The compromise reached in Washington in the dispute over raising the US debt ceiling did not set off fireworks on the stock markets, as a "last-minute solution" is more or less priced in. However, the graphics card, server and AI chip specialist Nvidia reached a stock market value of one trillion US dollars at times. The focus is now on the regular economic report of the US Federal Reserve. The so-called "Beige Book" is intended to provide information on the future direction of US monetary policy.
On the New York Stock Exchange, the stock indices got off to a mixed start on Tuesday after the long weekend. While technology stocks continued the rally from the end of last week, the blue-chip indices remained more or less unchanged. The Nasdaq 100 closed 0.4% higher at 14'354.99 points but had to give back most of the gains it had accumulated during the day. The focus remained on the shares of Nvidia, which rushed from record high to record high after the strong quarterly figures published last week and an optimistic outlook. The Dow Jones Industrial closed 0.15% lower than Friday at 33'042.78 points and the S&P 500 was unchanged at 4'205.52 points. Following the compromise reached over the weekend, a vote in the US Congress is now expected today. Approval is still considered uncertain. On the bond market, the yield on ten-year US government bonds fell slightly to 3.70%.
The consumer confidence barometer of the New York market research institute Conference Board set a positive tone. According to this indicator, the mood of Americans in May was less gloomy than expected. The indicator fell by 1.4 points to 102.3 (consensus 99.0). The Federal Reserve's "Beige Book" is eagerly awaited this evening at 20:00 CET. This will serve as the basis for decisions by the Federal Open Market Committee (FOMC) on monetary policy. The next interest rate decision is scheduled for 14 June.
In Asia, worse-than-expected economic data from China caused losses. In Hong Kong, the Hang Seng Index fell 2% to its lowest level this year. Stock markets in mainland China were also lower, with the Shanghai Composite down 0.55% and the Shenzhen Component down 0.75%. Earlier, China's manufacturing purchasing managers' index fell for the second month in a row to 48.8 points, clearly back in contraction territory. In Tokyo, the Nikkei 225 fell back from a 33-year high to post a one-day loss of around 1.1%. Australia's S&P/ASX 200
fell 1.3% after inflation rose more than expected to 6.8% (consensus 6.4%).
Europe's stock markets on Tuesday extended most of their losses from the previous day. The EuroStoxx 50 lost almost 0.7%, with the leading eurozone index closing just above its low for the day reached shortly before.
General economic sentiment in the Eurozone deteriorated again in May. The European Commission's monthly Economic Sentiment Indicator (ESI) fell by 2.5 points to 96.5 (consensus 98.8), its lowest level since November 2022. Companies in the retail sector were significantly more negative, it said. Meanwhile, inflation in Spain weakened noticeably in May. The annual inflation rate fell much more than expected from 3.8% in April to 2.9% (consensus 3.3%). In mid-2022, Spain's inflation rate was still more than 10%.
Corporate news in focus: Salesforce Q1 figures.
Economic data in focus: Switzerland retail sales in April (08:30 CET), France GDP Q1, consumer prices May and consumer spending April (08:45), Germany unemployment figures May (09:55), Italy GDP Q1 (10:00) and consumer prices May (11:00), Germany consumer prices May (14:00), USA purchasing managers index Chicago (15:45) and Fed Beige Book (20:00).
Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.