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Stock markets remain under pressure, Big Tech moves into focus

Stock markets in Asia were trading lower on Monday after the major indices on Wall Street dropped to finish last week. The uncertainty around the conflict in the Middle East as well as soaring Treasury yields remain on investors’ minds. Gold was up 2.5% last week, it’s second consecutive week of gains, underscoring the risk-off mood on markets. Big Tech earnings could come to the recue this week with earnings due from several high-profile US tech companies.

Shane Strowmatt, LGT
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Geopolitical tensions remained a drag on markets as investors continue to wait for an Israeli ground offensive in the Gaza Strip. Clashes with the Hezbollah militant group on the northern border with Lebanon at the weekend were stirring up fears that the crisis could broaden into a regional conflict. Meanwhile, the US and several European countries issued a statement in support of Israel.

In the Asia-Pacific region, stock markets started the week on a cautious note. Traders are awaiting inflation figures from the region this week, notably for Tokyo on Friday. Tokyo’s inflation figures are generally considered a leading indicator for Japan’s national inflation. In Tokyo, the Nikkei 225 was down 0.6% in Monday trading and South Korea’s Kospi lost 0.7%. In Australia, the S&P/ASX 200 was trading 0.9% lower. The Consumer Price Index (CPI) for Hong Kong came in hotter than expected in September at 2% when compared with the same month a year earlier. Hong Kong's Hang Seng Index was down 0.7%, while the Shanghai Composite fell 0.8%.

In New York, stock indices were similarly weak to end last week. The Dow Jones Industrial lost 0.9% on Friday and the S&P 500 fell 1.3%. Tech stocks led losses, with the Nasdaq-100 down 1.5%.

Monday is a bit slower on the earnings front, but the rest of the week will give investors plenty of material to digest. Big Tech takes centre stage later this week with firms such as Alphabet (Tuesday), Microsoft (Tuesday), Meta (Wednesday) and Amazon (Thursday) presenting quarterly figures.

Wrapping up last week’s economic data, German producer prices plummeted in September in year-on-year terms as the effects of price spikes related to the war in Ukraine last year disappeared from the comparison period. Producer prices dropped 14.7% in September of 2023 when compared with the same month of 2022. In September 2022 producer prices spiked more than at any time on record, gaining 45.8%. Consumer inflation in Germany was also coming down rapidly having gained 4.3% in September. That number is still more than double the European Central Bank’s inflation target of 2%.

Corporate news in focus: Philips Q3 figures.

Economic data in focus: Swiss M3 money aggregate (09:00 CET), EU and euro zone Consumer Confidence Indicator (16:00).


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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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