Activity in New York

Investors in New York had only dared to take out cover late the night before. The Dow Jones saved a plus of 0.3 percent to 26,909 points at the closing bell. The S&P 500 closed at 2,979 points, hardly measurable in the profit zone; in contrast, the Nasdaq 100 fell by 0.2 percent to 7,815 positions.

Oil boom signals

There are several factors that currently make oil interesting for CFD traders – volatility is rising here and there are some indications that oil prices might be rising. Initially, prices slipped after US President Donald Trump dismissed National Security Advisor John Bolton. The Super Falcon is regarded as an extreme hardliner towards Iran.

However, the industry is currently discussing an analysis by Raymond James & Associates that the US oil industry is at the end of its productivity road. The production volume is rising much weaker than expected, the investment bank reported. The production rate for the first 30 days of production (IP-30) has increased by up to 40 percent at the beginning of the decade. However, IP-30 fell to 11 percent in 2017, recovered to 15 percent in 2018 and collapsed to 2 percent in the first seven months of 2019, reports Raymond James.

Saudi Arabia could also reduce OPEC production. Many brokers suspect that the Saudis urgently need a higher oil price because of Saudi Aramco’s IPO. Perhaps we are already getting clarity from the current energy conference in Abu Dhabi – so you should keep an eye on the regular market updates on your trading platform. In addition, OPEC’s monthly report will be published today. And further the weekly US crude oil stock data of the national Energy Information Administration (EIA) are lining up at 16.30 o’clock.

This is what the day brings

The US producer prices for August at 4.30 p.m. are the only really date of importance on the agenda. As always, you will find the overview here: Market Mover

The Bernstein Bank wishes you 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.

Aktienmarkt

ECB and China put the brakes on DAX

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10.09.2019 – Daily report. Just don’t get caught on the wrong foot. Because on Thursday the European Central Bank will be speaking. In addition, bad data from China is slowing the buying mood. Global trade is therefore waiting. The shareholders in Frankfurt are also holding back.

Caution in Frankfurt

This day should be rather quiet, as long as there are no unexpected requests to speak from politicians – e.g. about Brexit or the China/USA customs dispute. For the decisive topic was the upcoming ECB meeting, or rather waiting for it. Most investors are sure that the central bank will lower the interest rate for deposits with the central bank on Thursday. However, it is unclear how big the move will be and whether ECB boss Mario Draghi will also announce a resumption of security purchases. The DAX thus fell by 0.3 percent to 12,196 points in early trading.

Focus on automotive stocks

Meanwhile, investors’ attention was focused on automotive stocks and on Frankfurt, where the IAA will start with the press day. You should expect this in the coming days in the German mass media: glowing reports about fantastic electric cars and critical comments about the fact that the German car industry is simply not changing fast enough. We will see it in the interest shown at the IAA and in the sales figures. Of course, the e-strategy will have an impact on stock prices.

Dampers from China

Meanwhile, scepticism on the stock markets was fuelled by figures from Chinese industry, which had to make the biggest price cuts in three years in August. According to the statistics office in Beijing, producer prices shrank by 0.8 percent compared to the same month last year. Demand is therefore falling. The same picture was seen for cars, with sales stagnating in August.
As always, you can find an overview of all the data here: Market Mover
As a result, the CSI-300 in China fell by 0.4 percent to 3,956 points. A small report regarding the customs dispute was hardly noticed: Huawei Technologies withdrew its lawsuit against the US government for confiscation of equipment. In Japan, on the other hand, the Nikkei closed with a plus of 0.4 percent at 21,392 points.

Waiting in New York

Wall Street, too, had presented itself inconsistently the evening before. The Dow Jones closed 0.1 percent higher at 26,835 points. The S&P 500 left virtually unchanged at 2,978 points. And the Nasdaq Composite fell 0.2 percent to 8,087 points.

Break from Brexit Theatre

In Great Britain, the forced break of parliament will initially bring some peace and quiet to the Brexit Theater. Queen Elisabeth II enacted the law which obliges Prime Minister Boris Johnson to request a three-month postponement of the Brexit until the end of January if he does not reach a resignation agreement by 19 October. But Johnson wants to lead his country out of the EU at the end of October as planned, if necessary, even without an agreement. The British Parliament has also rejected Johnson’s request for new elections for the second time in a week. Now even the last voter on the island must have understood that the political functionaries in the parliament are not interested in the will of the people.

