On the New York Stock Exchange, the most recent price rally initially continued, but was then weighed down primarily by profit-taking and the still faltering negotiations on the new US economic stimulus package. At the start of trading, the Dow Jones Industrial broke through the 28 000 mark for the first time since the end of February, but then closed -0.38% lower at 27 686.91 points. The S&P 500 fell by -0.8% to 3 333.69 points and the technology-heavy Nasdaq 100 index even dropped by -1.9%. Profit taking also dominated gold trading. The price of a troy ounce fell about -2% below the USD 1 900 mark after a slide of over -5% yesterday, while US Treasury yields rose. Asian stock markets, with the exception of the Japanese stock market, were weaker today. The Nikkei rose by +0.21% to 22 799.12 points. Japanese equities benefited from a slightly weaker yen, which at times reached a three-week low against the US dollar.
The designated Democratic presidential candidate Joe Biden (78) chose Senator Kamala Harris (55) as his running mate. The former California state attorney would not only be the first woman, but also the first black woman, as well as the first American with Asian roots, to hold this office. The two candidates are to be officially nominated at a party congress of the Democrats over several days next week.
Price pressure in the United States increased more than expected in July. At the producer level, prices rose by +0.6% month-on-month, the strongest increase since October 2018, as analysts had expected only half as much. The rise in prices was mainly driven by higher energy prices. On the other hand, the data for the year as a whole show that the inflation trend is moderate given the recessionary economic environment in the midst of the corona crisis. Producer prices fell by -0.4% year-on-year and rose by only +0.1% in the core rate, i.e. excluding the often volatile prices for food and energy. Producer prices provide an early indication of inflationary developments, as producer prices usually spill over to consumer prices sooner or later. An indication of this is provided by the US consumer price data due this afternoon.
In the monthly survey conducted by the Mannheim Centre for European Economic Research (ZEW), the financial market experts and institutional investors surveyed were optimistic about an expected economic recovery in Germany. The ZEW Expectations Index rose more strongly in July, by 12.2 points to 71.5 points, reaching its highest level since January 2004. Meanwhile, however, the current uncertainty remains noticeable, which is reflected in a decline of the indicator for the assessment of the current economic situation. According to the ZEW, hopes for a rapid economic recovery have increased.
Russia is the first country in the world to approve a vaccine against the coronavirus SARS-CoV-2. The vaccine, called “Sputnik V“, was developed by the Gamaleya Institute in Moscow and has only recently been tested on humans. The vaccine is effective and safe, confirmed Kremlin chief Vladimir Putin. The World Health Organization (WHO) stated that it is in close contact with the Russian health authorities about a possible “prequalification process“ for the vaccine. However, a strict review was necessary. According to the WHO, 167 Covid-19 vaccine projects are under development worldwide, 28 of which are in clinical trials in humans. Six of these projects are in the crucial third and final phase.
The pandemic and the countermeasures taken left a clear mark on Russia's economy. In the second quarter, GDP collapsed by -8.5% year-on-year, which was roughly in-line with the expectations of most economists. The Russian central bank expects economic output to decline by as much as -5.5% this year, followed by a recovery next year.
|10:30||UK||Industrial Production (June, y/y)||-20.0%|
|11:00||EZ||Industrial Production (June, y/y)||-20.9%|
|14:30||US||Consumer Prices (July, m/m)||+0.6%|
|14:30||US||Consumer Prices (July, y/y)||+0.6%|
|14:30||US||Core Consumer Prices (July, y/y)||+1.2%|
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Source: LGT Bank (Switzerland) Ltd.
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