Skip navigation Scroll to top
Scroll to top

LGT Navigator: Interest rate worries weigh on stock market sentiment

August 9, 2022

The prospect of a further rise in interest rates was underpinned once again by the strong US labor market report and is causing caution on the stock markets. The focus is now shifting to the latest consumer price data expected in the middle of the week from the US, which will provide information on the inflation trend and the direction of the US Federal Reserve. 

Sentiment

In New York, the Dow Jones Industrial went out of trading virtually unchanged at 32,832.54 points (+0.09%), while the S&P 500 fell by -0.12% to 4,140.06 points. On the Nasdaq technology exchange, a disappointing result from Nvidia weighed on sentiment and the indices fell by about -0.4%. 

In Asia, the stock markets have shown no clear direction on Tuesday. In Tokyo, the Japanese benchmark index Nikkei 225 is down by almost -1%, while the indices in Hong Kong and Shanghai were slightly higher. 

Economic outlook for eurozone slightly improved according to Sentix

According to the latest survey results of the financial analysis company Sentix, the outlook for the euro economy brightened in August, contrary to expectations. The economic indicator climbed from minus 26.4 to minus 25.2 points, breaking away from the two-year low reached in July. Analysts had on average expected a further decline to minus 29.0 points. 

EU gas emergency plan enters into force

The European emergency plan to prepare for a possible halt in Russian natural gas supplies enters into force today. The plan calls for all EU countries to voluntarily reduce their gas consumption by 15% from the beginning of August until March next year, compared to the average consumption of the past five years during this period. Against the backdrop of the Ukraine war, Russia has already drastically reduced its supplies to the EU and a complete supply freeze cannot be ruled out.    

Italian government bonds under increased pressure

After the rating agency Moody's lowered the outlook for Italy's credit rating (Baa3) to negative at the end of last week, yields on Italian government bonds rose at the beginning of the week. Ten-year government bonds yielded over 3% at times. In the run-up to the parliamentary elections scheduled for September 25, Italy is thus threatened with a fall into the “junk” range. 

 

Economic Indicators August 9

MEZ Country Indicator Last period
14:30 US Productivity Q2 (q/q, ex agrar)  -7.3%
14:30 US Unit Labor Cost Q2 (q/q) +12.6%

 

Earnings Calender August 9

Country Company Period
SZ Alcon Q2
GE Munich Re  Q2
GE Continental H1
US Warner Music Group Q3

 

LGT helps you make informed investment decisions

All about global economic and market trends at a glance

Subscribe to LGT's research newsletters

You can also follow us on Facebook or LinkedIn – or visit MAG/NET and discover interesting background articles. If you have questions, a consultant from the bank will be happy to help you.

 

Imprint
Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi, E-Mail: lgt.navigator@lgt.com
Source: LGT Bank (Switzerland) Ltd.

 

Risk Disclosure (Disclaimer)
This publication is an advertising material / marketing communication. This publication is intended only for your information purposes. It is not intended as an offer, solicitation of an offer, or public advertisement or recommendation to buy or sell any investment or other specific product. The publication addresses solely the recipient and may not be multiplied or published to third parties in electronic or any other form. The content of this publication has been developed by the staff of LGT and is based on sources of information we consider to be reliable. However, we cannot provide any confirmation or guarantee as to its correctness, completeness and up-to-date nature. The circumstances and principles to which the information contained in this publication relates may change at any time. Once published information is therefore not to be interpreted in a manner implying that since its publication no changes have taken place or that the information is still up to date. The information in this publication does not constitute an aid for decision-making in relation to financial, legal, tax or other matters of consultation, nor should any investment decisions or other decisions be made solely on the basis of this information. Advice from a qualified expert is recommended. Investors should be aware of the fact that the value of investments can decrease as well as increase. Therefore, a positive performance in the past is no reliable indicator of a positive performance in the future. The risk of exchange rate and foreign currency losses due to an unfavorable exchange rate development for the investor cannot be excluded. There is a risk that investors will not receive back the full amount they originally invested. Forecasts are not a reliable indicator of future performance. In the case of simulations the figures refer to simulated past performance and that past performance is not a reliable indicator of future performance.

The commissions and costs charged on the issue and redemption of units are charged individually to the investor and are therefore not reflected in the performance shown. We disclaim, without limitation, all liability for any losses or damages of any kind, whether direct, indirect or consequential nature that may be incurred through the use of this publication. This publication is not intended for persons subject to a legislation that prohibits its distribution or makes its distribution contingent upon an approval. Persons in whose possession this publication comes, as well as potential investors, must inform themselves in their home country, country of residence or country of domicile about the legal requirements and any tax consequences, foreign currency restrictions or controls and other aspects relevant to the decision to tender, acquire, hold, exchange, redeem or otherwise act in respect of such investments, obtain appropriate advice and comply with any restrictions. In line with internal guidelines, persons responsible for compiling this publication are free to buy, hold and sell the securities referred to in this publication. For any financial instruments mentioned, we will be happy to provide you with additional documents at any time and free of charge, such as a key information document pursuant to Art. 58 et seq. of the Financial Services Act, a prospectus pursuant to Art. 35 et seq. of the Financial Services Act or an equivalent foreign product information sheet, e.g. a basic information sheet pursuant to Regulation EU 1286/2014 for packaged investment products for retail investors and insurance investment products (PRIIPS KID).