Caution on Triple Witching Day

Bernstein Bank Stock Market

 

15.03.2019 – Daily report. The stock market can be as deceptive as a mirror-smooth lake before the thunderstorm: In early trading on Friday, the DAX was largely motionless. But it would be a miracle if the usual hectic to the big expiration day failed to appear this time. The first trading hours remaind calm because of the ongoing dispute over Brexit and the customs dispute between China and the USA.

Silence before the Storm

In the morning, the DAX oscillated slightly above the 11,600 mark. But that could only be the silence before the storm: At noon and in the evening, the Eurex futures and options exchange is facing the big quarterly decline. Futures and options on equity indices will initially expire on the so-called “Triple Witching Day”. At the close of trading, futures and options on individual stocks will expire. Since the DAX has oscillated between 11,500 and 11,700 over the past few days, this might likely be the limits of movement. Thanks to free real-time prices in your trading platform you can easily observe the movements.

Trouble in Asia for Wirecard

Wirecard had to endure a completely different kind of turbulence: According to a report in the “Handelsblatt”, the authorities in Singapore have set their sights on Wirecard’s Indian subsidiary. Investigations are underway against Wirecard employees and several companies of the Group on money laundering and document forgery, among other things.

Beijing Sets People into Buying Mode

The Chinese leadership sent even more pleasant news about the tickers: Prime Minister Li Keqiang brought new stimuli into play on Friday at a press conference at the end of the People’s Congress. Specifically, he thought out loud about lower interest rates and lowering the minimum reserve requirements for banks – it determines how much money credit institutions have to deposit as collateral with the central bank. He went on to say that China would not allow waves of redundancies. As a result, the Chinese blue-chip index CSI 300 gained 1.3 percent to 3745 points. In Japan, the Nikkei 225 climbed by just under 0.8 percent to 21,451 points.

Disillusionment in Customs Dispute

Wall Street was largely lethargic on Thursday. At the end of the trading session, the Dow Jones recorded a barely noticeable plus of 0.03 percent to around 25,710 points. The collective index S&P 500, on the other hand, fell by 0.1 percent to 2808 points. And the Nasdaq 100 fell by 0.2 percent to 7243 points.

The news that arrived was more of a show stopper: the number of new buildings sold had fallen surprisingly in January. On the other hand, the weekly initial applications for unemployment benefits increased more strongly than expected. According to news agency Bloomberg, the hoped-for customs agreement between China and the USA is unlikely to continue this month. US economic advisor Larry Kudlow thought it possible to reach an agreement by April at the weekend.

Perhaps today’s economic data will be able to bring some momentum into the trade: At 2.15 p.m. the Federal Reserve will speak on industrial production and at 3 p.m. the University of Michigan on the consumer climate.

New Pirouette at Brexit

And what’s going on with the British pound? The situation here has been defused for the time being. Yesterday, Thursday, the British MEPs voted to postpone the departure from the EU, which was originally scheduled for 29 March, by a maximum of three months. However, the House of Commons must agree to the final agreement with the EU by Wednesday. It is precisely this agreement that MEPs have already twice rejected. So it is clear that nothing is clear. But at least the tension remains. We wish you successful trades!

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