The Dow Jones Industrial lost -0.79% to 35'343.28 points on Tuesday, after reaching another record high the previous day. The market-wide S&P 500 also fell by -0.71% to 4'448.08 points. On the Nasdaq, the indices fell by almost one percent and the Nasdaq 100 traded at times at the lowest level in two weeks. In Asia, most stock indices trended sideways on Wednesday. New Zealand's central bank left its key interest rate unchanged against expectations at +0.1% in view of the renewed uncertainties regarding the corona pandemic. Analysts had actually expected an initial rate hike of up to 50 basis points. The focus of interest today is the minutes of the Federal Reserve's Monetary Policy Committee (FOMC minutes).
Fed Chairman Jerome Powell said at an event yesterday that it remains unclear what the recent increase in Covid-19 infection numbers means for the US economy. However, Powell did not comment on the outlook for the monetary policy.
A much sharper-than-expected decline in US retail sales points to a gloomier outlook for consumer spending in the United States. According to the latest data, retail sales declined by -1.1% in July compared with the previous month, while analysts had expected a much smaller drop of -0.3%.
On the other hand, US industrial production increased more than expected and for the third month in a row. Compared to the previous month, industrial output increased by +0.9% in July, exceeding the market consensus of +0.5%.
Japanese exports rose +37% year-on-year in July, driven by strong demand for cars and auto parts in the US and for chips and semiconductor equipment in China. The fifth consecutive monthly increase confirms the ongoing recovery trend.
Economic growth in the eurozone accelerated significantly in the second quarter compared with the previous quarter. With the easing of many corona measures, GDP expanded by +2%, confirming one of the economists' expectations. In the previous two quarters, the euro-area economy had contracted by -0.3% and -0.6% respectively. The strongest growth in the second quarter was reported by Spain with +2.8%, followed by Italy (+2.7%), Germany (+1.5%) and France (+0.9%).
China's regulator is looking to tighten the reins on domestic technology companies with new regulations. The regulator SAMR yesterday announced a series of regulatory proposals to curb market abuse and uncontrolled data processing by internet companies. The shares of the large Chinese tech companies Alibaba or Tencent came under pressure as a result.
|08:00||UK||Consumer Prices (July, y/y)||+2.5%|
|08:00||UK||Core Consumer Prices (July, y/y)||+2.3%|
|08:00||UK||Producer Prices (July, y/y)||+4.3%|
|11:00||EZ||Consumer Prices (July, y/y)||+2.2%|
|11:00||EZ||Core Consumer Prices (July, y/y)||+0.7%|
|14:30||US||Housing Starts (July, m/m)||+6.3%|
|14:30||US||Building Permits (July, m/m)||-5.3%|
Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
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Source: LGT Bank (Switzerland) Ltd.
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