The Dow Jones Industrial posted a solid daily gain of +1.09% on Friday and closed at 35'294.76 points. On a weekly basis, this resulted in an increase of +1.6%. Positive impetus was provided by the latest sales figures from the US retail industry and solid results from major US banks. On Friday, the investment bank Goldman Sachs was able to convince with its quarterly results. The broad S&P 500 rose at the same time by +0.75% to 4'471.37 points and on the Nasdaq technology exchange, the indices rose about +0.65%.
In Asia, most stock indices could not benefit from the positive guidance from overseas and recorded slight losses at the beginning of the week. The background is on the one hand the latent inflation fears and on the other hand the current economic data from China, which point to a slowdown in the world's second largest economy. Thus, the upturn in the Chinese economy lost momentum in the third quarter against the backdrop of energy shortages and uncertainties in the real estate sector. GDP still grew by +4.9% year-on-year. This follows record growth of +18.3% in Q1 and +7.9% in Q2. Over the January-September period, combined growth was thus +9.8%.
The focus this week continues to be on the corporate reporting season that has just begun. Highlights include: Kering and Netflix on Tuesday, Roche, IBM and Tesla on Wednesday, ABB, SAP or Intel on Thursday, and Sika, Rieter, Renault or American Express on Friday.
The American retail sector took in surprisingly more than expected in September. Thus, sales increased by +0.7% compared to the previous month, the Department of Commerce announced on Friday in Washington. Analysts had expected a decline of -0.2%. Consumers have spent more in restaurant and bars. The sale of vehicles, on the other hand, has shrunk. The auto industry is suffering particularly badly from supply shortages, which are leading to production constraints and keeping inventories low at auto dealers nationwide. Sales data can fluctuate widely from month to month and currently also reflect rising prices, as they are not adjusted for inflation. Meanwhile, consumer sentiment has dimmed. The University of Michigan's consumer sentiment index fell -1.4 points to 71.4 in October compared to the previous month. Analysts had expected a slight increase. Thus, the consumer climate remains at a low level. In particular, the increase in prices weighs on sentiment, the survey noted.
China's central bank spoke out for the first time on Friday on the highly indebted Evergrande real estate group. The effects of the crisis on the financial system are controllable, the central bank's statement said. Earlier, Bloomberg news agency reported that the government in Beijing had asked major domestic banks to ease real estate lending to reduce the risk of the crisis spreading. The real estate giant suspended interest payments on a US dollar-denominated bond on September 23, sending shock waves through international financial markets. Further defaults have followed since. So far, the impact of Evergrande's debt crisis has been limited to the Chinese real estate market, where other real estate companies are now facing payment difficulties. Evergrande is currently the most indebted company in the world, with obligations of over USD 300 billion. A thirty-day grace period is currently running in which the group can restructure the missed interest payments. If it fails to do so, it faces bankruptcy this week.
Inflation in France rose again in September. Thus, prices have increased by +2.7% compared to the same month last year, reported the statistics office Insee on Friday in Paris. In August, the growth was +2.4%. The reason for the increase were higher prices for services and energy, while the price increase of industrial goods and food and beverages weakened somewhat.
Price growth also continued in Italy. The inflation rate rose to +2.9% year-on-year in September, as reported by the Istat statistics office in Rome on Friday. In August, it was+2.5%. In addition to higher energy prices, Italians also have to dig deeper into their pockets for food and alcohol, durable goods and services.
|15:15||US||Industrial production (September, y/y)||+5.95%|
|16:00||US||NAHB Housing Market Index (October)||+76.0|
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Source: LGT Bank (Switzerland) Ltd.
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