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The Italian capital market and negative overseas conditions burden today’s trading

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19/10/2018 – 12:00: After the German leading index had to leave its mark on yesterday’s trading day and closed the day with a minus of 1.1 percent, the targets for today’s trading day are also difficult.

After the German leading index had to leave its mark on yesterday’s trading day and closed the day with a minus of 1.1 percent, the targets for today’s trading day are also difficult.

The US stock markets seamlessly absorbed the poor trading performance in Europe and also had to struggle with some worse than expected balance sheet figures. As a result, the Dow Jones Index fell by 1.3 percent. The broader S&P 500 Index lost around 1.4 percent. Similar scenes took place on the Asian stock markets where the Japanese Nikkei Index lost 1.1 percent in the course of trading.

Like the entire trading week, investors and analysts are focusing on the yields of Italian government bonds, which provide information about the current situation in Italy. Yields on 10-year government bonds rose to around 3.74, the highest level in the past four years. This could cause some investors to have bad memories of the European financial crisis. The background for the rise in bond yields could be the explosive mix of the government in Rome, where the right-wing populist camp currently wants to cut taxes and the left-wing populist camp wants to increase government spending.

As a reaction, the European currency fell in price and is currently trading 0.1 percent lower at 1.1443 USD.
On the technical chart side, the battle for the important 11,800-point mark in yesterday’s Dax trading was won by the bears. For about 18 months this mark served as chart technical important support. The next relevant support level could be the low for the year to date at a level of 11,458 points.

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.

Premature Hope

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01/10/2018 – 11:00: Dax with a friendly start in the trading week – focus on Italy and UK .

Against the backdrop of positive specifications from the Asian stock markets, the German Dax is starting the new trading week with tailwind. At 12.318 points, the Dax is currently around 0.6 percent higher.

After the harsh losses at the end of last week, investors seem to be somewhat more upbeat at today’s beginning. This is all the more remarkable as there has not been much change in the current situation. The dominant topics of the trading week are likely to continue to be the upcoming Brexit, in addition to Italy’s debt sustainability. Italian Finance Minister Tria will have to answer questions on the Italian nation’s situation tonight at the Eurogroup meeting in Brussels. In the United Kingdom, Prime Minister May’s conservative camp is discussing the all-dominant Brexit issue at a party conference.

Nevertheless, today the Japanese Nikkei Index was able to climb to 24,306.54 points, its highest level since November 1991. The strongly export-oriented Japanese economy can profit from a sustained weakness of the Yen.
On the economic and economic news side, investors and analysts expect the Purchasing Managers’ Indices for the German industry and the Euro-Zone to be released this week. Various purchasing managers’ indices will also be published across the Atlantic.
The European single currency is currently trading at USD 1.1598, almost unchanged.

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.

Premature Hope

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16/08/2018 – 16:00: After the „Risk-Off“ trading yesterday as equities, commodities, Euro & Co. recorded significant price declines on, today the picture clears up again.

In the early hours of the morning, news agencies were tickled by the news that a Chinese delegation would travel to the US at the end of August to resume the dialogue on the trade restrictions, imposed by the Trump government on Chinese goods and services. The invitation was issued on the initiative of the US after the trade talks were abandoned without any result about two months ago. The markets used this message to switch back to “Risk-On” mode.

Equities and commodities rose accordingly, and the Euro recovered from the sharp losses of recent days against the US-Dollar. However, the risk markets are coming out of an oversold situation and so today’s rally may seem to overlook the fact that the talks are not at the highest level of government, but at best at the lower level of government.
The aim of the talks is to find out whether there is a need for discussion at the highest level of government. Let alone the content, because there are concrete things about the possible timeframe so far. So, we are still left with pure hope – and this could soon be disappointed again if the talks are repeated – to prove fruitless. Then it’s gonna be “Risk-Off” again.

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.

