Dusseldorf From the anticipation of the first agreement in the long trade dispute between the USA and China, there was little to see at the Dax on Wednesday. The leading German index closed 0.2 percent in minus at 13,432.30 points.
The Dax had already weakened in the morning. Additional sales pressure came at times after submitting Goldman Sachs and Bank of America balance sheets. At the close of trading in Europe, however, the US stock markets were up.
With the Dax minus, the record high of 13,597 points from January 2018 moved further into the distance.
The top issue on the financial markets was the signing of the so-called Phase 1 deals between the United States and China in the White House, which is intended at least to settle the tough trade dispute between the two largest economies for the time being. The announcements before the ceremony, which began after the close of trading in Germany, were sobering for investors: there is therefore no agreement on the special duties. However, the agreed halved customs duty for Chinese goods worth $ 120 billion should not be shaken.
The most controversial issues – such as the theft of intellectual property and a forced technology transfer between companies – have apparently been left out. These questions should be clarified in a second negotiation phase.
Seth Carpenter, US chief economist at UBS, considers it "unlikely that a phase 2 deal will be concluded during the year". He warns against overestimating the phase 1 agreement. "What has been made up to now has hardly any substance ”, he says. "Structural issues" didn't matter. "After months of negotiations, the US can now sell more soybeans, pork, and gas," says Carpenter.
The disappointing news surrounding the trade dispute also affected other markets. The prices of crude oil and industrial metals fell, because pessimistic economic prospects are likely to slow demand there.
The North Sea Brent oil fell by one percent to $ 63.85 a barrel (159 liters). Investors are disappointed with the US government's tough stance on the trade dispute with China and the retention of punitive tariffs on goods from the People's Republic, said analyst Edward Moya from brokerage firm Oanda. Another reason for the price slide was the dramatic increase in US oil inventories to the highest level since September.
This doubt about a surge in growth for the global economy through the trade agreement drove investors back into gold, The precious metal rose 0.3 percent to $ 1,550 per troy ounce. Bonds were also in demand.
After strong numbers from JP Morgan and solid results from Citigroup, but mixed results from Wells Fargo, other heavyweights from the financial sector presented their quarterly results on Wednesday: Goldman Sachs disappointed in the quarter with a profit decline of 26 percent. Bank of America also earned less.
Financial stocks were among the biggest losers worldwide. Bank of America shares fell two percent, Goldman Sachs' shares also started to go down, but then went up one percent. In Frankfurt, Deutsche Bank lost 2.4 percent and Commerzbank four percent.
Look at the individual values
Car values: Across Europe, car values also came under pressure. The supplier Hella suffered a decline in sales and profits: the headlight specialist's shares fell 1.7 percent. Daimler, BMW and VW were between 2.5 and 1.4 percent Dax bottom lights.
Fraport: Frankfurt Airport handled more than 70 million passengers for the first time in 2019. However, the cut winter flight schedules of many airlines have slowed passenger growth. As a result, the shares lost 1.4 percent.
What the chart technique says
The operation "closing the gap" was almost over on Tuesday. Such price gaps (technical jargon: gap) arise when the highest price of a day remains below that of the following day. The Dax rose to 13,334 points on January 8, the day after the lowest price was 13,469 points. They then serve as important support.
Short-term investors can use this area as a hedge, or depending on the situation, also as a possible return brand if the gap is closed. With yesterday's daily low of 13,362 points, this gap has already been significantly narrowed, but not yet completely closed. If they are not closed, it is a sign of strength.
According to chart technology, the index is currently "overbought". It has risen too high too quickly and is ripe for consolidation. Above 13,150 meters, the stock market barometer is still considered “bullish”
A look at the course of the past three years shows how important the entire range between 13,000 and 14,000 points is from a chart perspective. Because the past annual highs are close together: 2019 with 13,426 points, 2018 with 13,597 points, all-time high, and 2017 with 13,526 points. A rebound from this brand or an outbreak is likely to set the course for months, quarters or years, according to technical analysis.
Handelsblatt analyst check: JP Morgan advises to sell the Hannover Re share
The US bank JP Morgan left Hannover Re's rating “Underweight” with a target price of EUR 133. Hannover Re is one of the European insurers whose stocks are least attractively valued when ecological, social and governance aspects are taken into account, wrote analyst Edward Morris in an industry study available on Tuesday.
A total of 24 studies in the Handelsblatt analyst check deal with the Hannover Re share, but there is no buy recommendation. The advice is "Hold" and "Sell" twelve times. The weighted price target for all analyzes is EUR 141.61, which is significantly below the current price of around EUR 173. With a weighted course target, recent studies have a higher impact.
Click here for the Handelsblatt analyst check
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