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Successful start to the week on Wall Street keeps sentiment in the green zone

The statements of Federal Reserve Chairman Powell at the much-noticed central bank symposium in Jackson Hole shook stock markets only very briefly at the end of last week, and investors continued to be in a buying mood at the beginning of the week. In this context, the reduction of the stamp duty on stock transactions announced in China was a positive driver and the latent interest rate worries seem to have receded into the background, at least temporarily. However, the focus is likely to turn back to US monetary policy soon, especially with the labour market report due at the end of this week. 

Alessandro Fezzi, LGT
Tempo di lettura
5 minuto
Wall Street green light
© Shutterstock

On the New York Stock Exchange, stock indices continued their recent recovery and posted gains across the board on Monday. The Dow Jones Industrial closed at 34,559.98 points 0.6% higher than the previous day. The broad S&P 500 also gained 0.6% and ended the week's opening trading at 4433.31 points. On the Nasdaq technology exchange, the indices gained about 0.8%. After Fed Chairman Jerome Powell recently emphasized that the further direction of monetary policy would be made dependent on the development of economic indicators, investors are now likely to focus on the labor market report from Washington, which is due on Friday. Meanwhile, on the bond market, the yield on ten-year US government bonds fell to 4.21%.

Investors are hopeful regarding the smoldering trade dispute between the United States and China. Thus, Washington and Beijing have agreed on the establishment of a new working group, which is to meet twice a year from the beginning of 2024. However, US Commerce Secretary Gina Raimondo also spoke of a "complicated" and "challenging" relationship between the two countries.

Asia-Pacific markets were up across the board Tuesday. In Tokyo, the Nikkei 225 rose 0.2%, while South Korea's Kospi was 0.3% higher and the Kosdaq 0.6% higher. In Hong Kong, the Hang Seng Index extended gains to close 1.8% higher, while mainland China's CSI 300 added 0.7%.

On Europe's stock exchanges, the main indices extended their gains yesterday. The benchmark EuroStoxx 50 index closed 1.3% higher at 4291.07 points on Monday. In the European sector comparison, there were only winners at the beginning of the week. The best performance was in the technology sector. Meanwhile, latest data from the European Central Bank (ECB) showed that sluggish economic growth in the euro area is increasingly affecting money supply growth. According to the report, broad money supply M3 fell in July for the first time since 2010. Over the year, the decline amounted to 0.4%. The narrower M1 money supply has already been declining for some time, falling by 9.2% year-on-year in July.

Corporate news in focus: HP Inc. Q3 figures.

Economic data in focus: Germany GfK consumer confidence September (08:00 am), Sweden GDP Q2 (08:00 am), France consumer confidence August (08:45 am), Hungary Central Bank, interest rate decision (02.00 pm), and out of the US, the FHFA index June (03:00 pm) and consumer confidence August (04:00 pm).

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