What is also stupid about the British voter: what country, still in a state of consolation, would risk leaving the world’s largest trade union and going it alone? Which state, relying on its own strength, would say goodbye to a political bloc that is milking it financially and imposing laws on it that do not suit it? Right: The United States of America in 1776. We quoted from a letter to the editor in an English newspaper. Otherwise, the opposition is likely to form during the five-week break, so keep an eye on the British pound situation on your trading platform.

This is what the day brings

Silently the lake rests on this Tuesday. There are no important big dates in the calendar, which speaks for a quiet trade. But even with small movements you can make good profits thanks to the leverage with CFD – even in small niches of the market.
At best the JOLTS data to the job offers in the USA could interest the Wall Street or the forex trade at 16.00 o’clock.

The 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.

Stock market trading graph

Brokers hope for cheap money

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09.09.2019 – Daily report. New Week, Same Game: Investors Hope for a Settlement in the China-USA Customs Dispute. And a further easing of monetary policy by the European Central Bank (ECB). Of course, the Federal Reserve will have to follow suit next week. So the level of fresh money is rising, which is raising stock prices.

Slight plus on the German stock exchange

The DAX also continued to climb moderately at the beginning of the week: on Monday morning it was 0.3 percent higher at 12,225 points. Since its interim low of 11,267 points in August, the DAX has thus gained almost 1,000 points.

Capital flood ahead

Cheap money is just addictive for more – shares as material assets are just like raw materials an insurance against the destruction of the intrinsic value of paper money. Most investors expect a further reduction in the penalty rate (currently: minus 0.4 percent) that banks have to pay for deposits with the central bank for the ECB Council meeting on Thursday. However, it remains to be seen whether the bond purchases will be continued – the central bank is apparently resisting the move.

It is also a foregone conclusion that the Federal Reserve will cut the key interest rate by 0.25 percentage points in the coming week. This applies not only to Frankfurt, but also to global trade. But beware: if hopes are disappointed, things will quickly go downhill. But if you trade CFD, it won’t scare you because you can go short.

Skid marks from the customs dispute

Investors in Asia also continued to expect an oversupply of liquidity at the beginning of the week. In the People’s Republic of China, the CSI-300 rose by 0.6 percent to 3,973 points. In Tokyo, the Nikkei 225 closed with a plus of 0.6 percent to 21,318 points – after all, this is the highest level since the beginning of August.

And this despite the fact that the tariff dispute is damaging the Asian economy: Imports to China fell sharply in August. Exports also declined, especially to the USA. Investors’ calculations: the government must intervene with stimuli and the Chinese central bank must ensure lower interest rates. Meanwhile, the trade conflict is also affecting the Japanese economy: Gross domestic product (GDP) rose by only 1.3 percent between April and June, projected for the year as a whole – according to preliminary figures, growth should be 1.8 percent. As always, you can find all the data here: Market Mover

New York looks at the Fed

Investors on Wall Street focused on their central bank on Friday. The Dow closed trading up 0.3 percent at 26,797 points. The weekly plus was thus 1.5 percent. The S&P 500 rose by 0.1 percent to 2,979 points on Friday. In contrast, the Nasdaq 100 fell by 0.1 percent to 7,852 points.
Fed Chairman Jerome Powell had said at a conference in Switzerland that the US Federal Reserve was observing a number of uncertainties, including trade conflicts. The Federal Reserve would “react appropriately to maintain growth”. But he also said: “The US economy is in good shape” and “the Fed is not forecasting a recession”. The latest data were as contradictory as these statements: Outside agriculture, 130,000 jobs were created in the US in August, slightly less than expected. However, wages rose slightly more than expected.

