The Dow Jones Industrial closed on Monday just under +2% higher at 31'880.24 points, making up for most of the losses in the previous week. The S&P 500 gained +1.86% to 3'973.75 points and on the Nasdaq technology exchange, the indices posted a daily gain of about +1.7%. Reason for optimism was provided by the news that the US against the backdrop of high inflation, rising interest rates and a looming recession is seeking a de-escalation of the trade war with China. Accordingly, the US government wants to remove some punitive tariffs on imports from China introduced under President Donald Trump.
JPMorgan Chase was optimistic and holds out the prospect of strong interest income in view of rising interest rates. The stock rose by a good +6%. Subsequently, other financial stocks could also benefit. Thus, the shares of Citigroup or Goldman Sachs also recorded gains of around +6%, respectively, a good +3%. In the tech sector, takeover speculation around Broadcom attracted attention. According to Bloomberg, the US chip company is said to be interested in buying VMware, a software provider for cloud computing and virtualization of data centers.
If most stock markets had already trended friendly at the start of the week, most of the Asian indices fell broadly today. In Tokyo, the 225 comprehensive Nikkei index trades around -0.8% lower than on Monday and in Hong Kong, the Hang Seng loses around -1.6%. In Shanghai, the Composite Index trades about -1.2% lower than at the start of the week.
Tonight, Federal Reserve Governor Jerome Powell will take center stage. Meanwhile, in the bond market, the yield of ten-year US government bonds climbed again to 2.87%.
According to recent statements by European Central Bank President Christine Lagarde, the European Central Bank (ECB) is heading for a first interest rate hike. The end of net securities purchases “very early in the third quarter” will allow for a first rate hike in July, Lagarde said. With inflation in the euro area recently rising to a record high of +7.4%, pressure has increased on the ECB to start turning rates around, following the lead of the US and British central banks. However, the pace and extent of monetary policy adjustments could not be determined in advance, the ECB chief commented.
The euro gained on Lagard's statements and climbed to 1.0670 against the US dollar.
According to the latest survey results of the Munich-based economic research institute Ifo, the mood among the approximately 9,000 companies surveyed improved once again in May. The highly regarded Ifo business climate barometer climbed from 91.9 points in April to 93.0 points. The consensus of analysts had predicted a deterioration to 91.4 points. According to Ifo President Clemens Fuest, there are currently no signs of a recession in the German economy. In the outlook for the next six months, however, the mood had hardly changed, and most companies remained skeptical.
On his visit to Tokyo, US President Joe Biden announced a new initiative for economic cooperation in the Indo-Pacific region. With the “Indo-Pacific Economic Framework” (IPEF), the United States, together with Japan, Australia, Brunei, India, Indonesia, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and Vietnam, want to try to ensure sustainable growth, peace and prosperity and, above all, to create a counter pole to China's increasing influence in the region. However, no free trade agreement or reduction of tariffs is envisaged. US President Biden is thus also trying to correct the policy of his predecessor Donald Trump. Trump had withdrawn from the Trans-Pacific Partnership (TPP) free trade agreement during his term in office, and China is making efforts to join this agreement.
|08:45||FR||Economic Survey (May)||108.0|
|09:15||FR||PMI Composite (May)||57.6|
|09:30||GE||PMI Composite (May)||54.3|
|10:00||EZ||PMI Composite (May)||55.8|
|10:30||UK||PMI Composite (May)||58.2|
|14:30||US||Chicago Fed National Activity Index (April)||0.44|
|15:45||US||PMI Composite (May)||56.0|
|16:00||US||New Home Sales (April, m/m)||-8.6%|
|18:20||US||Fed Governor Powell speaks|
|20:00||EZ||ECB President Lagarde speaks|
|GE||Siemens Energy||Capital Markets 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.
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.