06.12.2019 – Daily Report. Investors are also puzzling as to how the customs dispute between China and the USA will continue. In the morning, however, positive news arrived from Beijing. Previously, industry data from Germany had dampened the buying mood. Now the focus is on the job report from the USA in the afternoon.
Moderate plus for the DAX
The German stock market indicator recently remained up 0.2 percent at 13,083 points. The pre-market situation had looked better, but then the figures for German industrial production began to show up. Companies in Germany surprisingly cut back their production in October for the second month in a row. All in all, industry, construction and energy suppliers produced 1.7 percent less than in the previous month. Fears of a recession were circulating again immediately.
Good gesture from Beijing
Meanwhile, China sent out a signal of relief. On Friday morning, Reuters announced that Beijing had announced the lifting of some import duties on soy and pork from the USA. The decision is based on applications from individual US companies, the Ministry of Finance announced. However, there was no statement about the volume of imports.
Focus on soya and pork bellies
In general, traders should concentrate on soy and pork – because they are in the eye of the customs storm. On Thursday, the Wall Street Journal reported that agricultural imports were the crux of the negotiations. US President Donald Trump expects Beijing to place an order of 40 to 50 billion dollars with US farmers in the near future. Last year, however, China had only bought goods worth 8.6 billion dollars. Moreover, according to insiders, the Chinese leadership must publicly announce these purchases without any evasion with reference to the market situation or other trade obligations. So Trump wants to nail China down – we are curious.
Rising prices in Asia
Investors in China apparently believe that an agreement will be reached before the December 15 deadline if the new US tariffs are to affect Chinese products. Red chips in the CSI-300 rose by 0.6 percent to 3,902 points. The Nikkei went into the weekend with a plus of 0.2 percent at 23,354 points. This is a weekly gain of 0.3 percent.
New York remains stable
US investors were also moderately optimistic on Thursday. The Dow Jones Industrial rescued a 0.1 percent gain from the target line and closed at 27,678 points. As expected, the recently ripped downward gap in the Dow is now almost completely closed. It is always astonishing how much one can rely on the basics of chart analysis. By the way, the 50-day line, which runs at 27,243 points, now attracts investors from below. The S&P 500 closed yesterday 0.12 percent higher at 3,117 points and the Nasdaq 100 gained 0.1 percent to 8,308 points.
Cutting hopes for Crude Oil
Meanwhile, you should keep an eye on regular oil market updates and market access open. There is another production cut in the pipeline. Russian sources told the news agency Tass that there will be a further cut in production in the first quarter of 2020. The cap is to be raised from 1.2 million barrels to 1.7 million barrels. There will now be bilateral talks on this – and probably also on the question of whether the cheaters will also stick to their quotas. We are curious. The market obviously does not trust the alleged deal, WTI gave 0.1 percent down to 58.37 dollars, Brent changed hands unchanged for 63.38 dollars.
This brings the day
The calendar on Friday is quite well filled, you can find the overview as always here: Market Mover
The main date will be at 2:30pm the U.S. labor market report for November.
At 4:00pm the consumer confidence of the University of Michigan will follow.
At the same time the stocks of the wholesale trade are coming in.
The Bernstein Bank wishes successful trades and a relaxing weekend!
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