New Brexit capers

Meanwhile, the British pound could be exciting again – so be sure to keep an eye on your trading platform with the regular market updates. According to the Daily Telegraph, British Prime Minister Boris Johnson is working to prevent the Brexit shift Parliament is striving for. And this is how it works: Johnson would adhere to the law drafted by Parliament and ask the EU to postpone the date of departure. At the same time, however, he would explain in a letter that the government is against postponing the date beyond 31 October. According to ITV television, the opposition wants to request an urgent debate in parliament today. The government is to be forced to publish its plans for a Brexit without an agreement.
By the way, the matter becomes really turbulent when a case occurs that nobody is expecting yet: If the Queen does not agree to the postponement law passed by the House of Commons and the Lords, it will not come into force. Smile and wave and delay could also cause a stir. A strong volatility of the British pound would then be expected. If you read these lines, you will certainly know more about the Queen’s verdict.

And this is what the day brings

There are only a few important dates on Monday. One of them is consumer credit in the USA in July, which is reported at 9 pm.

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.

Stock market analyse

Money flood ahead – heading for the crash

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09.09.2019 – Special report. Everything is so harmonious again on the stock exchange: Customs negotiations between China and the USA are to continue in October. Closely related: The Federal Reserve, the Chinese central bank and also the European Central Bank will probably loosen monetary policy further in order to avert a recession. According to experts, it is precisely this approach and the resulting negative interest rate that are a real cause for concern. Reason enough to deal with the dangers slumbering in the background.

End game for paper money

This better not end badly: The devaluation of the money continues, believes the Chief Investment Officer of Blackrock, Rick Rieder. In the fight against deflation, the central banks would have to keep pushing down interest rates. The expert recently cited long-term, unstoppable developments on his blog as the reason for the scenario of the financial “endgame”.
Inflation, for example, peaked in 1979. Firstly, the baby boom had abated since then; secondly, the growth in women’s employment had fallen afterwards. Thirdly, Deng Xiaping had initiated globalisation with his reforms in China. We add: China has become the workbench of the world, and the entry of India and Russia into the world market has also significantly lowered the prices of many goods. And finally, according to Rieder, with the Iranian revolution, the inflation fueled by the oil price has disappeared – especially since OPEC committed itself to a reasonable price policy. Furthermore, new technologies such as the Internet and smartphones would have led to greater price transparency – ergo at falling prices, because consumers would be able to compare better.

No inflation, nowhere

Although major central banks used ever larger weapons in the fight against deflation, they appeared unsuccessful in their attempt to raise inflation to a mostly desired level of 2 per cent, the Blackrock CIO continued. With key interest rates falling, the supply of bonds with negative interest rates is increasing; quantitative easing has worked its way up from government bonds to corporate loans. The end game is currency devaluation, i.e. a “debase” – the growth of liquidity must exceed the growth in global gross domestic product. Turning away from such an extreme policy is very difficult, as the temptation of fiscal policy to take on new debts is on the rise. The devaluation spiral in interest rates also increases the risk of an open currency war, the expert commented.
The countermeasure for investors: Assets that retain their intrinsic value and cannot be printed. Ergo: stocks, real estate and commodities, such as gold. The worst alternative: government bonds with negative yields and cash, since both can theoretically be offered indefinitely.

Bankers warn against negative interest rates

In fact, top bankers are now also warning against the negative interest rate. The ECB’s move has led to an “absurd situation” in which banks no longer hold deposits, the head of the Swiss UBS, Sergio Ermotti, recently raged. This policy is damaging social systems and savings rates.

Christian Sewing, head of Deutsche Bank, also warned that further easing by the ECB would cause serious side effects. In the long run, negative interest rates will ruin the financial system, even though a new interest rate step will make refinancing easier for states, he said at an event of the “Handelsblatt” according to Bloomberg. Sewing also warned of a further split in society, as savers would be penalised – already paying 160 billion euros for negative interest rates – while share prices rose. Moreover, the central banks had hardly any tools left in their hands to effectively counter a crisis in the real economy.

