After the short breather at the start of the week, US stock markets have recorded gains again on Tuesday. The S&P 500 climbed +0.8% to 4423.15 points and thus closed at a new all-time high. The Dow Jones also advanced +0.8% to 35’116.40 points and the Nasdaq Composite gained +0.6% to 14’761.29 points. Good earning figures have thus once again pushed back the concerns about a new wave of pandemics.
Even the falling oil prices were not able to dampen market sentiment. These continue their downward slide on Wednesday. The spread of the delta variant in the US and China, the world's two largest oil consumers, is causing uncertainty. Thus, the protective measures in numerous Chinese provinces were tightened again to bring local trouble spots under control. Analysts fear that renewed restrictions on economic life could dampen demand for crude oil.
Good economic data provide gains on the Asian stock exchanges on Wednesday. Activity in China's service sector accelerated in July, according to the Caixin/Markit Purchasing Managers Index. The service PMI rose to 54.9 points from 50.3 points in June, well within the growth range. However, this data was collected before the recent corona virus outbreaks. The Shanghai Composite advances +0.7% and the Hang Seng in Hong Kong gains +1.2%. In Tokyo, the Nikkei loses -0.2%.
As in the US, the reporting season in Europe is very encouraging. More than half of the 600 largest European companies have published their earnings so far, of which around two thirds have exceeded market expectations. Accordingly, the STOXX 600, which includes the shares of these companies, closed at a new high on Tuesday (+0.2% to 465.38 points). Among the biggest winners were the shares of the energy company BP (+5.6%) and the major French bank Société Générale (+6.4%).
American manufacturing companies landed more orders than expected in June. Compared to the previous month, orders increased by +1.5%, having already risen by +2.3% in May. Analysts had forecast an increase of only 1%. In a year-on-year comparison, orders actually increased by +18.4%. This development suggests that industrial activity is likely to remain robust in the coming months. However, the ISM index on Monday showed that production is currently being held back by the scarce availability of raw materials.
Swiss consumer sentiment improved noticeably in July compared with the previous quarter. The consumer sentiment index, which is surveyed on a quarterly basis, climbed to 7.8 points and was thus significantly better than in April (-6.5 points). The index has thus made up for the setback caused by the corona crisis and is now at its highest level since July 2010, according to the State Secretariat for Economic Affairs (Seco). The good mood is primarily due to the assessment of the general economic trend, with the sub-index climbing to its highest value since the survey began in 1972. Accordingly, the survey participants also assess the outlook for the labor market and the employment situation as better. In view of the rising prices, however, consumers are reluctant to make major purchases. In the future, they expect prices to rise even more sharply than before.
|02:30||CNY||Caixin PMI Services (July)||50.3|
|10:00||CH||Kof economic sentiment survey|
|10:00||EZ||PMI Services (July)||58.3|
|11:00||EZ||Retail sales (June)||+4.6%|
|16:00||US||PMI Services (July)||60.1|
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Source: LGT Bank (Switzerland) Ltd.
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