13.11.2019 – Daily Report. More of the same in the matter of customs disputes – negotiations are underway; however, new US punitive tariffs on Chinese products are certainly possible if the deal goes ahead. For the frugal Wall Street stock market players, this is enough for a new final record in the Nasdaq Composite and a high in the S&P 500. But the DAX is crumbling in early trading, especially as US punitive tariffs against the EU continue to threaten. Investors are now turning their attention back to the Fed.
Frankfurt resigns
Investors in the German stock market were hesitant to invest on Wednesday morning. The DAX recently slipped by 1 percent to 13,145 jobs. On the previous day, the stock market indicator had once again reached a new annual high of 13,308 points. The brokers analysed this on the one hand and on the other hand by US President Donald Trump on the previous evening – in the end it was too little for investors.
A nose for China and Europe
To China, the Potus (President of the United States) said in the Economic Club of New York that a treaty could soon be concluded. However, Trump would only agree if he was good for the USA. A concrete timetable for a conclusion also remained open. If there was no agreement, US tariffs on imports from the Middle Kingdom would be significantly increased.
The tone was rather unconciliatory after the recent conciliatory tones: since China’s entry into the World Trade Organization in 2001, no one has cheated better than China, Trump said. However, the president blamed the former US administrations in particular for this, as they had ultimately caused damage to American workers, especially in the manufacturing sector. In fact, Trump has a point here: if you leave the trendy places on the east and west coasts such as Nantucket or Beverly Hills behind you, you will see misery and hardship. Former industrial champions like Detroit or Baltimore are more like African slums in some areas than cities of the leading economic nation.
There was no all-clear for Europe. Many brokers had hoped that Trump would announce a shift from punitive tariffs to car imports from Europe. That was not the case. The President also said that trade talks with the EU will be much more complex than with China. This was another reason why EURUSD slipped to 1.10 in the morning.
Losses on the Asian stock markets
In Asia, the continuing protests in Hong Kong also unsettled the stock market. All schools in the Chinese special administrative zone are to remain closed tomorrow. The Hang Seng index fell by 2.1 percent to 26,508.74 points. The CSI-300 dropped 0.1 percent to around 3,900 points. In Tokyo, the Nikkei 225 slipped by 0.9 percent to 23,320 points. Previously it had risen for seven days in a row.
New York remains optimistic for the time being
De Börsianer in New York had rather pulled the positive news out of the Trump speech. The Nasdaq Composite closed 0.3 percent higher and closed at an all-time high of 8,486 points. Previously, it had reached a new high in the course of the day, just like the S&P 500, which for the first time passed the 3,100 mark. In the end, the S&P 500 gained 0.2 percent to 3,092 points. The Dow Jones closed unchanged at 27,691 points. The price for the troy ounce of gold plunged to 1,446.19 dollars in view of the continued appetite for risk, but recently recovered again to 1,462.92 dollars.
Tax cut delights Wall Street
What remains is an issue that has been rather lost in this country so far, although it explains the strength of Wall Street and the dollar. The White House’s Trump team has recently started discussing a tax cut to 15 percent, which would help the middle class and should have a positive impact on Trump’s re-election. In particular, advisor Larry Kudlow, head of the National Economic Council, supports the issue, as the Washington Post reports on Tax Cut 2.0. Since budget sovereignty lies with Congress, republican MPs would of course also receive a tailwind from the idea, which is why the first proposal of this kind – with an average of 10 percent – disappeared again in the push country after the Democrats’ victory in the Midterms. There are currently seven levels in the income tax – 10, 12, 22, 24, 32, 35 or 37 percent. Of course, a flat tax would push consumer stocks and car stocks and ultimately the entire economy and the U.S. stock market. So you should keep an eye on the issues on your trading platform.
Bitcoin for concrete gold
And last but not least, a factlet that should interest Bitcoin traders: The crypto currency seems to be gaining confidence. On November 1, real estate tycoon Ben Shaoul sold a condo in the Upper East Side of Manhattan for 15.3 million dollars – payable in Bitcoin. This has reported the magazine “The Real Deal”. According to the magazine, the head of the Magnum Real Estate Group sold the apartment to the Taiwanese company Affluent International. Someone probably doesn’t trust the dollar. Bitcoin last changed hands for 7,981.55 euros.
This is what the day brings
The diary contains some interesting events, you can find the overview here as always: Market Mover
When you trade CFD, it gets really interesting at 5pm. Fed Chairman Jerome Powell then addresses the Congressional Joint Economic Committee. Tomorrow he will appear before the House Budget Committee. This could move the stock prices on Wall Street, US Treasuries and the Dollar strongly – which doesn’t scare you if you use powerful servers at Germany’s best CFD brokers – but please with a Bafin license.
US consumer prices will be announced at 2:30pm in October.
At the same time, the US real incomes in October are being reported via the ticker.
The Bernstein Bank wishes you successful trades!
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