The Dow Jones Industrial posted a daily loss of -2.72% yesterday, closing at 25 445.94 points and the recent record hunt on the Nasdaq also came to a temporary end: the Nasdaq 100 fell by -2.03% to 10 002.69 points. The S&P 500 fell by -2.64% to 3 050.33 points. In Asia the trend continued and in Tokyo the Nikkei 225 decreased by -1.22% to 22 260.20 points. In Hong Kong and mainland China, stock exchanges remained closed today due to a public holiday.
According to the latest survey results of the Munich-based economic research institute Ifo, the mood of German companies brightened significantly in June. After a historic low in April, the much-noticed business climate barometer recovered further from 79.7 points in May to 86.2 points. According to Ifo, the recovery in June was also the strongest ever measured increase. For the first time since the beginning of the corona crisis, the companies surveyed also assessed the current situation more optimistically - both in the industrial sector and in the service sector. Ifo President Clemens Fuest summarized: The German economy sees light at the end of the tunnel.
In France, too, corporate sentiment in June has clearly recovered from the slump during the lockdown phase. The French business climate index climbed from 59.9 to 77.8 points. This is also the strongest rise ever measured since the start of the data series in 1980.
According to the International Monetary Fund (IMF), the effects of the coronavirus pandemic and the associated economic damage are likely to be even more serious than previously assumed. The slump in the global economy will therefore be much more severe than expected in the current year. Accordingly, in its revised growth forecast the Washington-based institution assumes that the global economy will contract by -4.9%. In April the forecast was still -3.0%. On the other hand, however, the IMF also anticipates a brilliant recovery next year, albeit not quite as strong as previously assumed, with global economic growth of +5.4% (previous forecast +5.9%).
The president of the Chicago Fed, Charles Evans, believes that a full recovery of the US economy from the recession following the corona pandemic will take several years. He does not expect the economy to reach pre-crisis levels until the end of 2022.
According to Philip Lane, Chief Economist of the European Central Bank (ECB), the central bank's bond purchase program is a more effective instrument than interest rate cuts in the current crisis environment. According to Lane, yields on long-term government bonds would react practically not at all to interest rate cuts in phases of market stress, as was shown before the start of the pandemic purchasing program PEPP. Measures directly targeting government bond yields are more effective because they reduce the relevant spreads in this market segment.
At today's Annual General Meeting of Deutsche Lufthansa, a decision is to be made on the billion-euro government financial package. The main bone of contention was the future right of the state to have a say. Major shareholder Heinz Hermann Thiele, in particular, was opposed. But now Thiele is said to be willing to give the green light despite his reservations. Thiele had sharply criticized the negotiated rescue plan with a state share of 20% in Lufthansa. With a share of 15.5% he could have brought the plan down. Today's decision is also of existential importance for Swiss.
According to Reuters, the German pharmaceutical and agrochemical group Bayer has reached an agreement with a large part of the plaintiffs to pay USD 11bn, thus freeing itself from a big part of the legacy liabilities from the Monsanto takeover.
|08:00||GE||GfK Consumer Climate Index July||-18.9|
|14:30||US||GDP Q1 Revision (q/q annualized)||-5.0%|
|14:30||US||Personal Consumption May (q/q)||-6.8%|
|14:30||US||Initial Jobless Claims (as of June 20)||1.508m|
|14:30||US||Durable Goods Orders May (m/m)||-17.7%|
Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi, +41 44 250 83 48, E-Mail: firstname.lastname@example.org
Source: LGT Bank (Switzerland) Ltd.
Risk Disclosure (Disclaimer)
This publication is an advertising material / marketing communication. This publication is for your information only and is not intended as an offer, solicitation of an offer, or public advertisement to buy or sell any investment or other specific product. Its content has been prepared by our staff and is based on sources of information we consider to be reliable. However, we cannot provide any confirmation or guarantee as to its being correct, complete and up to date. The circumstances and principles to which the information contained in this publication relates may change at any time. Information that has been published should therefore not be understood as implying that no change has taken place since its publication or that it is still up to date. The information in this publication does not constitute an aid for decision-making in relation to financial, legal, tax-related or other consulting matters, nor should any investment decisions or other decisions be made on the basis of this information alone. It is recommended that advice be obtained from a qualified expert. Investors should be aware that the value of investments can fall as well as rise. Positive performance in the past is therefore no guarantee of positive performance in the future. Investments in foreign currencies are also subject to fluctuations in exchange rates. We disclaim all liability for any loss or damage of any kind, whether direct, indirect or consequential, which may be incurred through the use of this publication. This publication is not intended for persons subject to legislation that prohibits its distribution or makes its distribution contingent upon an approval. Any person coming into possession of this publication shall therefore be obliged to find out about any restrictions that may apply and to comply with them. In line with internal guidelines, persons responsible for compiling this report are free to buy hold and sell the securities referred to in this report.