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Now, after months of confrontation in the trade dispute, there is a clear sign of looseness. US President Donald Trump wants to resolve the conflict with China after a report in the media later this month. After Trump's tweet of the day, reports suggest that the US president has already asked his administration to work on a draft treaty with China. "Trump leads, markets play the game", Jochen Stanzl, market badyst, CMC Markets, quoted on finanztreff.de.
The signals also raise the prices of European equities Friday noon. The DAX increases from 1.67% to 11.659 points and reaches its highest level in two weeks. The Euro-Stoxx-50 gained 1.33% to 3,246 points. The FT-SE-100 of the London Stock Exchange rose 0.86% to 7,176.12 points.
Previously, the Tokyo Stock Exchange had already conducted a catch-up hunt. The Nikkei-225 index closed at 556.01 points, or 2.56%, at 22,243.66 points. Asian benchmarks rose sharply – the Hang Seng Index on the Hong Kong Stock Exchange jumped ahead. Hong Kong's Hang Seng Index was extremely strong, registering an impressive rise of 4.21%.
With the announcement of Trump, investors are increasingly willing to take risks: the bond markets are suffering from stock movements. Even in technology stocks, therefore, shows no negative reaction to Apple's prospects. Apple's share fell after seven hours, peaking at 7%. The hope of an agreement with China will alleviate this problem, but strong, he says in the trade. In addition, the numbers were good. the future lack of transparency has been criticized.
Waiting for the American labor market
The Stoxx Technology Index increases by 2.1%. The European car index is even stronger, with a rise of 3.7%.
However, market players are now waiting for the US labor market report, to be released in the afternoon. Most importantly, market participants fear a higher interest rate hike in the United States as a result of faster inflation, driven by the cost of labor.
Witness day for banks
Credit institutions know today, Friday night, how they isolated the supervisors during the recent stress test. Once again, the focus is on Italian homes, which are still sitting on a huge mountain of bad debts, even ten years after the start of the financial crisis. The results will be published by the European Banking Authority (EBA) and the European Central Bank (ECB) at 18.00.
A total of 48 banks from 15 EU countries and Norway have been examined in recent months. They had to prove with the Fitnessscheck that they had not fallen, even in the event of a serious recession, and that they had sufficient capital reserves. From Austria, Erste Group and RBI have been audited. Special attention is given to Italian banks. Not only do they have a mountain of problem loans in their books where customers are struggling to repay.
Analyst: the economy threatens the phase of weakness
For now, however, volatility and uncertainty in capital markets over the past few weeks will not change much. Expect the experts at J.P. Morgan Asset Management. "The figures for the main economic indicators have deteriorated a bit," said Tilmann Galler, financial markets strategist at JP Morgan Asset Management in Frankfurt. This suggests that a phase of weakness in the economy is imminent. The current political risks, be it Italian budgets, Brexit or the contrasting situation surrounding the US-China trade dispute, have disrupted investors. "
And even though he argues that the risks of recession are low for the next twelve months and that neither the Italian budget nor the discussions on the British Brexit should cause major disruptions in the markets, investors should consider taking into account account the increased volatility at the end of the cycle, align their portfolio a little more defensive.
According to Galler, US economic growth is still "on steroids" because of fiscal stimulus, but is now at a very advanced stage of the economic cycle. "Consumer confidence is currently almost euphoric and growing wage growth should continue to stimulate," said the strategist. But on the business side, the difficulties are already visible: the costs of the workforce are rising and it is increasingly difficult to find qualified professionals given the historically low unemployment rate of 3, 7% recorded in September.
(Red./APA)
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