At the end of last week, technology stocks, which had previously come under pressure due to the adjustment to a forced pace of monetary policy normalization of the Federal Reserve, were able to recover further. On the Nasdaq, the indices gained around three-quarters of a percent on Friday. The Dow Jones Industrial, however, suffered from disappointing economic data and the nothing fully convincing quarterly results of large US banks. The Dow closed about half a percent lower before the long weekend. For the week, the Dow was down just under one percent. For its part, the S&P 500 remained virtually unchanged from the previous day.

JPMorgan Chase and Citigroup posted profit declines in the final quarter of 2021. While the banks still exceeded consensus expectations significantly in some cases , the quarterly statements failed to convince the market and the shares fell on Friday. JPMorgan reported net quarterly earnings per share of USD 3.33 (consensus USD 3.01) and Citi EPS of USD 1.46 (consensus USD 1.43).

China's central bank gives economy a helping hand and eases key interest rate

Amid weak economic growth in the final quarter of 2021, China's central bank today cut its key interest rate for the first time in nearly two years. Earlier, the Beijing statistics bureau reported that China's economy grew by “only” +4% in the final quarter of 2021. Viewed over the year, the world's second-largest economy achieved a growth rate of +8.1%. However, the strong increase over the year can mainly be explained by the low basis for comparison due to the first pandemic year 2020.

Clouded consumer sentiment in the US and weak year-end in the retail sector

US retailers posted a sharper-than-expected decline in sales in December. Compared to the previous month, retail sales slumped -1.9% at the end of last year, while analysts had forecast only a minimal decline of +0.1%.

Consumer sentiment also clouded at the beginning of the year. According to the University of Michigan the consumer confidence barometer in January fell to its lowest level in over ten years.

Unbroken inflation trend in the eurozone

In France, consumer price inflation was confirmed at +3.4% in December. The main driver continues to be energy prices, which rose by +18.5% year-on-year at the end of 2021. However, this means that inflation in the second-largest economy in the euro area has not risen further, at least for the first time since August. Moreover, France's inflation rate is significantly lower than that of Germany, for example, at +5.7%. Meanwhile, the inflation rate in Spain climbed to +6.6% in December – a massive jump from +5.5% in November - and thus reached its highest level in almost 30 years.

ECB chief Lagarde reaffirms her inflation outlook

Christine Lagarde, President of the European Central Bank (ECB), continues to expect inflation in the eurozone to moderate again later this year. At the end of 2021, the inflation rate in the euro zone reached a record high of +5.0%. The known inflation drivers will ease this year, Lagarde expressed her conviction, stressing that the ECB has flexibility to respond to different circumstances.

Economic Indicators January 17

Earnings Calender January 17

LGT helps you make informed investment decisions

All about global economic and market trends at a glance

Subscribe to LGT's research newsletters

You can also follow us on Facebook or LinkedIn – or visit MAG/NET and discover interesting background articles. If you have questions, a consultant from the bank will be happy to help you.

Imprint
Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi, +41 44 250 78 59, E-Mail: lgt.navigator@lgt.com
Source: LGT Bank (Switzerland) Ltd.

Risk Disclosure (Disclaimer)
This publication is an advertising material / marketing communication. This publication is for your information only and is not intended as an offer, solicitation of an offer, or public advertisement to buy or sell any investment or other specific product. Its content has been prepared by our staff and is based on sources of information we consider to be reliable. However, we cannot provide any confirmation or guarantee as to its being correct, complete and up to date. The circumstances and principles to which the information contained in this publication relates may change at any time. Information that has been published should therefore not be understood as implying that no change has taken place since its publication or that it is still up to date. The information in this publication does not constitute an aid for decision-making in relation to financial, legal, tax-related or other consulting matters, nor should any investment decisions or other decisions be made on the basis of this information alone. It is recommended that advice be obtained from a qualified expert. Investors should be aware that the value of investments can fall as well as rise. Positive performance in the past is therefore no guarantee of positive performance in the future. Investments in foreign currencies are also subject to fluctuations in exchange rates. We disclaim all liability for any loss or damage of any kind, whether direct, indirect or consequential, which may be incurred through the use of this publication. This publication is not intended for persons subject to legislation that prohibits its distribution or makes its distribution contingent upon an approval. Any person coming into possession of this publication shall therefore be obliged to find out about any restrictions that may apply and to comply with them. In line with internal guidelines, persons responsible for compiling this report are free to buy hold and sell the securities referred to in this report.