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Frankfurt – 25/11/2019
Solid start without any major news
At the beginning of the most important week of the year for the American retail trade, Black Friday, there are rather conciliatory tones in the customs dispute with China. This also pleases investors.
Thanksgiving week has begun and with it the now globally celebrated “Black Friday”, on which retailers from New York to Tübingen sometimes offer drastic discounts on their goods. No wonder that at the start of a week so crucial for the retail trade and thus for the entire economy, there are rather friendly tones about the customs dispute instead of new threats.
China promises to protect intellectual property better and is thus approaching the USA. Also, the state-run Chinese newspaper “Global Times” reported that the first partial agreement between the USA and China, which has been discussed time and again recently, is about to be concluded. Investors reacted accordingly positively.
US Markets at a glance
On Wall Street, bulls took over again on Monday.
After a friendly start, the Dow Jones remained in positive territory and ended the trading session 0.68 per cent firmer at 28,066.54 points. The Techwerteindex NASDAQ Composite also presented itself strongly throughout the entire trading session and even set a new all-time high at 8,633.15 index points. It closed 1.32 per cent higher at 8,632.49 points.
Far East Markets at a glance
The positive signals received in the US-Chinese trade dispute also drove the Asian stock markets to the start of the week. In China, the CSI 300 index with the 300 most important stocks on the Chinese mainland stock exchanges recently rose by more than half a per cent, and in Hong Kong, the Hang Seng rose by 1.4 per cent after the regional elections. The Japanese leading index Nikkei closed with a plus of 0.8 per cent to 23,292 points.
European Markets at a glance
The stock markets in Europe also made gains on Monday.
The EuroSTOXX 50 had started the day slightly stronger and was able to increase its gains in the day further. It rose by 0.56 per cent to 3,707.80 points.
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The DAX had already started the day with a solid gain and remained true to this trend over the day. It closed 0.63 per cent higher at 13,246.45 points. The TecDAX also gained even more on the day, having already made a stronger start. It closed the trading day with a gain of 1.13 per cent to 3,046.00 points.
In addition to the positive signals in the trade dispute between the USA and China, the mood on the executive floors also brightened: The Ifo business climate index rose slightly in November.
Forex, gold, oil and crypto
Not much movements were recorded for the euro this Monday. The common currency continues trading sideways around the $1.10 mark.
Oil prices hardly changed on Monday either and remained close to their two-month highs. Market observers spoke of a low-impulse weekly start on the oil market. According to commodities expert Carsten Fritsch of Commerzbank, oil prices will continue to be supported by hopes of a trade agreement between the USA and China and thus an end to the conflict between the world’s two largest economies. Should an agreement be reached, “a significant psychological burden on oil demand would disappear next year,” said Fritsch.
Meanwhile, the falling risk aversion of investors is not doing the precious metal gold, which is valued as a “safe haven”, any good. The price for the troy ounce of gold last cost 1,457 dollars, 0.2 per cent less than on Friday.
The world’s best-known cryptocurrency, Bitcoin, continued its downward trend at the beginning of the new week. After the Bitcoin had already ruptured the 7,000 US dollar mark on Friday, it continued its downward slide at the beginning of the new week: on Monday, Bitcoin, lost further value and slipped to 6,571.91 US dollars. The digital currency thus marked a new 6-month low. In the afternoon, Bitcoin can recover a bit and is again above the 7,000 US dollar mark. Other popular cryptocurrencies also continued their downtrend. As examples, Ethereum fell to $144 and XRP to just under $0.22.
Corporate and world news
Massive broker wedding on the horizon in the USA
The US cheap broker Charles Schwab wants to swallow the competitor TD Ameritrade. TD Ameritrade shareholders are to receive 1.0837 Schwab shares per own paper, which values the whole deal at approximately 26 billion dollars, the two companies announced in San Francisco on Monday. Together, the two brokers had 24 million customer accounts, in which more than 5 trillion dollars were invested. Lastly, the companies together had a total annual turnover of 17 billion dollars and a pre-tax profit of 8 billion dollars. The merger is expected to reduce annual costs by 1.8 to 2 billion dollars from the third year after completion – that is up to one-fifth of the cost base.
Charles Schwab and TD Ameritrade specialize in retail investors in the US financial market. A merger had already been speculated about last week.
British Prime Minister Boris Johnson has warned of a further delay in Britain’s withdrawal from the EU. “Let’s deliver the Brexit! Then we can concentrate fully on the priorities of the people of Britain,” Johnson called out to his audience at the presentation of his Conservative Party’s election programme on Sunday afternoon in Telford. In the 2016 Brexit referendum, a majority of the West Midlands city voted in favour of leaving the EU. The Tory election programme offers a “vision for the future” of the country, the head of government said. The British will elect a new parliament on 12 December.
Uber share collapses
The controversial transport broker Uber is no longer allowed to offer its services in London. On Monday, the local transport authority Transport for London referred to several violations with which the taxi competitor had risked passengers and their safety. The license expires Monday night.
“Safety has top priority,” the authority said. It was unacceptable for Uber to work with possibly unlicensed and uninsured drivers. The British capital is the largest European market for the transport service agent.
Uber announced an appeal against the decision and described it as exceptional and wrong. During the ongoing dispute, the group can continue to offer services. The Uber share falls by more than six per cent in pre-trade US trading.
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