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LGT Navigator: China dampens market sentiment

November 28, 2022

Protests due to strict Covid measures spread across China over the weekend. Demonstrators clashed with police in Shanghai and large crowds gathered in Beijing. In some cities, protestors damaged Covid testing sites. The protests add fresh uncertainty about the reopening of the world’s second-largest economy, which has stuck to a zero-Covid policy that is much stricter than curbs in place in most parts of the world.

China dampens market sentiment

In New York, stock market trading ended early on Friday due to the holiday celebrations surrounding Thanksgiving on Thursday. The Dow Jones Industrial ended up on the day +0.45%, finishing at 34,347.03 points. The S&P 500 fell a moderate -0.03% to close at 4026.12 points. Indices on the Nasdaq suffered larger losses, ending down roughly -0.7%.

In Asia, stock markets were mixed on the news of protests in China and a 75-basis-point interest rate hike in New Zealand, the largest in the history of that country’s central bank. Hong Kong’s Hang Seng index was trading up +0.81%, while in mainland China, the Shanghai Composite increased +0.26%. There was no trading on Japanese markets due to a public holiday.

German business sentiment improves

Germany’s economy grew in the third quarter by +0.4% versus the previous quarter, a faster growth rate than many market participants had expected. Household spending was the main driver of the increase. The data suggests the downturn in the German economy may prove to be less severe than many had feared after Thursday’s Ifo Business Climate Index for Germany improved on the previous month.

Thin Black Friday customer numbers indicate waning consumer sentiment

Customer numbers in the U.S. were moderate over the long Thanksgiving weekend, with retail stores forced to use heavy discounts to reel in shoppers. The weekend traditionally kicks off the start of busiest shopping season of the year. Falling consumer sentiment could signal to the U.S. Federal Reserve that inflationary pressures are easing, which could help to justify a slower pace of interest rate hikes. The University of Michigan Consumer Sentiment Index, which surveys consumer confidence, also fell in November compared with the previous month.


Economic Indicators November 28

CET Country Indicator Last period
10:00 EZ M3 money supply (October, y/y) +6.3%
16:30 US Dallas Fed general business activity index (November) -19.4
20:30 US CFTC speculative net positions - WTI 278,300
20:30 US CFTC speculative net positions - S&P 500 -202,600

Earnings Calender November 29

Country Company Period
CH Nestle (investor seminar)
GB Easyjet (annual figures, detailed)
FR Axa (Investor Day)


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