On Wall Street, investor restraint dominated at the beginning of the week and the stock indices suffered heavy losses at the start of trading. By the close of trading, however, the indices had recovered and the Dow Jones Industrial closed just under half a percent lower. The market-wide S&P 500 exited with only a moderate daily loss of -0.14%. On the Nasdaq technology exchange, investors came back after heavy losses in the first trading week of the year, keeping tech indexes just above water on Monday. In early trading, Nasdaq indices had lost around two percent, falling to their lowest level since mid-October 2021, while the yield on ten-year US government bonds climbed to as high as 1.8%.
The economic barometer of the German financial market analysis company Sentix rose at the beginning of the year for the first time since July 2021, indicating a stabilization in Germany's economic trend. According to Sentix, the economic pause in the business cycle following the decline in economic output in 2021 and the stabilization that has now taken place has been confirmed. The so-called “mid-cycle slowdown” is likely to be replaced by a renewed economic revival, said Patrick Hussy of Sentix.
According to a recent survey of 228 companies, the UK's industrial sector continues to be weighed down by the Kingdom's exit from the European Union. Two out of three companies said Brexit had had a moderate or significant impact on their business. More than half expect Brexit to continue to hurt business this year. However, three-quarters of the companies surveyed also expressed optimism that conditions will improve.
Federal Reserve Vice Chairman Richard Clarida is stepping down shortly before the end of his regular term at the end of this month. The background is a scandal involving private stock market transactions. According to the New York Times, Clarida's stock market dealings are said to have gone even further than disclosed last year as part of the disclosure requirements. US President Joe Biden has already nominated central bank board member Lael Brainard as the new Fed vice chair at the end of November. However, the US Senate still has to approve this.
According to Munich Re's assessment, last year's losses reinforce the worrying long-term trend of increasing destruction caused by natural catastrophes. Globally, natural catastrophes caused losses of USD 280 billion. However, only about USD 120 billion was insured. According to Munich Re, 2021 ranks fourth in the list of the most expensive natural catastrophe years. The most expensive year to date was 2011, with the seaquake, tsunami, and subsequent nuclear accident in Japan.
|10:00||IT||Retail Sales (November, m/m)||+0.1%|
|11:20||EZ||ECB President Lagarde|
|16:00||US||Fed Governor Powell|
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Source: LGT Bank (Switzerland) Ltd.
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