Foreign Stock and Currency Exchange Project

Fin 4604, Fall 2019

There exists various stock markets, and therefore, it is difficult to identify the most appealing market to invest in. The month of October has not been very productive to various stock markets based on the Brexit uncertainty and the US-China trade deal. By the end of the third week of the month, there had been positive developments on the ultimatum of the two challenges, which led to improvements on various European and American stock market values. This paper will provide a comparison of the FTSE 100, DAX, and S&P 500 stock markets from the 21st to 25th October 2019, providing the various factors that potentially led to gain or decline in the stock market values.

FTSE 100

            There were slight changes in the FTSE 100 stock market values during the third week of the month of October. McCarthy (2) indicates that this was created by the fact that trade was exercised with caution based on the existing uncertainty over Brexit future, which deeply affected lenders, retailers, and house builders. Despite the caution, FTSE 100 still made gains since the value of pounds was unstable (Msika, 1).

            FTSE 100 added 173.9 points in the course of the week, though remained at 0.05% down at 7287.89. In comparison to the USD, the pound was 0.25% lower (1.2827) and 0.02% high in comparison to the euro (1.1576).

DAX

            The month of October has seen the DAX index parabolic, as reflected in the 5 days from October 21st to 25th 2019. The week began with a high DAX index of 0.91%. The stock market values for Tuesday were the lowest in the week with a gain of 0.05%. It experienced huge share losses in the sectors of Food and Beverage, Health and Pharmaceuticals, and technology. There were gains in shares from Telecoms, Retail, and Utilities. This drop in stock value was majorly caused by availability of many declining stocks compared to the rising stock, which was by 347 to 321 with 85 of them ending the day unaffected.

The German stock market index (DAX) rose by 0.17% (52 weeks high) by Friday when trade closed. This gain was orchestrated by gains in healthcare and pharmaceuticals, technology, and chemicals, which raised the shares while loses in insurance, utility and software fields dropped the shares. The best performance for the stock market was shown by Infineon Technologies AG NA O.N., which showed a gain of 4.18% by the closure of the trading week (Investing.com, 1). The week experienced various rising stocks than the declining stock, approximately by 359 to 308, with 94 of them remaining constant. Two main factors contributed to these gains, the possibility that the US-China trade deal may be coming to completion and fading of the uncertainties over Brexit. 

The DAX volatility index, on the other hand, was down to 13.97 (2.58%), which was a new one month low. It showed a EUR/USD decline of 0.24% to 1.1077 and the USD index futures of 0.25% at 97.653.

S&P500

The 5 days running (from 21st October to 25th October 2019), there is an uptrend in the S&P 500 except on 22nd when it drops to 2995.99 before rising to 3004.52 the next day. The closing record for the S&P 500 index improved based on positive resulting signs on trade talks (Nazareth and Claire, 1). This was based on extension of weekly advances by equities as the U.S. government indicated that it is finalizing its first phase section of the U.S. Ė China trade deal. The majority of the week experienced gains based on various factors, including the pared losses by Amazon.com Inc., as its long-term projections balanced a profit fall. Similarly, Intel Corp also reached its all-time high in the week when it upbeat Apple Inc. and Outlook. The week further experienced lower treasuries based on the available risk-on sentiment.

Work Cited

Msika, Michael. "Brexit Isnít Done Yet, But We May Get There: Taking Stock." Bloomberg.com, 2019, www.bloomberg.com/news/articles/2019-10-21/the-job-isn-t-done-yet-but-we-may-get-there-taking-stock-k201cpue.

McCarthy, Sebastian. "FTSE 100 Trades Flat Amid Brexit Caution." CityAM, 25 Oct. 2019, www.cityam.com/european-markets-open-flat-amid-brexit-caution/.

Nazareth, Rita, and Claire Ballentine. " S&P 500 Closes Near Record on Trade Optimism: Markets Wrap." Bloomberg.com, 2019, www.bloomberg.com/news/articles/2019-10-24/asia-stock-futures-mixed-amazon-weighs-on-tech-markets-wrap.

Investing.com. 25 Oct. 2019, www.investing.com/news/stock-market-news/germany-stocks-mixed-at-close-of-trade-dax-up-017-2004580.