The Dow Jones Industrial lost -1.4% at the beginning of the week and went out at 33,947.10 points. The broad S&P 500 slipped -1.79% to 3,998.84 points. On the technology exchange Nasdaq 100 indices fell by about -1.75%. The surprisingly strong ISM Purchasing Managers Index for the US services sector and better-than-forecast sentiment indicators from the eurozone increased interest rate fears on the stock market floor. With speculation about the extent of further interest rate hikes in the US, the yield on ten-year Treasury bonds rose from 3.5% to 3.6%. The US dollar benefited and pushed the euro back below the 1.05 mark.
On the Asian stock exchanges, the stock indices trended inconsistently on Tuesday. In Hong Kong, the Hang Seng Index fell by just under -1% and the much-watched Hang Seng Tech Index fell by around -1.9%. In Shanghai, however, the Composite Index remained virtually unchanged and in Shenzhen, the Component Index increased by about +0.6%. In Tokyo, the Nikkei 225 traded slightly higher on Tuesday, about +0.25%.
The ISM Purchasing Managers' Index for the US service sector came in much stronger than expected in November at 56.5 points. In October, the indicator still registered its lowest value since May 2020 at 54.4 points. Analysts had forecast a further decline to 53.5 points.
As the year draws to a close, the outlook for the eurozone has brightened for the second consecutive month, according to the latest survey results from Sentix, a German financial market analysis firm. The economic barometer climbed by almost ten points in December to minus 21.0 points, its best value since June. Investors are betting on an economic turnaround, commented Sentix.
In November, purchasing managers regularly surveyed by S&P Global were more optimistic for the first time in around six months. The purchasing managers' index for the private sector improved to 47.8 points but remains below the growth threshold of 50 points. In October, the PMI (composite) had reached its lowest level in almost two years at 47.2 points.
The Purchasing Managers' Index for the UK private sector also stopped falling in November, remaining unchanged from the previous month at 48.2 points and still below the 50-growth contraction line and at its lowest level in nearly two years, according to S&P Global. S&P Global Chief Economist Chris Williamson commented that while the new government under Prime Minister Rishi Sunak has led to an easing, the overall economic picture remains unchanged, and the risk of recession is increasing.
According to the economic umbrella organization Economiesuisse, the economic outlook for Switzerland will continue to deteriorate in the coming year. However, a recession is not to be feared. According to the forecast, Switzerland's gross domestic product is likely to grow by +0.6% in 2023, supported primarily by private consumption and investment in equipment. Negative factors are high energy prices and price increases for intermediate inputs, as well as the shortage of skilled labor and persistent supply bottlenecks.
|08:00||GE||Industrial Orders (October, m/m)||-4.0%|
|14:30||US||Trade Balance (October)||USD -7.33bn|
|SZ||Glencore (Investor Day)|
Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi, E-Mail: firstname.lastname@example.org
Source: LGT Bank (Switzerland) Ltd.
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