Turkish Lira continues to crash

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10/08/2018 – 15:00: The collapse of the Turkish lira is going to continue. Only today, Friday, the Lira lost up to 12% in value against the U.S. dollar.

For the current year 2018, the loss in value amounts to 35%. These turbulences are also spreading to the interest rate market. 10-year bonds are now yielding 20%!
The market is increasingly losing faith in the promises made by President Erdogan and his Finance Minister Albayrak, who is also his son-in-law, to boost the economy and “implement a new economic model”. In addition, the ECB is concerned about the exposure of European banks in the Turkish currency. The worries are not entirely unfounded. As reported in the Financial Times, UniCredit (Italy), BNP Paribas (France) and BBVA (Spain) are “significantly exposed” in Turkey. Whether President Erdogan’s appeal helps the lira may be doubted. He suggests “take dollars, euros and gold out of his pillow and bring them to the bank!”

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.

Rising yields before the US-Fed meeting

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01/08/2018 – 17:00: The Federal Reserve (Fed) is meeting today (Wednesday) to discuss the future of the interest rates in the US.

The US-economy is booming, which is good for corporate profits (see the results of Apple from yesterday as an example), but the boom is less good for the interest rates. Just on the day of the Fed meeting, the 10year yield on US-Notes rose to the “magic” level of 3.0%. This value was last seen in 2013 – but only for a short period of time. Rising yields have an impact on the real economy through the credit channel as financing costs for companies and consumer credits are rising.
But rising yields also impact the financial markets – in absolute and relative terms. They make share prices more expensive, since present values are falling due to the increased discount-factor and a “low” profit/loss ratio (P/E ratio) for shares suddenly no longer appears to be so “low” with rising yields, because the corresponding P/E-ratio in the bond markets suddenly makes an investment in bonds more attractive.

So it will be exciting to listen to the comments of the central bankers this evening. In chart terms, the US-yield could break out to 3.5%. Incidentally, Germany does not currently have these concerns: The federal bond was last quoted at 3% in 2011, currently the yield is 0.6%. Thanks to the ECB!

 

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.

Trade dispute puts pressure on sentiment – Dax with weaker start

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20/07/2018 – 11:00 am: On the last day of the trading week, the leading German index opened with a slight drop of 0.2 percent and currently stands at 12,665 points.

The reason for the opening is, in addition to the negative targets from the USA and the Asian stock markets, the continuing negative trading dispute between the USA and China as well as between the USA and Europe. The recent statements by US President Trump to impose higher import duties on European cars forced the European Union to take further retaliatory action in this case. The mood on the investor side should therefore be described as tense. The Dow Jones Index dropped 0.5 percent in reaction to yesterday’s trading session. The Japanese Nikkei Index suffered a discount of 0.3 percent.

The European single currency recently gained some ground on the currency markets and is currently trading at the previous day’s level of USD 1.1638. On a weekly basis, the current quotation represents a decline of around 0.3 percent.
On the economic and business news side, the situation remains quiet until the publication of Canadian consumer prices over the course of the day.

 

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.

Dax with a friendly start to the last trading day of the week

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13/07/2018 – 10:00 am: At the start of trading on the last trading day of the week, the German share index is in good shape. The stock market barometer is currently trading at 12,551 points, an increase of around 0.5 percent.

The background for the friendly start is likely to be good targets from yesterday’s US trading session. The S&P 500 gained around 0.9 percent in yesterday’s trading. This movement was seamlessly absorbed by the Asian stock markets, so that the Japanese Nikkei Index recorded a brilliant 2.0 percent increase at the close of trading.
Today’s dominant theme is likely to remain the dispute over tariffs in global trade. In this context, the forthcoming publication of the quarterly figures of the listed companies and the question of whether the effects of the customs disputes could already be apparent will be of interest. Today, JP Morgan and Citigroup, two heavyweights of the US banks, are providing insights into their books.

On the economic data side, investors and analysts are focusing on the University of Michigan’s US consumer confidence data presented this afternoon. Analysts forecast a value of 98.1 points. A higher than expected figure is likely to indicate greater consumer optimism and good sentiment in the US economy.

