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Multi-day stock rally takes a break

Following stellar performance last week, stock markets took a breather to start the new week. While Wall Street just managed to hold on to last week’s gains, European and Asian equities were largely in the red on Monday and Tuesday. US Treasury yields continued to decline.

Shane Strowmatt, LGT
Tempo di lettura
5 minuto
Market numbers
© Shutterstock

In New York, the major stock indices were able to squeeze out mild gains on Monday. The Dow Jones Industrial gained 0.1% and the S&P 500 closed 0.2% higher. The Nasdaq-100 was up 0.4%.

European markets struggled to keep last week’s momentum going with the Euro Stoxx 50 down 0.4% at the end of Monday’s session. In individual stocks, UBS posted its first quarterly loss in multiple years early Tuesday, largely due to the integration of former rival Credit Suisse. The 785-million-dollar loss contrasts with underlying profit of 844 million dollars when excluding the impact of the takeover.

The Reserve Bank of Australia increased interest rates on Tuesday after leaving them unchanged for four months in a row. The move flies in the face of recent hopes that central banks have reached peak rates, but the increase in the cash rate by 25 basis points to 4.35% was largely expected by markets. The S&P/ASX 200 closed 0.3% lower.

In Japan, wages continued to fall for an 18th month in a row in September and consumer spending declined. Falling wages are putting pressure on consumers, who consequently have to reduce spending. Regular pay increases are one of the key pieces of data the Bank of Japan is looking for in order to unwind its ultra-loose monetary policy. Wages adjusted for inflation feel by 2.4% in September. The Nikkei 225 was down 1.4%.

Trade data released Tuesday out of China wasn’t encouraging for the development of the world’s second-largest economy. Imports defied market expectations by increasing in October while the pace of export contraction picked up. Exports fell by 6.4 on the year and imports increased by 3%. The data comes as the Chinese government has imposed several stimulus measures in an effort to kick-start the economy this year after its initial reopening in early 2023 was lacklustre. The Chiense economy relies heavily on exports of its manufactured goods to other countries. Hong Kong's Hang Seng Index was trading 1.3% lower, while the Shanghai Composite was up 0.1%.

Elsewhere in the Asia-Pacific region, stock markets were mostly trading lower on Tuesday. The region’s largest losses were in Korea, where the Kospi was trading down 2.5% after aftering shooting up on Monday due to a government ban on short-selling.

Corporate news in focus: Earnings figures from UBS, Daimler Truck, Nintendo, Hochtief, Uber, Enel.

Economic data in focus: Swiss unemployment rate (07:45 CET), German industrial production (08:00), Swiss foreign currency reserves (09:00), euro area producer prices (11:00), US trade balance (14:30).


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