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Stock markets wait for new clues

The majority of investors have remained on the sidelines. The main focus today is likely to be on US retail sales and producer price data. In addition, important monetary policy decisions will again be in focus next week. 

Alessandro Fezzi, LGT
Tempo di lettura
5 minuto
© Shutterstock

In New York, investors remained cautious in the middle of the week. The Dow Jones Industrial closed with a moderate gain of 0.1% at 39,043.32. The S&P 500 closed 0.2% higher at 5,165.31, while the Nasdaq indices lost around 0.8%. Tesla shares fell 4.5% to their lowest level since May after US bank Wells Fargo downgraded the stock to "underweight". In the bond market, the yield on ten-year US Treasuries was slightly higher at 4.19%.

In the US, the race for November's presidential election is beginning to heat up. Both US President Joe Biden and his challenger Donald Trump have secured the necessary number of delegates to be nominated as their party's presidential candidate. The official selection of candidates will take place at the Democratic and Republican National Conventions this summer. This means that nothing should stand in the way of another Biden-Trump showdown.

Asia-Pacific markets were mixed on Thursday after the rally on Wall Street faded. In Tokyo, the Nikkei 225 recouped its losses and gained around 0.1%, while the broader Topix posted a stronger gain of 0.3%. South Korea's Kospi rose 0.8%, while the Kosdaq fell 0.4%. Hong Kong's Hang Seng Index lost 0.9%, while mainland China's CSI 300 was flat. In Australia, the S&P/ASX 200 ended the day 0.2% lower, despite a rally in mining stocks on continued strength in gold.

While the US and European central banks have been more or less vocal about easing interest rates, Japan's central bank may be on the verge of its first monetary tightening since 2007. So far, the Bank of Japan has stubbornly stuck to the ultra-accommodative monetary policy stance it established in 2016, even though core inflation has been above its 2% target for more than a year. While the central bank has effectively eased its yield curve control policy on longer-term interest rates over the past 16 months, it has left its policy rate at -0.1% and continues to maintain a ceiling on the yield on 10-year Japanese government bonds at 1% as a benchmark. Meanwhile, the world's fourth-largest economy has narrowly avoided a technical recession and faces key wage negotiations that could fuel inflation. Most analysts currently expect the BoJ to remain on hold at its next rate decision on 19 March, but could then announce a first rate hike in April.

On Wednesday, the EU Parliament gave its final approval to the world's first comprehensive set of rules for artificial intelligence (AI) in the European Union. The EU AI law, originally adopted in 2021, will classify the technology into risk categories ranging from "unacceptable" - which would be tantamount to banning the technology - to high, medium and low risk. The vote in the European Parliament was close, with 523 votes in favour, 46 against and 49 abstentions. EU Internal Market Commissioner Thierry Breton said Europe was setting a global standard on AI. The new legislation will come into force later this year. 

Corporate news in focus: Q4 results from Swiss Life, Swiss Steel, Swissquote, Meyer Burger, K+S, Lanxess and Adobe's Q1 results.

Economic data in focus: Swiss producer and import prices, Spanish consumer prices, US retail sales, producer prices and weekly jobless claims. 

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Lten steht Ihnen ein Berater der Bank gerne zur Verfügung.

Herausgeber: LGT Bank (Schweiz) AG, Glärnischstrasse 36, CH-8027 Zürich
Redaktion: Alessandro Fezzi
Quelle: LGT Bank (Schweiz) AG