Accentuated concerns about a further uncontrolled spread of the coronavirus variants with the consequence of renewed lockdowns caused major shocks on the stock markets on Monday. At the same time, the yield on ten-year US government bonds fell at times below 1.2% to a five-month low. In Europe, the benchmark index EuroStoxx 50 lost more than -2.5% and Wall Street also went downhill at the beginning of the week. The Dow Jones Industrial closed -2.09% lower at 33'962.04 points, its lowest level in almost a month. The broad S&P 500 fell -1.59% to 4'258.49 points and the technology stock index Nasdaq 100 lost -0.9% – closing at 14'549.09 points. A minimal support was at least a better-than-expected result from IBM. The group benefited from a good performance in the cloud and software business but also the global services business.
In Asia, the stock markets followed the negative trends from the US and Europe. In Tokyo, the 225-stock Nikkei index recorded a daily loss of -0.7% and in Hong Kong, the Hang Seng index lost -1.2%.
UBS, the major Swiss bank, benefited from favorable market conditions and positive investor sentiment in the second quarter, reporting a much higher-than-expected net profit of USD 2.01bn (+63% year-on-year). The bank's global wealth management business performed particularly well in the second quarter. Assets under management increased +4% to USD 3'230bn.
The US, EU, UK, Canada, New Zealand, Japan, and NATO have blamed China for recent cyberattacks. The mentioned countries are convinced that the hacking attack registered in March against the email software Exchange Server of the US technology company Microsoft was orchestrated by the Chinese Ministry of State Security (MSS). Since US President Joe Biden took office, the US government has taken a hard line on China in this regard. Financial markets are likely to follow the flaring up of geopolitical tensions with concern.
According to the Bundesbank, the German economy will continue its recovery. Europe's largest economy is likely to have bottomed out in the spring and returned to strong growth in the second quarter. In its monthly report presented yesterday, the central bank writes that the ongoing economic recovery is largely being driven by the service sector, while industry is suffering from bottlenecks in supply chains. Next week, the Federal Statistical Office will publish the first official data on the development of GDP from April to June inclusive.
|08:00||GE||Producer Prices (June, y/y)||+7.25|
|14:30||US||Building Permits (June, m/m)||-2.9%|
|14:30||US||Housing Starts (June, m/m)||+3.6%|
|SZ||Kuehne & Nagel||Q2|
|FR||Remy Cointreau||Q1 Sales|
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Source: LGT Bank (Switzerland) Ltd.
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