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Attempt at stabilization amid tension between interest rates and the economy

The latest data from the US jobs market supported recent statements by Fed Chairman Powell, who had held out the prospect of a further increase in interest rates due to more robust economic development. The official labour market report from Washington is now eagerly awaited on Friday. On Wall Street, share prices have nevertheless largely stabilized and in Asia, stock markets showed no clear trend. In China, meanwhile, the latest data on inflation in February were surprisingly moderate.

Alessandro Fezzi, LGT
Tempo di lettura
5 minuto
Aktien Chart
© Shutterstock

The Dow Jones Industrial closed yesterday after the losses of the previous day virtually unchanged at 32,798.40 points (-0.18%). The S&P 500 was quoted at the end of the day 0.14% higher at 3,992.01 points and on the technology exchange Nasdaq, the indices gained 0.5%. The focus remains on monetary policy and, following recent statements by Federal Reserve Chairman Jerome Powell, the prospect of further increases in interest rates. Tomorrow's labour market report from the United States will also have a decisive influence on the direction of the Fed. So far, the US job market has been extremely robust and could thus still be fuelling high inflation. The report by private labour market service provider ADP showed stronger-than-expected job growth in the American private sector. According to the report, 242,000 new jobs were created compared to the previous month, while analysts had expected an average of 200,000. In the bond market, the benchmark yield on ten-year US government bonds remained close to the four-percent mark at 3.98%.

Stock markets in the Asia-Pacific region trended inconsistently on Thursday. The focus here was the latest inflation data from China. Chinese consumer prices rose by “just” 1% year-on-year in February, well below the expected 1.9% and below January's inflation rate of 2.1%. In Shanghai, the composite index lost 0.3%, while in Hong Kong, the Hang Seng index gained 0.2%. The Nikkei 225 in Tokyo rose 0.5%. At the latest meeting of the Japanese central bank, chaired by Governor Haruhiko Kuroda, the Bank of Japan is not expected to change its ultra-loose monetary policy for the time being. However, Japan's economy grew at a slower pace than initially calculated in the final quarter of 2022 when considering higher inflation. According to revised data, gross domestic product rose at an annualized rate of 0.1%. A first calculation had still resulted in a growth of 0.6%.

In Europe, the statistics office Eurostat had reported that the economy in the euro area grew at a slightly slower pace in the final quarter of 2023 than previously assumed. Accordingly, gross domestic product stagnated compared with the previous quarter. A previous estimate had still shown a small growth of 0.1%. This was mainly due to a decline in consumer spending because of high inflation. In the third quarter, economic output in the euro zone had grown by 0.4%. The strongest growth in Q4 2022 was achieved by Greece with 1.4% and the strongest decline by Estonia with 1.6%. 

Corporate news in focus today: Rieter, Baloise, Hugo Boss, Deutsche Post, Hannover Re and Prada report annual figures. Credit Suisse presents its annual report. 

Economic data in focus today: The weekly reported initial jobless claims from the US (14:30 CET).

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