Against the backdrop of disappointing US retail sales, the still tense pandemic situation and its negative impact on economic recovery, the stock indices on the New York Stock Exchange fell yesterday after the previous record hunt. The Dow Jones Industrial closed -0.56% lower at 29 783.35 points. The S&P 500 also fell -0.48% to 3 609.53 points from the daily trading range. Meanwhile, Federal Reserve Chairman Jerome Powell again pressed for increased fiscal and monetary support for the economy. At the same time, Nancy Pelosi, the speaker of the House of Representatives, and Chuck Schumer, the Democratic caucus leader in the Senate, called on the Republican majority leader to resume negotiations on the stimulus package.
In Asia, most stock exchanges followed the lead from overseas and traded lower this morning. In Tokyo, the Nikkei index, which comprises 225 stocks, lost around -1%. The latest data on Japan's foreign trade did not provide any positive impetus. Although Japanese exports fell by -0.2% in October compared with the same period last year, the decline was much more moderate than economists had expected at -4.5%. In September, exports had still slumped by almost -5%. On the other hand, imports to Japan in October fell by -13.3% for the year as a whole, which was stronger than anticipated.
The American retail sector recorded only weak sales growth in October, which means that the recovery from the corona-related sales slump seems to be weakening again. In October, retailers reported +0.3% more sales than in the previous month, as reported by the Department of Commerce in Washington. Analysts had predicted a stronger sales increase of +0.5%, following solid growth of +1.6% in September. Consumers appear to be acting more cautiously in view of the ongoing corona crisis with economic restrictions, the difficult situation on the labor market and the still unclear starting position of the US elections in October. Moreover, politicians in Washington were not able to put together another economic stimulus package in order to relieve the burden on private households during the crisis.
By contrast, the US industry proved to be in relatively robust shape in October despite the ongoing corona crisis. Last month, companies increased their production more strongly than expected by +1.1% compared with the previous month (consensus +1.0%), after a decline of -0.4% was recorded in September.
While talks on future trade and security relations between the UK and the European Union continue in Brussels, the two parties may be close to a breakthrough, according to Bloomberg. Meanwhile, British Prime Minister Boris Johnson has been pressing for a deal, saying that it is far from certain that an agreement will be possible and that time is running out. He said Britain was keen to reach an agreement with the EU, but not at the expense of core principles of sovereignty, in particular control over laws, borders, finance and fisheries. EU chief negotiator Michel Barnier is scheduled to meet with the 27 national ambassadors of the EU on Friday to brief them on progress.
|08:00||UK||Consumer Prices (October, y/y)||+0.5%|
|08:00||UK||Core Consumer Prices (October, y/y)||+1.3%|
|11:00||EZ||Consumer Prices (October, y/y)||-0.3%|
|14:30||US||Housing Starts (October, m/m)||+1.9%|
|14:30||US||Building Permits (October, m/m)||+4.7%|
Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi, +41 44 250 78 59, E-Mail: email@example.com
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.