That was really a ” wrecked action ” yesterday in the Dow – waiting for 2:30 pm

“Wrecked action” in Dow 30 is now spontaneously our word creation. The ISM index for services was significantly weaker than expected. The Dow fell by 300 points. Oil also fell well. Then, only five minutes after the publication, there was suddenly an interest rate lowering fantasy for the USA. And, as you know, this helps the stock market. That again briefly to the flashback on yesterday’s market. And what does the Dow say overnight in comparison to yesterday 3:59 p.m. German time, i.e. immediately before the ISM data?

Dax waits for US labour market data

Overnight until this morning, the Dow is trading 130 points higher on balance. So the optimists are currently gaining more hope from a possible rate cut by the Fed in less than four weeks than the pessimists are drawing negative energy from the ISM data for the economy! And the Dax? It has to catch up this morning after yesterday’s trading break. The bottom line is 20 points higher compared to Wednesday evening, currently at 11,972 points. “According to the ISM data, it is ahead of the US labour market data,” we might put it that way. According to 2 x ISM data, these are the absolute highlight of US economic data this week. They will be published today at 2:30 p.m. German time. Will the Dax now go into rigor mortis for the next few hours in order to wait for this impulse? Well conceivable. The only question will be: If the data turns out badly, will there be the same pattern as yesterday? First down with the stocks, then nicely up, because interest rates might fall even further soon? Milan Cutcovic from Axitrader currently quotes the Dax:

In the coming days, the Dax is likely to work its way through the 12,000 point mark for the time being. The rally at the beginning of September has come to an abrupt end. We currently see the index slightly higher at 11,970 points. The fact that the equity market is not yet crashing completely is attributable to investors’ hopes of further interest rate cuts by the US Federal Reserve. The Federal Reserve was still very cautious at the last meeting. But now that the US economy is also weakening and a trade agreement between the US and China is unlikely in the near future, monetary policymakers should show themselves willing to increase the pace of interest rate cuts.

What else?

According to the ISM data, the oil price recovered significantly. The pullback to the upside even caused a small buying avalanche. The price is now a good 80 Cents higher than before the ISM data. At 1,508 Dollars, gold is still trading 7 Dollars higher than before the ISM data. The US Dollar Index is still slightly weaker. So: The US capital market believes in falling interest rates. And perhaps today’s US labor market data offers a second boost of hope for this scenario? Traders who enter the market before 2:30 p.m. today and want to take the market reaction with them at 2:30 p.m. run a high risk. But: Who dares nothing, who does not win? So: Today the market (indices, foreign exchange, oil) waits for 2:30 pm. Until then, dance of death?

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