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LGT Navigator: Positive start to the week thanks to strong guidance from Tokyo

February 15, 2021

At the start of the week, the Nikkei index on the Tokyo Stock Exchange exceeded the 30'000 points mark for the first time in more than 30 years after the latest data confirmed that the recovery of the Japanese economy continued in the final quarter of 2020. While stock exchanges in the United States remain completely closed due to a holiday (George Washington Day), the European stock markets start the new trading week with a positive underlying sentiment.

Positive start to the week thanks to strong guidance from Tokyo

At the end of last week, the stock market indices in New York held close to the previously reached record highs. The Dow Jones closed little changed at 31'458.40 points (+0.09%) and the S&P 500 as well as the technology-heavy Nasdaq 100 gained +0.47% to 3'934.83 points, respectively +0.53% to 13'807.70 points. Still in focus is the hope for progress on the long-anticipated further corona stimulus package. It was also positively noted that the new US government has signed a contract for 100 million additional corona vaccine doses each with the manufacturers Moderna and Pfizer/BioNTech to promote the vaccination campaign.

For Europe's stock exchanges, futures markets signaled a positive start to the week on Rosenmontag, which was clouded by the corona crisis, after the leading European index EuroStoxx 50 had already closed with a solid daily gain of +0.65% at 3'695.61 points on Friday. Today, the finance ministers of the 19 euro countries, the so-called Eurogroup, meet (from 15:00) and discuss the current economic development and the economic impact of the pandemic. The finance ministers also want to discuss how the euro can be further strengthened as a global currency in competition with the US dollar.

Japan's economy continues recovery – Nikkei above 30'000 points

The Japanese economy continued its recovery trend in the final quarter of 2020. According to preliminary data, GDP in the world's third-largest economy grew by +12.7% on an annualized basis, slightly more than analysts had expected. In the previous quarter, Japan's GDP had risen by a revised +22.7% on an annualized basis. It was the first time in three quarters that the country's economy grew again after Japan slipped into a severe recession in the wake of the corona crisis. However, for the full year 2020 the economy contracted by -4.8% – the first decline since 2009. On the Tokyo Stock Exchange, the data was received positively and the Nikkei index rose sharply by +1.91% and exceeded the important mark of 30'000 points. The index was boosted by the positive guidance from Wall Street and the news that Japan has granted approval to the corona vaccine of the US company Pfizer and BioNTech. Less than six months before the start of the Olympic Games in Tokyo, the vaccination campaign in Japan is now to begin immediately.

Draghi to lead Italy out of corona crisis with expert government

Former head of the European Central Bank Mario Draghi (73) is to lead Italy out of the corona crisis with a new government team. The new non-partisan head of government and his cross-party unity cabinet have started work in Rome. The main focus is on coping with the pandemic. To this end, the new government must submit plans to the EU in Brussels for the use of the EU corona aid.

Americans look to the near future with concern

Consumer sentiment in the US deteriorated unexpectedly in February. The consumer confidence barometer surveyed by the University of Michigan fell by -2.8 to 76.2 points compared with the previous month - the lowest value since August 2020. Analysts had expected an increase to 80.9 points. The expectations of private households in particular deteriorated significantly. Consumers now also increasingly expect inflation to rise. The indicator from the University of Michigan is based on a telephone survey of around 500 households. The respondents are asked about their assessment of the financial and economic situation and their expectations.

Biden sets first cornerstones of his environmental policy

Newly elected US President Joe Biden announced late last week that the Department of Energy would provide USD 100 million in funding to support low-carbon energy technologies. Overseeing the effort is the newly formed National Climate Task Force, which was created by Biden to combat climate change. He said the administration believes an aggressive shift to a clean energy economy can revitalize the US economy and create jobs. “We are positioning America to create good-paying, unionized jobs in an equitable way in communities across the country that will be at the forefront of new clean energy manufacturing and new technologies, tools and infrastructure that will help us adapt to a changing climate,“ the White House commented.

Corona crisis sends UK economic performance plummeting in 2020

The British economy shrank dramatically last year as a result of the Covid-19 pandemic. According to the ONS statistics office in London, gross domestic product fell by -9.9% compared with the previous year. In particular, both household spending and business investment fell sharply in the corona year. Compared with the German economy, British GDP thus slumped twice as much. However, according to initial estimates, there are at least signs of a slight recovery in the UK in the final quarter of 2020.


Economic Indicators February 15

MEZ Country Indicator Last
00:00 US, CAN, CN, HK Holiday
10:00 EZ Industrial Production (December, y/y) -0.6%
10:00 EZ Trade Balance (December)  +EUR 25.8bn

Earnings Calendar February 15

Country Corporate Period
UK BHP Group Q4


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Source: LGT Bank (Switzerland) Ltd.

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