 

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.

Dax can curb the heavy weekly losses

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22/06/2018 – 11:00 am: At the end of a week of selling pressure, the leading German index may slow down its losses. Nevertheless, the Dax ended its worst trading week since March this year. At 12.542 points, the index is currently up by around 0.4 percent.

In addition to the open trade dispute between the USA and China and Europe, the main negative factors are the resurgence of the European single currency. Against this backdrop, investors sold their shares this week and brought the Dax a respectable minus of a good 4 percent. In the previous week, the Dax was still able to pass the 13.000 point mark. At the moment, the 12.500 point mark seems to provide some support.

The Euro can make strong gains on today’s trading day and is up half a percent at USD 1.1645. Such a constellation may cause stomach ache for export-oriented companies from the Euro zone as their products become more expensive abroad. Currently, however, at least the German economy still seems to be stable. Recent economic data in the form of recently published purchasing managers’ indices gave investors and analysts a positive surprise. The purchasing managers’ index for the services sector, for example, rose by 1.8 percent to 53.9 points. A value above the 50 mark is interpreted as a positive signal for an expansion of production activities.

As far as commodities are concerned, investors are concentrating on today’s meeting of the OPEC nations. Today’s meeting could focus on the decision to increase production. In the run-up to the meeting, the oil price of WTI (West Texas Intermediate) rose by 1.1 percent, so that one barrel is currently traded at 66.24 US dollars.

 

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.

Dax with weaker start into the week – trade disputes weigh on earnings

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18/06/2018 – 10:00 am: At the beginning of the week, the German stock market barometer is showing little momentum and is currently down by around 0.5 percent at 12,949 points. The most recent trade disputes between the USA and China are disruptive fires.

The development of recent trade sanctions between the US and China may put global investors in a nervous mood. Unfortunately, there currently seems to be a spiral of sanctions and countermeasures, so that investors in the Asian markets are exercising restraint at the beginning of the week. The Japanese Nikkei Index has dropped by 0.8 percent to around 22,680 points.

Against this backdrop, the common European currency has fallen back below the 1.16 USD mark, so that one euro costs 1.1576 dollars at the moment. The main influencing factors for the euro today could be the disputes within the German government on the current issue of asylum policy.

On the side of the economic and business reports, things remain rather quiet over the course of the day. Another speech by ECB President Mario Draghi this evening could be interesting.

 

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.

Dax in the profit zone despite G7 scandal – central bank week on the horizon

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11/06/2018 – 11:00 am: The leading German index starts the new trading week with a successful start and is currently up 0.5 percent at 12,837 points. This is all the more remarkable looking at the current news situation. The main topics of the week are likely to be the G7 scandal surrounding US President Trump last weekend and the upcoming meeting between Trump and North Korean head of state Kim Jong Un. In addition, two central bank meetings will take place during the week, which are also likely to be the focus of investors and analysts worldwide.
After the US President left the G7 Summit in Canada last weekend early and, after his departure, rejected the summit’s Community declaration, global trade relations are likely to deteriorate further. Trump’s “America first” policy is likely to cast further doubt on the reliability of the US as a trading partner.
Against the background of tomorrow’s meeting between Donald Trump and Kim Jong Un in Singapore, investors exercised restraint on the Asian stock markets at the beginning of the week. Although the Asian stock markets recorded slight gains, market players seem to be cautious with larger positions in the run-up to the meeting.
The markets are looking forward to the two important meetings of the central bank during the week. On Wednesday the US Federal Reserve announces the current key interest rate and analysts expect interest rates to rise from 25 basis points to 2.0 percent. The following Thursday, the President of the European Central Bank, Mario Draghi, will discuss the situation regarding the European Economic Area and monetary policy. At the subsequent press conference, Draghis statements on the ECB’s investment purchases are likely to attract particular attention.

 

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.