US balance sheet season and Beijing dominate

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15.04.2019 – Daily report. Investors in Frankfurt are digesting the positive news from the previous week. In early Monday trading, there was initially little movement on the trading platform, the real-time prices hardly flashed. The US big banks JPMorgan Chase and Wells Fargo had delivered encouraging figures on Friday. More heavyweights are expected today. But once again, the Chinese-American tariff dispute dominated.

DAX at 12,000

At the beginning of the week, Germany’s leading index again danced around just below the 12,000 mark. Last Friday, the DAX had marked a fresh annual high of 12,031 points, rather discreetly. There was also a tense wait in global trade due to the negotiations in the customs dispute between China and the USA.

The last round

Statements by US Treasury Secretary Steven Mnuchin were positively received: he said at the weekend on the sidelines of the IMF spring meeting in Washington that the efforts of the two countries would go far beyond what had been achieved in recent years in terms of trade agreements. The politician also added that he was full of hope that “The final round would soon be ushered in”.
Meanwhile, the US broadcaster CNBC, referring to unnamed insiders, reported that the US had withdrawn its red line a bit because of fierce resistance from Beijing. According to this, China is partoutly refusing to reduce subsidies for its industry as much as Washington demands. The Chinese leadership is granting this support to large state-owned corporations and industries that are considered strategic. The competitive advantage puts American and other foreign firms at a disadvantage.

Asia hesitant

The stock markets in Asia initially received the news positively, before scepticism spread again. The CSI 300 was up until shortly before the close, but finally closed at minus 0.3 percent at 3,976 points. The Hang Seng also slipped into the red in the last trading hour, also losing 0.3 percent to 29,811 positions. In contrast, the Nikkei 225 rose by 1.4 percent to 22,169 points.

New York bullish

The New York specifications had been positive for the cops on Friday. At the closing bell, the Dow Jones recorded a gain of around 1 percent to 26,412 points. The Walt Disney share presented itself as a real price rocket in the Dow – it shot up by 11.54 percent. The stock reached an all-time high in the course of the year because the Group is now entering the video streaming business with a fighting spirit. Accordingly, Netflix lost more than 4 percent.
The S&P 500 gained 0.7 percent to 2907 points on Friday. The market-wide index thus came within reach of its high of just under 2941 points in September 2018. The technology index Nasdaq 100 rose by 0.4 percent to 7628 points.

Convincing banks

The main event on Friday was the figures of two financial giants. The largest of the US banks, JPMorgan Chase, opened the first quarter balance sheet season and once again convinced investors. The financial group outperformed estimates in almost all areas. Wells Fargo also beat analysts’ forecasts, but lowered this year’s net interest income forecast in the conference call. The bank blamed this on the Federal Reserve’s persistently low interest rate. The results of the major banks are regarded as an important economic indicator.
Thus, on a rather dull day with economic appointments, investors look forward to the next balance sheet events. On Monday, the next heavyweights are Goldman Sachs – expected at 1.35 p.m. German time – and Citigroup (2 p.m.). If anything, the Empire State Manufacturing Index for April, which is due to start at 14:30, could attract even more interest.
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