The alliance around the radical right-wing party “Fratelli d'Italia” (Brothers of Italy) can count on a governing majority in parliament after the election in Italy. According to projections, the alliance led by Giorgia Meloni is likely to become the strongest force with a share of the vote of around 26%. Meloni's coalition partners from the right-wing populist Lega and the conservative Forza Italia, on the other hand, slipped in voters' favor. The Social Democrats, who had previously been in government, have already acknowledged the right-wing's victory and intend to go into opposition. The party of the "Brothers of Italy" was only founded in 2012 by a splinter group from Berlusconi's party “Il Popolo della Liberta” (The People of Freedom) and has its roots on the far right of the Italian political spectrum with links to Italy's fascist legacy from the Mussolini era.
In the financial markets, the election result in Italy is likely to cause additional unrest. Already on Friday, heightened fears of recession had put pressure on share prices on Wall Street, and in Asia, too, the downward trend continued at the start of the week. The Dow Jones Industrial fell at times by -2.7% well below the mark of 30'000 points and reached the lowest level since the end of 2020. In the end, Friday resulted in a daily loss of -1.62% and the Dow went out of trading at 29'590.41 points. The S&P 500 closed -1.72% lower at 3'693.23 points and on the Nasdaq, the indices fell by about -1.7%.
In the bond market, the yield on ten-year US government bonds climbed at times to 3.83% a 12-year high and is currently quoted at 3.75%. In view of the sharp rise in interest rates on the capital markets, the price of gold recently reached its lowest level since April 2020. At the beginning of the week, the troy ounce of the precious metal was trading at around USD 1'637. On the foreign exchange market, investors fled into the US dollar and the euro fell to its lowest level in around 20 years.
The stock markets in the Asia-Pacific region are partly under strong pressure at the start of the week. In Tokyo, the Nikkei 225 trades around -2.4% lower and the South Korean Kospi loses about -2.7%. The Hang Seng Index in Hong Kong, however, is slightly up at the end, driven by a recovery in tech stocks. The Hang Seng Tech Index rises by more than +2%. In mainland China, the Shanghai Composite is down slightly, while the Shenzhen Component is up around +0.6%. MSCI's broadest index of Asia-Pacific equities outside Japan falls around -1.2%.
S&P Global's private sector purchasing managers' index signaled a further deterioration in corporate sentiment in the euro area both in the industrial and services sectors. The PMI slipped to 48.2 in September from 48.9 points the previous month, registering the lowest reading in 20 months. According to S&P chief economist Chris Williamson, a recession in the eurozone must be expected in view of the deteriorating business situation and increasing price pressure due to rising energy costs.
The same picture was painted by the PMI for the UK's services and manufacturing sector. the PMI fell by a larger-than-expected 1.2 points to 48.4 in September - the lowest level since January 2021. S&P commented, “The UK's economic malaise worsened in September.”
|08:00||GE||GDP Q2 (q/q)||+0.1%|
|10:00||GE||Ifo Business Climate Index (September)||+88.5|
|14:30||US||Chicago Fed National Activity Index (August)||+0.27|
|15:00||EZ||ECB President Lagarde speaks|
|19:00||GE||Bundesbank President Nagel speaks|
|SZ||Georg Fischer||Capital Markets Day|
Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi, E-Mail: email@example.com
Source: LGT Bank (Switzerland) Ltd.
Risk Disclosure (Disclaimer)
This publication is an advertising material / marketing communication. This publication is intended only for your information purposes. It is not intended as an offer, solicitation of an offer, or public advertisement or recommendation to buy or sell any investment or other specific product. The publication addresses solely the recipient and may not be multiplied or published to third parties in electronic or any other form. The content of this publication has been developed by the staff of LGT and is based on sources of information we consider to be reliable. However, we cannot provide any confirmation or guarantee as to its correctness, completeness and up-to-date nature. The circumstances and principles to which the information contained in this publication relates may change at any time. Once published information is therefore not to be interpreted in a manner implying that since its publication no changes have taken place or that the information is still up to date. The information in this publication does not constitute an aid for decision-making in relation to financial, legal, tax or other matters of consultation, nor should any investment decisions or other decisions be made solely on the basis of this information. Advice from a qualified expert is recommended. Investors should be aware of the fact that the value of investments can decrease as well as increase. Therefore, a positive performance in the past is no reliable indicator of a positive performance in the future. The risk of exchange rate and foreign currency losses due to an unfavorable exchange rate development for the investor cannot be excluded. There is a risk that investors will not receive back the full amount they originally invested. Forecasts are not a reliable indicator of future performance. In the case of simulations the figures refer to simulated past performance and that past performance is not a reliable indicator of future performance.
The commissions and costs charged on the issue and redemption of units are charged individually to the investor and are therefore not reflected in the performance shown. We disclaim, without limitation, all liability for any losses or damages of any kind, whether direct, indirect or consequential nature that may be incurred through the use of this publication. This publication is not intended for persons subject to a legislation that prohibits its distribution or makes its distribution contingent upon an approval. Persons in whose possession this publication comes, as well as potential investors, must inform themselves in their home country, country of residence or country of domicile about the legal requirements and any tax consequences, foreign currency restrictions or controls and other aspects relevant to the decision to tender, acquire, hold, exchange, redeem or otherwise act in respect of such investments, obtain appropriate advice and comply with any restrictions. In line with internal guidelines, persons responsible for compiling this publication are free to buy, hold and sell the securities referred to in this publication. For any financial instruments mentioned, we will be happy to provide you with additional documents at any time and free of charge, such as a key information document pursuant to Art. 58 et seq. of the Financial Services Act, a prospectus pursuant to Art. 35 et seq. of the Financial Services Act or an equivalent foreign product information sheet, e.g. a basic information sheet pursuant to Regulation EU 1286/2014 for packaged investment products for retail investors and insurance investment products (PRIIPS KID).