The next big short

And even if the flood of money raises stock prices – this effect also harbours dangers. At least Michael Burry warned of this – and he can well estimate the possible disaster to come, as he was right a decade ago in the financial crisis. Burry went down in the annals with the book “The Big Short”. Recently Burry spoke extensively on “Bloomberg News”. His theses: Central banks distort the market, passive investments create the next bubble.
The recent flood of money in the direction of index funds has parallels with the bubble of collateralized debt obligations before 2008. Index funds are currently pumping up the prices of equities and bonds, just as the demand for CDOs had caused a pull in subprime mortgages a decade ago. In the case of CDOs, pricing in the market was not based on a fundamental analysis of collateral, but on massive capital flows that followed risk assessment methods that Nobel Prize winners found to be good, but which ultimately turned out to be wrong.
“The dirty secret of passive index funds (…) is the distribution of the dollar value traded daily among the securities within the index,” Burry said. And: The flow of money will be reversed at some point. As with all bubbles, “the longer it takes, the worse the crash will be.

Here you will find protection

Burry, who currently manages about $340 million at Scion Asset Management in Cupertino, California, also had concrete advice for investors. He added that he likes small caps – which are underrepresented in passively managed funds and thus undervalued. In Japan, for example, there are many undervalued small companies with high cash or equity cushions. Another concrete tip: In Japan, the large exchange-traded funds in particular are better protected against global panic than other funds, as the Japanese central bank is particularly heavily invested in large ETFs.
No matter whether you trade CFDs or trade stocks online – you should definitely keep an eye on the issue of money devaluation by the central banks. The flood of “fiat money” has concrete consequences for commodities, bonds and equities if the bubble really bursts.

The Bernstein Bank wishes you 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.

Trading Analyse

Shareholders waiting for US job data

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06.09.2019 – Daily report. Joy in global trade: Customs negotiations between the USA and China are to continue in October. The news from the previous day will also have an effect on the Asian stock markets on Friday. However, investors in Frankfurt are keeping their powder dry before the important US job data in the afternoon.

DAX slightly up

Now the sun is shining vainly again: After yesterday’s confirmation of new customs negotiations by the Chinese administration, the world looks much better again. The DAX rose by 0.3 percent to 12,168 points by Friday midday, thus remaining above the 50-day line. Yesterday, the indicator climbed by 0.9 percent to 12,127 points – the highest level for five weeks. Germany’s leading index thus gained around 600 points within nine days.

The investors, who had become brave again, also quickly got a new bad news from the German industry: In July, German production surprisingly shrank by 0.6 percent. All important data can be found here: Market Mover

Joy in Asia

The prospect of a settlement in the trade dispute also pleased the Asian stock market. In China, the CSI-300 gained 0.6 percent to 3,949 points. In Japan, the Nikkei 225 took its leave with a plus of 0.5 percent at around 21,200 points into the weekend – the weekly plus thus amounts to 2.4 percent. No miracle, because yesterday also an Insider from China in things customs controversy hoping added: Hu Xijin, editor-in-chief of the state “Global Times” twittered that there were now more opportunities for a breakthrough in customs talks. The journalist is regarded as the mouthpiece of the Communist Party.

Profits in New York

Ergo also applauded Wall Street. The Dow Jones gained 1.4 percent to 26,728 points – in the course of trading, the leading US index passed the 26,800 mark for the first time in over a month. The S&P 500 rose by 1.3 percent to 2,976 places, the Nasdaq 100 climbed by 1.9 percent to 7,863 points. All major US indices have now left the sideways range and jumped above the 50-day moving average.

Yesterday’s strong ADP report was also a source of joy. According to the labor market service provider, the private sector in the United States had created more jobs in August than had been hoped for. Furthermore, the US industry showed strength with its order data in July and the mood in the service sector brightened surprisingly strongly in August. In the new optimism, gold and silver were less in demand again.

Focus on Fed and labor market report

Only a few important dates are on the list today. It gets exciting at 2.30 p.m. when the US Labour Market Report for August is shown on the screens of your trading platform.
The job data will also be of interest to the Federal Reserve. It will decide on possible rate cuts on September 18. Perhaps Fed Chairman Jerome Powell will be carried away by a commentary in the evening. He is taking part in the conference “The Economic Outlook and Monetary Policy” in Switzerland, which starts at 6.30 pm. According to the Wall Street Journal, the Fed is likely to cut interest rates by 25 basis points in two weeks’ time. Let’s wait and see.
The Bernstein Bank wishes you successful trades and a relaxing weekend!

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.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.