Partly heavy losses in technology stocks caused a slump on the Nasdaq. The Nasdaq Composite fell by -2.55% to 13'401.86 points and the Nasdaq 100 lost -2.63% at the beginning of the week and ended up at 13'359.08 points. The Dow Jones Industrial initially still climbed in early trading above the much-watched mark of 35'000 points and reached a record high for the fourth trading day in a row. However, pressure from tech stocks melted away the gains in the Dow and so the stock market barometer ended Monday with a slight loss of -0.1% at 34'742.82 points. The S&P 500 declined about -1% to 4'188.43 points.
In Asia, the trend dominated by the slump in US technology stocks continued and most stock indices recorded losses. In Tokyo, the 225-stock Nikkei index loses as much as -3.3% and in Hong Kong, the Hang Seng index trades -2.3% lower. A look at the futures markets shows that the negative trend from overseas will continue today on Europe's stock exchanges.
Investment professionals are more optimistic about the economic outlook for the eurozone than they have been for three years. This can be seen in the Sentix index, which rose by 7.9 points to 21 in May, marking the third consecutive increase. The last time the indicator was higher was in March 2018. Analysts had only expected the Sentix, which measures how private and institutional investors evaluate the economic outlook and the current economic situation, to rise to 15 points. The expectations sub-index even rose to an all-time high of 36.8 points. The recession caused by the corona crisis has been overcome, the survey company commented on the result. The Sentix is considered an indicator for other important economic indices, such as the Ifo business climate index, which is published later in the month.
In the eurozone, the economy should reach a turning point around June from where the recovery path should accentuate, the chief economist of the European Central Bank (ECB), Philip R. Lane, is convinced. However, it will take some time before the pre-crisis level is reached again. This is not expected to happen for at least a year. Sustained support from monetary and fiscal policy will remain necessary. The ECB's EUR 1.85 trillion Pandemic Emergency Purchase Program (PEPP) runs until at least the end of March 2022, and the ECB will reassess the measures at its next meeting on June 10, Lane said.
The cyberattack on American pipeline operator Colonial Pipeline not only led to rising gasoline prices in the United States on Monday, but also exposed the vulnerability of the US energy sector to hacking attacks. The malware attack forced the shutdown of the largest pipeline in the United States over the weekend. Colonial supplies gasoline and diesel to the East Coast of the US in particular, meeting about 45% of demand. According to experts, a short shutdown should not cause any major problems, but supply bottlenecks could occur after around five days. The US gasoline prices have increased on Monday by about 2%. With the attack, however, the inadequate protection concepts in the energy supply are also coming to the fore. Security experts have been complaining for years that hardly any US pipeline operators are armed against cyber-attacks.
The focus is also on the monthly OPEC oil market report to be published today, which contains new forecasts on global demand and production estimates.
|10:00||IT||Industrial Production (March, y/y)||-0.6%|
|11:00||GE||ZEW Economic Outlook Investors (May)||70.7|
|11:00||EZ||ZEW Economic Outlook Investors (May)||66.3|
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Source: LGT Bank (Switzerland) Ltd.
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