Throughout the quarterly results of the companies are good and above expectations, but the outlook given by the companies often does not meet the requirements of Wall Street. As a result, we are seeing strong volatility on the US stock exchanges, which is compounded by rising interest rates on government bonds. Many fearful investors move from the stock market into, if one believes, more stable bond markets. All the turmoil about Facebook and stolen user data, as well as the allegations against Amazon also do not really boost the confidence of market participants, and as if that was not enough, there is still a president Trump who often speaks and tweets faster than he thinks. He usually has to row back or send in a 6-hour attack on Syria, which raises more questions and stirs up conflict than it resolves.
Looking at the US economy as a whole, the fundamentals are excellent, of course, the curve will gradually flatten, but the trend continues to point higher, though it also makes punitive tariffs and other trade barriers harder and not easier for the US, and last but not least it falls back on the consumer, but especially in America provides for over 85% of GDP. Again, we can only align Mr. Trump – think before, then act !!!
Three months ago, verbal atrocities flew from Washington to Pyongyang and vice versa, but at the Winter Olympics in Pyeongchang, there was already a rapprochement between North and South Korea and now we may have a summit between Donald Trump and Kim Jong. It would certainly be a step in the right direction for the world if the two conflicting parties could approach each other. But as soon as there is light at the end of the tunnel, Trump will certainly find a switch to turn it off, as now with his punitive tariffs. Again, a populist action without thinking about the consequences for their own country, a number of companies in the US have with their suppliers long-term contracts that are not easy terminable, these companies must now take the extra effort for the punitive tariffs and of course they promptly to the consumer. The then remains less in your pocket and thus the economy is weakened, but as far as Trump has not thought, as always in his projects. The self-proclaimed billionaire has just 3 houses in New York and about 250-400 million dollars, he is not poor but not Bill Gates. The neat houses with his name on it are all fake, he just sold the license in his name. His last big real project was a casino in Atlantic City called Taj Mahal which he fell terribly on account of incompetence and went bankrupt, the injection of $ 100 million from his father’s cannot help in this case.
But the American people recognize more and more which whiskers they have made President here and even the Midterm elections in the fall will show that the Americans do not agree with the current policy, never had a president over 130 pending lawsuits and what in the case of the Russian affair everything will come to light, will also show up. The chance of a second term for Donald Trump as president is currently nearing zero, we can only hope that Trump in the next 2.5 years took the US not further to the sideline.
Markets continue to show stable upward trends, market participants have probably resigned to Washington and focus more on economic data, which continues to look bright, more than 200,000 new jobs created last month, and the unemployment rate continues to decline as GDP is above expectations and the US economy continues to strengthen.
After a long tremble Trump can now record his first success, the US Senate agreed to the tax reform with 51 to 49 votes – but scarce. This reform promises a significant tax relief for companies and a moderate relief for the private sector. This should actually boost the markets, but investors are probably not yet convinced, and of course a lot had already been priced in advance. In any case, after just under a year in office, President Trump can at least make that election promise come true, but in many other areas he has made it a bit more difficult for the American at the global gaming table. Resignation from trade agreements and climate resolutions, leaving UNESCO, threats against North Korea, leaving the global refugee program and, of course, his immigration policy make it difficult for diplomats in the background to keep the US in the game. For the image of America, all these decisions are rather damaging and also the place as a predator of the world could be endangered with these – sometimes thoughtless – actions. Let’s hope that the man with the strange hairstyle does not do any more damage and tacitly disappears in 3 years, the Americans can take a first step in this direction next year when representatives House and one-third of the Senate are re-elected.
At the moment, the US stock exchanges are showing some signs of mixed, sometimes a great plus, then again discounts, the price of expected interest rate expectations is being pushed ahead. The US economy will cope with the FED’s further rate hike and Mr Trump’s partly unreasonable statements will not bother any more, the only hope for the market participants is the promised tax reform, but what it ultimately brings is still very questionable. Slowly but surely, the government around Donald Trump should present results soon, because in 2018 there are midterm elections and if Americans would go to the polls today, Republicans were to lose the majority to at least one house, which would make it incredibly difficult for Trump to enforce anything. The markets are still stable as mentioned, everything else will show in the next few months.
… Donald Trump will probably think so in the last weeks. His campaign manager is being arrested for the so-called “Russian scandal” and it remains to be seen if Trump’s campaign was financed with Russian money. In general, Trump has implemented little or nothing of his election campaign slogans, with his immigration policy he keeps pushing the boundaries of the Supreme Court, Obamacare remains in force, and little indicates that this will change and he is stuck with his highly acclaimed tax reform in the dead end. Had the markets reacted negatively to the latest news before the summer, they now appear as if they would not even affect everything peripherally. Apparently, the partially joking seeming events in the White House are no longer interesting and market relevant. Economic data remains stable and well, unemployment continues to decline and citizens’ confidence in the economy is high. As announced recently, the FED will raise interest rates in December, this rate hike has already been priced in and with today’s 6 strongest months on the stock market. According to statistics, between November and April, markets spend more than 70% of their annual profits, which suggests investing right now. The quarterly results of the companies are consistently above expectations an interesting number comes tomorrow – Apple released the annual result tomorrow and many are looking at the most valuable company in the world. As mentioned, the markets are stable and show all-time highs again, the Dow Jones stands at 23377 points, the wider S&P500 at 2575 and the technologically annoying Nasdaq Composite at 6727 points.
