Markets Update Monday 16/12/2019 – Christmas Rally in full swing

Frankfurt – 16/12/2019

Christmas Rally in full swing

At the start of the new trading week, Dow Jones, Nasdaq & Co rushed to new record highs – thanks to trade peace between China and the USA.

Investors have one less worry just before Christmas: fear of a prolonged tariff dispute between Washington and Beijing. On Friday evening, after months of squabbling, the two squabblers agreed on a first partial agreement. The Americans agreed to reduce some tariffs. In return, the Chinese are buying more US goods, including from agriculture. The Phase 1 agreement between the US and China has yet to be formally signed. But US Trade Representative Robert Lighthizer told CBS that the deal was entirely through. The preliminary trade peace continued to have a positive effect at the beginning of the week on many major markets.

US Markets at a glance

The Dow Jones reached a new record high at 28,337.49 points, and the US leading index ended the day 0.35 per cent higher at 28,234.60 points. The NASDAQ composite also set a new record and peaked at 8,833.45 points. With a plus of 0.91 per cent, the stock market barometer left trading at 8,814.23 points.

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In addition to the first partial success in the trading dispute, the expectation of a regulated Brexit and surprisingly good economic data from China had positive effects on the US markets.

Domestic economic data, on the other hand, did not play a significant role. The Empire State Index, which measures production in the state of New York, brightened slightly. Purchasing managers’ indices were mixed in December. The mood on the US housing market brightened surprisingly in December. The NAHB house market index rose to its highest level since June 1999.

Far East Markets at a glance

The Asian stock exchanges did not find a common direction on Monday. 

Investors are first trying to analyze the implications of the Phase 1 trade agreement announced by the US and China. So the deal has yet to be signed. Besides, there are still numerous points of contention between the countries that will be addressed in further rounds of negotiations. In Japan, the Nikkei fell by 0.3 per cent to 23.952 points. The CSI-300 index with the 300 most important stocks on the Chinese mainland stock exchanges rose moderately recently, while in Hong Kong the Hang Seng fell modestly.

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European Markets at a glance

The stock markets in Europe began the new week with friendly prices.

The EuroSTOXX 50 had made a firmer start into Monday trading and then increased this profit. After all, it went into the evening 1.12 per cent stronger at 3,772.74 points.

The hoped-for “Phase 1 trade deal” between the USA and China brought relief to the markets. However, investors had already expected this in advance: “It’s a classic sell-the-news case,” one trader said. In addition, the prospects of an orderly withdrawal of Great Britain from the European Union after the election victory of the Conservatives were also supportive. The “Footsie” (FTSE 100) rose by 2.2 per cent to 7513 points and was by far the biggest winner among the leading European indices. 

The German stock market also started the new trading week with strong gains. The DAX, the leading index, had already opened the trading week in a friendly fashion and was able to gain even more strongly in the course of trading. In the evening it closed 0.94 per cent higher at 13,407.66 points. The MDAX was also friendly, as it was an indicator for the shares of medium-sized German companies and climbed to a record high of 28,307.58 points. At the end of the trading day, it had risen by 1.73 per cent to 28,254.40 points. Also, the TecDAX had opened with a small gain and developed strongly over the day, closing the day 1.24 per cent higher at 3,087.19 units.

Forex, gold oil and crypto

The euro went up a slightly: The European single currency will rise to 1.1140 dollars by the evening. The euro had recently benefited from the UK election and the prospect of an orderly Brexit. The British pound gained half a per cent to 1.34 dollars but then had to give up its gains and fell to $1.3330.

Oil prices rose by well over one per cent at the beginning of the week. On Friday, oil prices had temporarily risen to a three-month high.

Gold, on the other hand, fell slightly. Currently, investors are paying just under 1,474 dollars per troy ounce.

Cryptocurrencies had to take a hard beating on Monday. The overall market capitalization of the entire crypto market plummeted to $187 billion. Bitcoin fell by over 3 per cent to $6,900, while Ethereum lost over 7 per cent to just under $133 and XRP dropped by 5 per cent to $0.2070. 

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Corporate and world news

2.5 billion euros for AutoScout

The advertising portal operator Scout24 can expect sales proceeds of more than 2.5 billion euros for its car portal Autoscout24. The US financial investor Hellman & Friedman (H&F) offered “considerably more” than this sum, Scout24 announced in Munich on Monday. The negotiations had progressed and could “possibly be brought to a conclusion at short notice”, but nothing had yet been signed. Other bidders are also still being talked to.

flatex strongly expands European business with DeGiro takeover

The online broker flatex wants to buy its Dutch competitor DeGiro for 250 million euros.

Of the purchase price, 190 million euros are to be paid with own shares, flatex announced on Monday in Frankfurt. The capital is to be increased by 7.5 million shares for 25.33 euros and will go to the current DeGiro shareholders. The remaining 60 million euros will be paid by flatex in cash. With the capital increase, the number of flatex shares will increase by around 38 per cent to slightly more than 27 million.

So far, flatex’s business has focused primarily on Germany, Austria and the Netherlands. The expansion to France, Italy, Sweden and Spain was recently planned. DeGiro is already active in these markets, as well as in Great Britain and Scandinavia.

According to a Commerzbank buy recommendation on Monday, the online broker’s securities jumped to 25.05 euros. They thus clearly left both the 200-day and 50-day lines behind. At the end of the Xetra trading day, they gained 11.71 per cent to 23.85 euros.

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