New signs of easing in the trade dispute between the US and China have boosted the stock markets in recent days. The easing of tensions between Donald Trump and Jerome Powell is also likely to have restored risk appetite, at least temporarily. In addition to economic data on both sides of the Atlantic, investors were confronted with the reporting season in the US.
DAX
Source: TradingView
Dow Jones Industrial Average Index
Source: TradingView
Trump wants to keep Powell in office after all and rows back - Possible easing of tensions in the trade dispute between the USA and China
US President Donald Trump wants to keep Federal Reserve Chairman Jerome Powell in office after all. Trump said in midweek that he had no intention of dismissing Powell. However, he would like to see the Fed Chairman be more active in lowering interest rates.
At the beginning of the week, Trump described the Fed chairman as "Mr. Too Late" and threatened to remove him from office. Investors feared the independence of the US Federal Reserve (Fed).
Investors are likely to continue to rack their brains over the trade dispute between the two largest economies.
The USA is currently imposing special tariffs of up to 145% on Chinese imports. Beijing, in turn, is demanding 125 percent for US imports. Recent reports of a possible reduction in US tariffs on Chinese goods had caused a sigh of relief.
IMF corrects forecasts - customs dispute as cause
The International Monetary Fund revised its forecast on Tuesday in light of Donald Trump's tariff policy. For Germany, the IMF expects zero growth for the current year. The global economy is expected to grow by 2.8 percent (-0.5 percentage points). The IMF meeting itself will continue until Saturday.
Purchasing managers are mixed on both sides of the Atlantic
On Wednesday, it was a flood of purchasing managers in both Germany and the US that drove investors. The purchasing managers for the manufacturing sector came out better than expected for both Germany and the eurozone, while the service and overall sectors performed worse than expected.
In the USA, however, the manufacturing sector performed better than expected, while the services sector suffered a setback.
On Thursday, it was the ifo Business Climate Index, which was better than expected despite the customs dispute. The index rose to 86.9 points in April, up from 86.7 points in the previous month and thus for the fourth time in a row. The ifo Institute surveys around 9,000 managers every month. However, the mood among companies remains pessimistic with regard to the current situation. "Uncertainty among companies has increased," says ifo President Clemens Fuest. "The German economy is bracing itself for turbulence."
New orders for durable goods in the USA surprisingly strong - Alphabet with strong quarterly results
In the USA, however, incoming orders for durable goods developed significantly better than expected compared to the previous month (2% vs. 9.20%).
Last but not least, this afternoon's focus will be on consumer confidence from the University of Michigan (16:00).
Better-than-expected advertising revenue has provided Alphabet with a surprisingly solid quarterly result. According to Sundar Pichai, head of Google's parent company, business continues to grow strongly thanks to searches on the internet supported by artificial intelligence (AI).
Advertising revenue from ads (online) climbed by 8.5% to 66.89 dollars. This revenue accounts for around three quarters of the Group's turnover. However, the cloud business is not growing as strongly as expected.
Alphabet (Google)
Source: TradingView