As mentioned, the next months are interesting, have a look at our products – here and the performance – here
In the last FOMC meeting, it was obvious that a further interest rate increase was planned this year in the US, as the minutes show. This increase is due in December. The FED is convinced that the economic performance of the US as well as the low unemployment rate allow such a step. This would be the fourth interest rate increase under Yellen. But let’s look at the numbers ourselves, the economic performance of the US is good but not outstanding, we expect this year with an economic growth of about 3% and also for next year the forecast is not really higher. The dollar is currently weakening somewhat, but this could be a reaction to American intervention. What could also move the FED to this step? Is that Europe – is finally back to economic growth and the global recession has now come to an end in all the leading countries. Of course, a small beauty mistake remains, the last correction (Crash) is now 9 years back and if we look at the development since the 1930s, a correction is soon to be expected. However, we assume that this correction will be moderate and will not lead to uncontrolled eruptions. The markets are still very quiet and in no way nervous, we still see All Time Highs and the volumes are still attractive, also the short sales move in the normal frame. All in all, we are looking forward to the strongest quarter of the year and the quarterly results of the companies in the third quarter of 2017.
The verbal confrontation between North Korea and the USA is becoming increasingly violent, and the provocations from the communist country are also growing. Even if the UN has adopted further sanctions, this will not lead to a relaxation. In Pyongyang there is a ruler who is unyielding and insensible, and who has to confirm his generals on the basis of his inheritance. The situation is also not defused by the president sitting in the White House, on the contrary, with his populist statements and an emotionality that is false for this office, Trump makes it even more dangerous. The stock exchanges react to the situation still very cautiously and continue to concentrate on the US economy, but the situation should escalate is to be expected a crash.
As already mentioned, the stock exchanges are reacting more to current economic data and developments, as always new constant highs and the foundation seems to be stable. The current dollar weakness is due to the FED’s reluctance to invest in the interest rate policy, which is why the Fed was still talking about 2-3 interest rates at the beginning of the year. Two interest rate increases have given it 2017 until now whether a third remains to be seen.
September is the third and weakest quarter on the stock exchanges to end and the strongest quarter follows, but the results of the companies are still interesting and the positive trend of the first two quarters can be continued. A corner point will be the numbers of Apple since for Apple the same as the annual figures, since the fiscal year for Apple on 30 September ends.
Furthermore, oil is still very low at around $ 50 a barrel and a massive uptrend is not within sight despite the fact that the OPEC has reduced its production. After a short high at Gold, because of the geopolitical crisis, the price has again settled at around $ 1300 per ounce.
Dow Jones 22203.48; Nasdaq Composite 6429.08; S & P500 2495.62
The US stock exchanges are still on the rise, showing again and again All Time Highs, which can not change the odd-looking policies of a Mr. Trump. Trump has now achieved a small partial success with his immigration policy, but only so much that the US has been able to choose who enters, but so far no countries have been mentioned which make it difficult or difficult to enter the US.
The FED is expected to raise interest rates one step further (25 basis points) before the summer months, the signs of the economy are good as well as the labor market stands on stable feet.
It is even more difficult in England, after Prime Minister May has lost the election and now, with the support of Northern Ireland, a minority government is striving, Brexit negotiations have become more difficult.
Dow Jones stands at 21409.55 points Nasdaq at 6247.15 points and S & P500 at 2439.07 points
The US stock exchange market could skip the 21,000 point mark in the Dow Jones Index when Donald Trump held his speech before the Congress and presented his tax plans. However, the market rowed back the next week the FED’s interest rate decision is on and most market participants expect a further interest rate increase. As a result, US government bonds would also be subject to a higher interest rate and thus a flight from the capital market to the bond market could be initiated. But this danger is still far from being achieved; the interest rate is still very low, even on an increase, and on the other hand the stock market still promises succesful returns. Still, as I said earlier, a restrained week until now.
The rally started after the fishing of Donald Trump and moved the Dow Jones Index over the psychological mark of 20,000 points yesterday. An important positive sign is that the market has not only exceeded the level intraday but has also closed above the level. In addition, the market is nervous and looks with Arguseyes at every sentence the new president Trump leaves itself. Only a small mistake Trumps and the rally could come to a halt, some analysts agree. The first 100 days of the presidency will now show what is really left of the electoral promises and the tirades. Two things Trump has already initiated, the defacto abolition of Obamacare and he urges the construction of the wall on the US American border to Mexico. The time will show how much of the “goals” is actually implemented.