LGT Navigator

Cautious start to the year for stock markets

Following the highs seen on Wall Street just before the end of the year, equity markets have kicked off the new year cautiously. Monetary policy and geopolitical risks will remain in the spotlight. The faster-than-expected decline in inflation and fears of an economic downturn should ensure that central banks, especially the US Federal Reserve, at least consider a turnaround on interest rates. We therefore look forward to an exciting year in capital markets and would like to take this opportunity to wish you a good start.

Alessandro Fezzi, LGT
Reading time
5 minutes
Start into the year 2024
© Shutterstock

After the Dow Jones Industrial rose almost 14% in 2023, the New York Stock Exchange had a subdued start to the new year. Particularly technology stocks came under pressure. After a gain of more than 50% last year, indices on the Nasdaq recorded a loss of around 1.7% on Tuesday. The Dow Jones Industrial closed the first trading day of the new year at 37,715.04 (+0.07%), close to its recent record highs. The S&P 500, on the other hand, fell 0.57% to 4,742.83. The yield on the benchmark ten-year US Treasury bond briefly dipped below 3.8% just before the end of the year and currently stands below the 4% mark at 3.94%. Meanwhile, the euro fell to its lowest level in almost two weeks against the US dollar on Tuesday.

Asia-Pacific markets fell on Wednesday, with stocks in South Korea and Taiwan leading the declines as large technology companies, particularly chipmakers, came under pressure after Apple shares lost around 4% following a downgrade by Barclays. South Korea's Kospi fell 1.8%. Hong Kong's Hang Seng Index dropped 1.2%, while China's CSI 300 struggled to find its footing. In Australia, the S&P/ASX 200 lost 1.1% after hitting an all-time high on Tuesday. Japanese markets are closed until Thursday.

The latest survey data from Chinese business magazine "Caixin" showed a slight improvement in industrial sentiment. In contrast to the government's PMI, Caixin's PMI improved slightly from 50.7 to 50.8 points in December - the highest level since August 2023. The government's sentiment indicator, on the other hand, remained well below the growth threshold of 50 points at 49.0. The difference lies in the perspective. The government PMI mainly covers large and state-owned enterprises, while the Caixin indicator also includes medium-sized companies.

In the eurozone, industrial sentiment improved slightly at the end of last year. The S&P Global Purchasing Managers' Index rose from 44.2 to 44.4 points, but remains well in negative territory, signalling contraction in the sector. Nevertheless, the Euro-industrial PMI reached its highest level in seven months. However, a look at the trend in companies' new order books gives little cause for optimism.

British industry is also still in clear contraction. Sentiment deteriorated further in December, with the PMI falling from 47.2 to 46.2, after rising in each of the previous three months and reaching a seven-month high in November. Again, S&P Global pointed to weak order books among the companies surveyed.

Corporate news in focus: There is no major corporate news scheduled for today.

Economic data in focus: Spanish unemployment figures for December (09:00), Swiss purchasing managers' index for industry for December (09:30), German unemployment figures for December (09:55), US ISM purchasing managers' index for industry for December (16:00) and FOMC minutes from the interest rate decision on 13 December (20:00).


LGT helps you make informed investment decisions

All about global economic and market trends at a glance

You can also follow us on Facebook or LinkedIn – or visit Insights and discover interesting background articles. If you have questions, a consultant from the bank will be happy to help you.

Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.

Contact us