23.05.2019 – Daily report. The bears determine what happens on the Frankfurt Stock Exchange. The ifo index disappointed. Once again, scepticism about the outcome of the customs dispute between China and the USA gained the upper hand in global trading. Washington is likely to put further Chinese companies from the security sector on the black list.
Investors fear stocks
Weak stocks; Japanese yen, Swiss franc and US bonds firm: roughly speaking, this is the typical pattern on the trading floor when worries about a Chinese-American trade war take over. The DAX slipped by almost two percent by noon. At least at Daimler there is an all-clear for the investors: The stock slipped mainly because of the dividend payout. The situation is less good for Deutsche Bank shares: on the day of the Annual General Meeting, the share price hit a record low of 6.35 euros.
Ifo index disappointed
The Ifo index provided food for the bears: the business climate fell from 99.2 to 97.9 points, the second time in a row. Most analysts had expected only a slight drop to 99.1 points. The mood among the 9,000 managers surveyed is therefore poor. “The German economy continues to lack momentum,” commented Ifo President Clemens Fuest.
Customs dispute continues to weigh on the economy
However, the customs dispute between China and the USA remained the determining issue. According to media reports, Washington is investigating whether it will blacklist at least five other Chinese companies in the security sector. Reactions in the Chinese state press also suggested an escalation.
Previously, Asian investors had positioned themselves accordingly on the sell side: The Nikkei lost 0.6 percent to 21,151 points and the CSI 300 even lost 1.8 percent to 3,584 points.
Wall Street also closed Wednesday in the red. The Dow Jones index closed 0.4 percent lower at 25,777 points. The broader S&P 500 fell 0.3 percent to 2856 points. The composite index of the technology exchange Nasdaq lost 0.5 percent to 7,750 points. The minutes of the last meeting of the US Federal Reserve hardly moved the prices. As expected, the Fed is sticking to its cautious monetary policy.
May probably on the verge of collapse
Meanwhile, forex traders are once again looking to Britain. According to “The Times”, the unfortunate Prime Minister Theresa May wants to announce her resignation this week. The probable date for her resignation is tomorrow, Friday. Conservatives will probably experience a violent debacle in the European elections and the Brexit supporters will triumph. Against the dollar, the pound slid to 1.2608 dollars, its lowest level since January.
This is what the day brings
The Thursday schedule is well filled. At 2.30 p.m. German time, for example, the weekly US first-time applications for unemployment benefits are being made via the tickers. At 3.45pm the Markit Purchasing Managers Index Service for May follows, ditto the manufacturing index for May. New US construction sales are scheduled for 16:00 in April.
The Bernstein Bank wishes successful trades!
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