The DAX has posted sharp losses in the Thursday session, wiping out the gains seen on Wednesday. Currently, the index is at 10,437, down 1.35% since the Wednesday close. On the release front, eurozone monetary data was within expectations. On Friday, the eurozone releases Flash CPI estimates.
Any hopes for a positive start to the New Year were quickly dashed, as Asian and European stock markets declined sharply on Thursday. Investors responded negatively after Apple cut its quarterly sales forecast. The revenue warning, which was released after the close of North American markets on Wednesday, caught the markets by surprise. Apple blamed the downturn on weaker iPhone sales in China, which has been hit by an economic slowdown due to the ongoing tariff battle with the United States. Will the downturn continue? Last week, the DAX dropped to 10,279, its lowest level since November 2016, and investors are sorely in need of some positive news to shore up their badly-shaken confidence.
The ongoing global trade war has dampened economic growth and hurt investor confidence. With investors reading in their morning newspapers that equity markets suffered their worst year since 2008, risk apprehension remains high as we begin the New Year. However, one positive development in December was the announcement that U.S. and Chinese delegations are set to meet next week and tackle the trade issues that have sparked a serious rift between the world’s two largest economies. The talks are critical, as the U.S. has said that it will impose heavy tariffs on Chinese products on March 1, but agreed to suspend the move while talks are ongoing. Earlier in the week, President Trump said that ‘big progress’ had been made with China, but with the sides yet to meet face-to-face, the markets are not putting much stock in Trump’s remarks.
Thursday (January 3)
- 4:00 Eurozone M3 Money Supply. Estimate 3.8%. Actual 3.7%
- 4:00 Eurozone Private Loans. Estimate 3.3%. Actual 3.3%
Friday (January 4)
- 3:55 German Final Services PMI. Estimate 52.5
- 3:55 German Unemployment Change. Estimate -12K
- 4:00 Eurozone Final Services PMI. Estimate 51.4
- 5:00 Eurozone CPI Flash Estimate. Estimate 1.8%
- 5:00 Eurozone Core CPI Flash Estimate. Estimate 1.0%
- 5:00 Eurozone PPI. Estimate -0.2%
- 8:30 US Nonfarm Employment Change. Estimate 178K
*All release times are DST
*Key events are in bold
DAX, Thursday, January 3 at 9:00 EST
Previous Close: 10,580 Open: 10,472 Low: 10,401 High: 10,538 Close: 10,437