Markets Update Thursday 16/09/2021 – Ever-not-so-Grande

Frankfurt – 16/09/2021

Ever-not-so-Grande

According to today’s economic data, US Americans’ appetite for consumption has reawakened. Rising sales in the US retail trade provided a small ray of hope on the stock markets today. Neither the corona crisis nor hurricane “Ida” was able to spoil the US Americans’ shopping mood. But the market mood remains depressed. 

The positive economic news did not initially go down well on Wall Street. It could prompt the US Federal Reserve to tighten the monetary reins sooner rather than later by reducing the billions of dollars in securities purchases. In US bond trading, yields rose after the good economic data, but the situation calmed down intraday. 

Investors are also cautious about the difficulties of the Chinese real estate giant Evergrande. The country’s second-largest property developer, which is groaning under a mountain of debt of more than 300 billion dollars, had recently warned of liquidity and default risks. The shares slid again today by more than 6 per cent. Now the markets would have to hope that the leaders in Beijing know how to prevent a systemic crisis.

US Markets at a glance

The Wall Street indices were treading water today. At the sound of the opening bell, the Dow Jones was 0.01 per cent lower at 34,810.27 points and finally went into the evening down 0.18 per cent at 34,751.12 points. Meanwhile, the NASDAQ Composite opened 0.27 per cent lighter at 15,120.09 points but ultimately closed 0.13 per cent stronger at 15,181.92 points.

After repeated fluctuations between gains and losses on the US stock markets in the past few days, concerns about the faltering real estate giant Evergrande now came to the fore. The group’s insolvency could also lead to a property crisis and drag down the Chinese banking sector. 

Far East Markets at a glance

On Thursday, the most important trading centres in Asia went downhill. In Japan, the Nikkei benchmark index lost 0.62 per cent to 30,323.34 points by the end of trading. Meanwhile, on the Chinese mainland, the Shanghai Composite lost 1.34 per cent to 3,607.09 points, while Hong Kong’s Hang Seng fell 1.46 per cent to 24,667.85 units.

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Negative signs prevailed in Asia in Thursday’s trading. Wednesday’s weak Chinese economic data was still impacting, said market participants, who also spoke of heightened nervousness ahead of Friday’s big drop. The firm signals from Wall Street fizzled out.

Hong Kong again brought up the rear, with the debacle surrounding the financially troubled real estate group China Evergrande still in the spotlight.

European Markets at a glance

The majority of Europe’s banks were friendly. The EuroSTOXX 50 began the new trading day with a minimal gain but subsequently increased the plus and went into trading at 4,169.87 points with a plus of 0.58 per cent.

The DAX also started in the green and subsequently continued to rise. Shortly before the close, however, it gave back some of its gains so that it ultimately ended trading 0.23 per cent higher at 15,651.22 points. The TecDAX was more restrained, gaining 0.2 per cent to 3,900.97 points.

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After the minor setback the previous day, European stocks were on a recovery course on Thursday. However, a new trend was not yet in sight.

Forex, gold, oil and crypto

The dollar visibly strengthened against many currencies on the foreign exchange market in the morning and also put the euro under pressure. The euro slipped well below the 1.18 dollar mark and closed at 1.1755 dollars.

Oil prices softened somewhat on Thursday after their recent significant gains but remained at high levels. In the evening, North Sea Brent crude was trading at 74.96 US dollars, 51 cents less than the previous day. WTI oil was also down 65 cents to 71.96 dollars.

The sharp rise in US government bond yields weighed heavily on gold prices today, and the precious metal slumped to $1.752 per troy ounce. In early trading, gold was still valued at over $1,800. 

Cryptocurrencies moved sideways after the overall market cap reached the critical 0.702 Fibonacci level. If bulls can breach this crucial level, the next big move higher is very likely. Bitcoin and Ethereum declined by 0.5 per cent to $47,800 and $3,575, respectively. Cardano and XRP fell by 2.2 per cent to $2.43 and $1.10, while Binance Coin posted a 1 per cent minus to $423, and Solana dropped 4 per cent to $151.  

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Corporate and world economic news

Economic data

Japan‘s export growth weakened more than expected in August due to renewed Corona fallout and problems in car production as a result of the chip shortage. Exports rose by 26.2 per cent year-on-year, the Japanese Finance Ministry announced on Thursday based on preliminary data. Exports thus increased for the sixth month in a row. However, the growth was significantly lower than in the previous months. Experts had expected a slower rise in exports, but a plus of more than 30 per cent. Since imports increased by almost 45 per cent in August compared to the previous year, the balance of trade slipped into the red. The trade deficit amounted to 635 billion yen (4.9 billion euros) after a plus of 439 billion yen in July.

The German Institute for Economic Research (DIW) forecasts significantly lower economic growth for Germany this year. Economic output (GDP) is expected to rise by 2.1 per cent in 2021, the DIW announced in Berlin on Thursday. Previously, the researchers had expected growth of 3.2 per cent. For the coming year, however, the economy is expected to pick up strongly by 4.9 per cent; previously, the DIW had forecast 4.3 per cent. The main reason for the greater pessimism this year is the continuing supply bottlenecks and material shortages in German industry due to numerous problems in international trade in goods. 

The eurozone‘s trade surplus increased in July. Seasonally adjusted, it increased by 1.5 billion euros to 13.4 billion euros compared to the previous month, as Eurostat announced in Luxembourg on Thursday. However, the surplus was lower than expected. Analysts had expected an average of 14.9 billion euros. 

The number of initial filings for US unemployment insurance benefits increased more than expected in the week ending 11 September. Compared to last week, the number of claims rose by 20,000 to 332,000, as reported by the US Department of Labour in Washington versus 320,000 predicted.

US retailers reported a surprising increase in sales for August. Total sales rose 0.7 per cent from the previous month. Economists surveyed by Dow Jones Newswires had expected a consensus decline of 0.8 per cent.

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