Market view and Insights
The purchasing managers' manufacturing index of the ISM (Institute for Supply Management) rose to 47.7 points in February, from 47.4 in the previous month (consensus 48.0) but remained below expectations. The indicator, which is important due to its correlation with overall economic growth, thus remains below the growth threshold of 50 points, signalling a contraction of the US industry and only moderate growth in the world’s largest economy for the fourth month in a row.
Sentiment on stock markets remains depressed in view of a further rise in interest rates. The benchmark yield on ten-year US government bonds climbed above the 4% mark for the first time since January. In addition, the president of the Minneapolis Fed, Neel Kashkari, expressed himself hawkish by saying the Fed will continue on the current path "until the job is done." The Dow Jones Industrial closed virtually unchanged (+0.02%) at 32’661.84 points, after the index had temporarily fallen to its lowest level since November. The S&P 500, however, fell 0.47% to 3’951.39 points and on the Nasdaq, the indices fell by about 0.9%.
The markets in the Asia-Pacific region were mostly weaker. In Tokyo, the Nikkei 225 traded slightly lower. In Hong Kong, the Hang Seng Index slipped 0.8%, while the Hang Seng Tech Index lost 1.6%. In mainland China, the Shenzhen Component fell 0.6% and the Shanghai Composite traded virtually unchanged.
Corporate news today in focus: VAT, Clariant, Merck KGaA, Anheuser-Busch InBev, Scor and Veolia with annual figures and from the US Best Buy and Dell with Q4 figures.
Economic data today in focus: Consumer prices for February from the eurozone, Italy and Austria and from the US the weekly initial jobless claims.
According to the latest survey results from S&P Global, sentiment among industrial companies in the eurozone deteriorated again in February. After improving three times, the Purchasing Managers' Index fell again to 48.5 points, below the previous month's reading of 48.8 and continuing to signal a contraction in the manufacturing sector. According to S&P chief economist Chris Williamson, however, it is possible to speak of stabilization. On the one hand, cost pressures have eased, and on the other, supply bottlenecks and the availability of raw materials have eased.
Meanwhile, the mood in the British industry has brightened considerably compared with the previous month. The S&P Global Purchasing Managers' Index rose by 2.3 points to 49.3 and reached its highest level in seven months.
All about global economic and market trends at a glance
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Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.
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AAA/Aaa: Borrower with highest credit quality. Default risk also virtually negligible over the longer term
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A: Safe investment as long as no unforeseen events impair the overall economy or sector
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BB/Ba: Speculative investment. Defaults must be expected if the economic situation deteriorates
B: Highly speculative investment. Defaults are likely if the economic situation deteriorates
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