LGT Navigator

Rising interest rates and inflation concerns continue to keep stock markets in check

Share prices currently remain strongly dependent on movements on the bond markets. Yields on ten-year US government bonds returned to the 4%-mark, thus depressing prices on Wall Street. In addition, a slump in the shares of the investment house Goldman Sachs weighed on stock market sentiment in New York. In Asia, the stronger-than-anticipated manufacturing PMI laid the ground for partially strong gains on stock markets.

Alessandro Fezzi, LGT
Reading time
5 minutes

The Dow Jones Industrial closed on Tuesday with a daily loss of 0.71% at 32’656.70 points. The S&P 500 fell by 0.3% to 3’970.15 points and on the Nasdaq, the indices ended yesterday with a moderate minus of around 0.15%. The balance for February is mixed for the US indices: While the Dow lost more than 4%, the technology-heavy Nasdaq indices were able to just about hold their level from the end of January. Goldman Sachs shares fell by almost 4% after the Wall Street house announced at its investor day that it was looking for a strategic alternative for its loss-making private client business. On the bond market, the yield on ten-year US government bonds initially climbed to 3.98% and is currently trading at 3.95%, close to the 4%-mark. On the foreign exchange market, the US dollar pushed the euro back below 1.06. 

The stock markets in the Asia-Pacific region mostly rose in the middle of the week. The Hang Seng Index in Hong Kong rose by around 3.5%, leading the gains in the region. The Hang Seng tech index climbed more than 5%. On the Chinese mainland, the Shanghai Composite rose by 0.6% and the Shenzhen Component by 0.9%. Positive momentum was provided by the official Purchasing Managers' Index for China's manufacturing sector. The PMI reached 52.6 points in February (January: 50.1), the highest level since April 2012, and thus clearly exceeded expectations. In Tokyo, the Nikkei 225 rose moderately by 0.25%. 

Corporate news in focus today: Kuehne & Nagel, Georg Fischer, Swiss Life, Beiersdorf, Puma and Reckitt Benckiser with annual figures as well as Tesla’s investor day. 

Economic data in focus today: German consumer prices (14:00 CET) and the ISM purchasing managers' survey on the situation in the US industry (16:00 CET).

Rising consumer prices in France and Spain fuel inflation fears

In France, consumer prices surprisingly rose in February. At 7.2%, the inflation rate in the second largest economy in the eurozone reached the highest annual rate since the introduction of the euro. In January, the inflation rate stood at 7.0% and economists had expected an unchanged level. In a monthly comparison, price pressure increased significantly with a 1.0% rise in consumer prices. This was mainly due to higher prices for food and services.

In Spain, too, inflation surprisingly rose again in February. Consumer prices rose by 6.1% year-on-year, compared to an inflation rate of 5.9% at the beginning of the year. Compared to the previous month, Spanish consumer prices also rose by 1.0%.


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