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LGT Navigator: Bargain hunters cause renewed recovery on the stock exchanges

December 3, 2021

On Wall Street, investors found attractive entry levels on Thursday and ensured a renewed recovery of the stock indices. At midweek, the infection with the new virus variant Omicron, which was also detected in the US for the first time, as well as inflation and interest rate fears had caused prices to fall. The US labor market report due this afternoon, which will be decisive, particularly for the Fed regarding the pace of the planned curbing of monetary policy, is likely to cause caution on the capital markets in the run-up. Moreover, it is still too early to assess the effect of the omicron variant.

Bargain hunters cause renewed recovery on the stock exchanges

While Europe's stock markets were still dominated yesterday by uncertainties surrounding the pandemic development – the EuroStoxx 50 closed -1.7% lower on Thursday – bargain hunters took to the floor on the New York Stock Exchange. The Dow Jones Industrial gained +1.82% to 34,639.79 points, more than making up for the previous day's loss. The S&P 500 gained +1.42% to close at 4,577.10 points, while on the Nasdaq the gains were more moderate at around +0.7%. On the political stage, the US Congress once again averted a feared government shutdown shortly before deadline. The House of Representatives and the Senate approved on Thursday evening an interim regulation that prevents a partial shutdown of government operations, which ensures the funding of the state apparatus until February 18.

In Asia, the announcement by Chinese ride-hailing company Didi that it would delist from the New York Stock Exchange caused a stir. The Chinese group had tangled with Chinese regulators over its USD 4.4 billion US IPO in July and has now said it will move its stock listing to Hong Kong.

US jobs report in focus of the markets and the Fed

This afternoon (2:30 p.m.), the official US labor market report is eagerly awaited, which covers the overall economy apart from the agricultural sector. If the recovery in the labor market continues, this could increase the pressure on the Federal Reserve to possibly accelerate the announced curbing of bond purchases. After strong job growth in October of 531,000 newly filled jobs, analysts expect an increase of 546,000 jobs in November. Meanwhile, short-term labor market data from the US deteriorated again somewhat, but not quite as much as analysts had forecast. The number of initial jobless claims rose last week by 28,000 to 222,000 claims. On average, a stronger increase to 240,000 claims had been expected. Weekly initial claims are considered a leading indicator of labor market developments.

Sustained rise in producer prices in the eurozone

In the euro area, producer prices rose more strongly than expected in October. On an annual basis, the price level increased by just under +22% (consensus +20%) and by +5.4% month-on-month (consensus +3.8%). Producer prices continue to be driven primarily by the energy sector - +62.5% on an annual basis. Producer prices tend to set the direction for consumer prices with a time lag.

Economic Indicators December 3

MEZ Country Indicator Last period
08:45 FR Industrial Production (October, m/m) -1.3%
09:15 ESP IHS Markit PMI Services (November) 56.6
09:30 EZ ECB President Lagarde Speech
09:45 IT IHS Markit PMI Composite (November) 54.2
09:50 FR IHS Markit PMI Composite (November) 56.3
09:55 GE IHS Markit PMI Composite (November) 52.8
10:00 EZ IHS Markit PMI Composite (November) 55.8
10:30 UK IHS Markit PMI Composite (November) 57.7
11:00 EZ Retail Sales (October, y/y) +2.5%
14:30 US Unemployment Rate (Novermber) 4.6%
14:30 US Non-Farm Payrolls (November) +531,000
15:45 US IHS Markit PMI Composite (November) 56.5
16:00 US ISM PMI Non-Manufacturing (November) 66.7
16:00 US Durable Goods Orders (October) +0.2%

 

Earnings Calender December 3

Country Company Period
GE Allianz Capital Markets Day

 

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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.

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