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Investors look ahead to a week of central bank decisions

US equity markets ended last week on a positive note even as many investors chose to stay on the sidelines ahead of the US Federal Reserve’s (Fed) interest rate decision due on Wednesday. Traders are awaiting US inflation data due Tuesday for a final signal as to whether the Fed could surprise with a rate hike, like the Bank of Canada and the Reserve Bank of Australia did last week. The European Central Bank (ECB) and Bank of Japan (BoJ) are also scheduled to make interest decisions later in the week.

Shane Strowmatt, LGT
Reading time
5 minutes
Federal Reserve written on a wall
© Shutterstock

In New York, stock markets managed to squeeze out minor gains at the end of the week with tech stocks once again leading the pack. The S&P 500 gained 0.11% to finish Friday’s session at 4298.86 points. The Dow Jones Industrial increased 0.13%, closing at 33,876.78 points. The Nasdaq-100 made a gain of 0.3% to end at 14,528.36 points. Tesla shares jumped 4.06% on Friday. General Motors said it will join Ford in using Tesla’s charging network, bringing Telsa’s charging stations one step closer to becoming the US standard.

In Europe, French Finance Minister Bruno Le Maire said food companies operating in his country will cut prices next month after being threatened with financial sections. The government has sought to rein in consumer inflation and has targeted food companies, whose raw material prices in many cases are falling. The ECB is due to announce its latest interest rate decision on Thursday as it continues to battle high inflation on the continent. Equity markets in Europe mostly ended Friday’s session in the red with the Euro Stoxx 50 down 0.18%, Germany’s DAX losing 0.25% and Switzerland’s SMI falling 0.48%.

In the Asia-Pacific region, stock markets were mixed on Monday. In Japan, inflation data released Monday showed wholesale price increases slowing to 5.1% on the year in May. The BoJ will assess five months of falling wholesale prices when it makes its interest rate decision at the end of the week. The Nikkei 225 was trading up 0.4% Monday. South Korea’s Kospi was trading about 0.6% lower. Hong Kong's Hang Seng Index was likewise down by around 0.6%. In mainland China, the Shanghai Composite lost 0.3% and the Shenzhen Component was trading slightly in positive territory.

Corporate news in focus: No major corporate news scheduled today.

Economic data in focus: No major economic data scheduled today.

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

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