11.09.2019

Lately Germany has made investors sad by showing rather poor statistics.

The market on the eve

The US share indices have closed in a deficit. They have reversed to the bottom after the Chinese trade delegation had interrupted its visits to the farms in Montana and Nebraska. S&P 500 has decreased by 0,49% and has closed on the level of 2992 points. Quadruple Witching Day has caused the growth of volumes. Cyclical industrial and financial sectors turned to be the leaders in falling. While, the representatives of health care and municipal services have closed in surplus.

What we are expecting

The world stock markets are traded on the negative territory after the poor European macro statistics have come out. According to preliminary data the German Purchasing Managers’ Index (PMI) kept on decreasing in September and became even lower than it was expected. It elevates the risk of global economy slowing down. On such a background, European stock markets lose more than 1%. Meanwhile, investors’ fears related to the cancellation of the visit of the agrarian regions of the USA by Chinese delegation have weakened after the announcements, which claimed that the withdrawal of the event was initiated by the American side and is not related to the increasing tensions between these two countries.

However, nowadays Asian indices decrease like European ones. While it is the autumnal equinox in Japan and the markets are closed Shanghai Shenzhen CSI 300 and Hang Seng lose around 1%. It is likely, that there will be a fixation of positions before the next week’s durable holidays in China connected with the PRC 70th anniversary celebration.
The demand for safe assets has risen. Debt securities go up in value. Profitability of 10-years treasury has got down to the level lower than 1,7%. Gold is rising in price. Brent oil is traded a bit lower than 65$ per barrel. Such a price is caused by two factors:

• tension between the USA and Iran;
• uncertainty in terms of oil production in Saudi Arabia revival after the drone attack.

So, the less and less investors are ready to risk.

No significant macro economic news are expected in the USA today. According to our expectations S&P 500 will lower to the level of 2980 points again during the session.

The technical pattern looks mixed. Index has not managed to fix on the September’s pick. This is a negative factor. The RSI and MACD rates are worsening, but still are keeping the positive dynamics. So, the mid-term picture looks favorable, but still there are some chances of switching to consolidation.