Markets Update Tuesday 05/11/2019 – More record highs

Frankfurt – 05/11/2019

More record highs

Cautious optimism continued to prevail on the US stock markets on Tuesday.

The Dow Jones reached another record high on the second trading day of the week, rising to 27,560.36 points before the gains crumbled again. In the end, the leading US index managed to gain slightly and closed 0.11 per cent higher at 27,492.80 points. The NASDAQ Composite tech index also reached a new all-time high of 8,457.39 points but was unable to hold the price level until the end of trading. With a mini-plus of 0.02 per cent, the market barometer went into the evening at 8,434.68 points.

With this, the record rally on the US stock markets continued in a weakened form on Tuesday. The current record level makes further significant rallies on Wall Street difficult. Traders pointed out that it is time to take a deep breath. The market is paying particular attention to the fact that China and the US are making progress in trade talks.

Far East Markets at a glance

Asian equity markets also rose on Tuesday.

In Japan, the Nikkei gained 1.76 per cent to 23,251.99 points by the end of trading.

On the Chinese mainland, the Shanghai Composite climbed by 0.54 per cent to 2,991.56 points. The Hang Seng in Hong Kong also rose by 0.49 per cent to 27,683.40 points.

The positive signals in the US-Chinese trade dispute gave the stock markets in the Far East a boost. Also, the Chinese central bank lowered its one-year key interest rate for the first time since 2016, which was positively received by the market.

European Markets at a glance

The most important stock markets in Europe were also friendly.

The EuroSTOXX 50 was able to make a profit after a relatively quiet opening. It ended the meeting 0.31 per cent higher at 3,676.52 units.

The Dax, which had climbed by more than ten per cent since the beginning of October, barely moved away from its starting point throughout the day, closing at 13,148.50 points with a gain of 0.09 per cent. The MDax of mid-sized stocks fell by 0.15 per cent to 26,872.81 points. On the previous day, the Dax had risen above 13,000 points for the first time since June 2018. It seems that investors took a deep breath on Tuesday.

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Forex, gold, oil and crypto

The euro came under considerable pressure on Tuesday. At the close of trading in Frankfurt, the common currency cost 1.1066 dollars. In the morning it was still quoted at 1.1140 dollars. The European Central Bank (ECB) set the reference price at 1.1109 US dollars. The dollar thus trades at 0.9002 euros.

Robust economic data from the US supported the dollar this afternoon. Sentiment in the US services sector surprisingly brightened significantly in October. This dampened fears that the weakness in the industrial sector would spread more strongly to the service sector.

As a side-effect, the price of gold briefly dropped significantly to under $1,480. Oil prices, on the other hand, recovered slightly today, Tuesday. A barrel of North Sea Brent currently costs $62.90, an increase of 0.66%. WTI is rising by 0.47% to $57.21 per barrel.  

The cryptocurrency market is trading slightly higher on Tuesday. Even though the number 1 in the crypto world, Bitcoin, did not move, there are still many winners. Stellar Lumens (XLM) was the strongest performer. The digital currency rose by almost 20 per cent after rumours were heard that 55 billion tokens had been burned, more than halving the total stock of the cryptocurrency. Ethereum gained nearly 2 per cent and is currently valued at just above $189. XRP also registers gains and is trading at $0.3010 at the time of writing. 

Corporate and world news

Digital Fonds III: Million Euro Capital for European Startups

Various new investors from Europe, Asia, the Middle East and North America have invested and increased the originally planned volume of the new “Digital Fonds III” from 300 million euros to a total of 350 million euros. Start-ups from the Fintech, Insurtech, Deeptech and Digital Health sectors have already benefited from this development, as more than 85 million euros of the fund have so far been invested in 15 companies in the digital economy. A German company is also among the beneficiaries. As early as November 2018, TeleClinic, a Munich-based telemedicine start-up, received capital of 7 million euros from the “Digital Fonds II”. Matthieu Baret, the Managing Partner at Idinvest Partners, tells the Handelsblatt about the potential of the German market: “The German start-up scene is very attractive for investors, there are many great companies and founders here, especially in the areas of Fintech and Digital Health. Competition with domestic investors in Germany is also lower than in France or Great Britain, for example.”

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SAP: More money for shareholders

Europe’s largest software company SAP wants to distribute significantly more cash to its shareholders. By the end of next year, SAP plans to return an additional 1.5 billion euros to its shareholders through share buybacks or special dividends, as the DAX heavyweight announced in Walldorf late Monday evening. SAP had already promised a higher payout but left details of the program open.

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Telefonica slips into the red

The Spanish telecommunications group incurred losses in the third quarter due to restructuring costs. All in all, between July and the end of September, Telefonica reported a net loss attributable to shareholders of EUR 443 million. In the prior-year quarter, there had been a profit of EUR 1.14 billion. The Spaniards were able to increase sales by 1.7 per cent to 11.9 billion euros. CEO José María Álvarez-Pallete confirmed the financial targets and the dividend announced for 2019.

Walgreens delisting?

The pharmaceutical wholesaler and pharmacy group Walgreens is considering withdrawing from the stock exchange, according to several sources.

The company recently held informal talks with financial investors, the news agency Bloomberg reported on Tuesday, citing people familiar with the matter. Walgreens CEO Stefano Pessina is also the largest shareholder of the company with a share of about 16 per cent, which is valued at 57 billion US dollars on the stock exchange.

Some financial investors had reacted cautiously to the idea, the circles continued. It is also unclear how feasible such a transaction would be. Walgreens could also decide against such a measure. A company spokesman did not want to comment on the matter. At first, the company boss could not be reached.

Nevertheless, the investors were already celebrating something on the stock exchange: In an initial reaction, Walgreens’ share price jumped by more than 8 per cent, and in the end, the share closed 2.62 per cent higher at 61.21 US dollars.

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