17.06.2019 – Daily report. The German stock market is making slow progress. The stock market remains under cover before the Fed meeting in the middle of the week. Deutsche Bank is also causing eyebrows to rise. And even in the customs dispute between China and the USA, there were no arguments for brokers to buy.
Wait and see because of Fed and customs dispute
The beginning of the week has provided an interesting bouquet of information for worldwide trade. The news first had to be processed – the DAX worked its way up by a moderate 0.2 percent until Monday midday. The Deutsche Lufthansa share plummeted by double digits – the reason being a harsh profit warning.
In addition, US Secretary of Commerce Wilbur Ross dampened hopes for a large trade agreement between the USA and China before the G-20 summit in Japan at the end of the month. He told CNBC that the question of enforcing an agreement was the most important element of a possible deal. The most important outcome of the summit could be that both sides renegotiate at all.
In addition, many investors were in a sideways stance ahead of the Federal Reserve’s press conference on Wednesday. Most analysts expect the Fed to verbally prepare investors for a rate cut in July at its press conference after the Open Market Committee meeting.
It was precisely for these reasons that Asia was on the spot: In Tokyo, the Nikkei 225 bid farewell almost unchanged at 21,124 points. In China, the CSI-300 closed unchanged at 3,655 points.
Deutsche Bank disposes of toxic assets
The only thing that remains is a look at Deutsche Bank – it reminded investors that the financial crisis is apparently far from over. According to a report in the “Financial Times”, the bank, which is possibly on the verge of nationalisation, is planning to set up a bad bank worth billions. Assets with a volume of up to 50 billion euros are likely to be included in this bank, the paper reports with reference to insiders.
The outsourced assets will be mainly long-term derivatives. And it goes even further: outside Europe, the bank wants to significantly shrink or even completely close its stock and interest trading business. We ask ourselves: Who will bear the costs of the bank if this toxic waste dump is closed down without a sound? Could it be the German taxpayer? The stock market was pleased with the news – the share price has risen recently.
No tailwind from New York
Wall Street did not send out any impulses for the DAX on Friday. The Dow Jones closed 0.1 percent lower at 26,090 points. The market-wide S&P 500 fell by 0.2 percent to 2887 positions. And the Nasdaq 100 lost 0.4 percent to 7,479 points. Data from retail and industry were good. On the other hand, the consumer sentiment survey conducted by the University of Michigan had deteriorated somewhat more than analysts had forecast.
Bitcoin in demand again
There is still a look at the crypto currencies. The virtual parallel currency Bitcoin has just climbed above the 9,000 dollar mark for the first time in 13 months. The reason for this is speculation that Facebook wants to introduce its own currency.
This is what the day brings
Monday brings otherwise only few important dates. The Empire State Manufacturing Index is due for June at 2.30pm. And the European Central Bank announces at 3.45 pm the change in the Eurosystem central banks’ holdings of government bonds, covered bonds, corporate bonds and asset-backed securities.
Bernstein-Bank wishes you successful trades!
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