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LGT Navigator: Lack of impetus and pandemic worries keep stock markets in check

July 6, 2021

Without Wall Street, which stayed away from the action due to the holiday, there was a lack of fresh impetus at the start of the week. Investors did not dare to come out of hiding despite strong economic data and so Europe's stock markets trended sideways on Monday. In Asia, the trend remains mixed and, shortly before the start of the Olympic Games in Tokyo, concerns about a further spread of the coronavirus delta variant also dominate.

Lack of impetus and pandemic worries keep stock markets in check

While in the US at the beginning of the week, the capital markets remained closed due to the national holiday the previous day, the European equity benchmark EuroStoxx 50 remained almost unchanged from last Friday's closing price. Closing level: 4,087.37 points (+0.07%). In Paris, the CAC 40 closed +0.22% higher at 6,567.54 points and in London, the FTSE 100 exited Monday's trading with a daily gain of +0.58% at 7,164.91 points, driven by rising commodity stocks. In Asia, no consistent trend was discernible on Tuesday. The focus remains mainly on the pandemic development and central bank policy. In Australia, the central bank announced that it will probably keep key interest rates at a record low level (+0.1%) until 2024 and continue its bond purchases, but to a lesser extent, which means the beginning of a gentle tapering.

Euro Purchasing Managers' Index climbs to 15-year high

IHS Markit's Purchasing Managers' Index (PMI) for the eurozone, which is aggregated for the private sector, rose to 59.5 in June (first reading 59.2) from 57.1 points in the previous month, its highest level in 15 years, according to revised data. According to IHS Markit Chief Economist Chris Williamson, the economic recovery in Europe moved up a gear in June, but inflationary pressures also increased. Service providers, for example, raised their prices by the most in more than 20 years.

Sentix sentiment barometer climbs to highest level since February 2018

According to the latest survey results from Sentix, a German financial market analysis company, the investors and institutional investors surveyed are once again more confident about the economic outlook for the eurozone. The economic indicator increased by 1.7 points to 29.8 points and is thus at its highest level in almost three and a half years. The recovery of the euro economy is continuing, and the German economy is in a “boom-like condition,” Sentix commented.

EU survey: Climate change is biggest global challenge

According to a survey commissioned by the EU Commission, a majority of EU citizens surveyed currently rate climate change as the biggest global problem, ahead of poverty, infectious diseases and the economic situation. Nine out of ten respondents consider climate change to be a serious problem, with nearly eight out of ten describing the climate crisis as very serious. Nearly nine out of ten Europeans therefore felt it was important for the EU to set ambitious targets to increase the use of renewable energy and support improvements in energy efficiency. The survey was published in the run-up to the EU's comprehensive “Fit for 55” package of measures.

Economic Indicators July 6

MEZ Country Indicator Last period
08:00 GE Industrial Orders (May, m/m) -0.2%
11:00 GE ZEW Investors' Economic Outlook (July) 79.8
11:00 EZ ZEW Investors' Economic Outlook (July) 81.3
11:00 EZ Retail Sales (May, y/y) +23.9%
16:00 US ISM PMI Non-Manufacturing (June) 64.0


Earnings Calender July 6

Country Company Period
UK Sainsbury Q2 Sales


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Source: LGT Bank (Switzerland) Ltd.

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