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Interest rates and monetary policy remain the main drivers on the stock markets

Slightly weakening yields on the bond market and positive guidance from Europe as well as solid economic data from China ensured price gains on Wall Street ahead of the weekend. The somewhat weaker US ISM purchasing managers index for the service sector did not influence the mood on markets. This week is likely to focus primarily on Fed Chairman Jerome Powell’s speech before the Finance Committee on Capitol Hill on Tuesday and Wednesday as well as the US labour market report and interest rate decision of the Bank of Japan on Friday. 

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Alessandro Fezzi, LGT
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The Dow Jones Industrial rose 1.17% to 33,390.97 points on Friday, posting a positive balance of 1.7% for the week after rising interest rates previously kept stock markets in check. On Friday, however, the benchmark yield on ten-year US government bonds eased and is now trading just below the four percent mark again at 3.95%. The S&P 500 rose 1.61% to 4,045.64 points and on the Nasdaq the indices rose by about two percent, driven by price gains in tech heavyweights Apple and Amazon. On a weekly basis, the Nasdaq indices thus recorded a solid gain of 2.7%. The decline in the ISM services purchasing managers index in February by 0.1 to 55.1 points had no impact on trading activity in New York. Analysts had expected a sharper decline to 54.5 points.

The start of the week on Asia's stock exchanges was mixed. In Tokyo, the Nikkei 225 rose by 1.2% and in South Korea, the Kospi rose by 0.4%. In contrast, the Hang Seng Index in Hong Kong fell by 0.4% and in mainland China, the Shanghai Composite fell by 0.2% and the Shenzhen Component fell by 0.3%. The focus here was on the annual session of China's National People's Congress, which runs until March 13. At this meeting, state and party leader Xi Jinping will be confirmed for an unprecedented third term as president.

Corporate news today in focus: SNB with annual figures and in the U.S. the industrial supplier Fastenal with its Q2 sales.

Economic data today in focus: Swiss inflation rate February (08:30 CET), Sentix investor confidence March (10:30), Eurozone retail sales January (11:00) and from the U.S. industrial new orders January (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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