On Wall Street, the Dow Jones Industrial closed at 31'145.30 points, -0.55% lower than Friday's close, and thus at the level of mid-July. The S&P 500 lost -0.41% lower at 3'908.19 points and on the Nasdaq, the indices exited trading around -0.7% lower. The outlook for the global economy is becoming visibly more difficult due to high inflation and the corresponding monetary policy responses of the major central banks. This will also have an increasingly negative impact on the earnings outlook of companies and thus on analysts' earnings estimates. Most of the markets in the Asia-Pacific region trended in negative territory at midweek.
Europe's stock markets are likely to start Wednesday weaker in view of the negative guidance. The focus will now be on the ECB's eagerly awaited interest rate decision on Thursday afternoon. A strong interest rate hike is expected. Meanwhile, the prospect of the announced IPO of Porsche sets positive accents on the Frankfurt stock exchange floor. CEO Oliver Blume, who has also been head of the Wolfsburg-based Volkswagen Group since September, described the planned IPO as a “historic moment and milestone” for the sports car maker. Listing is expected in late September or early October, and the IPO should then be completed by the end of the year at the latest.
In the bond market, US government bond prices came under pressure and the yield on ten-year US Treasuries climbed further in return to 3.34%, the highest level since June. The yield on 30-year Treasuries closed at its highest level since 2014. With great interest is expected tonight the regular economic report of the Federal Reserve, the so-called Beige Book.
Chinese exports rose by +7.1% year-on-year in August when calculated in US dollars but remained far below the double-digit growth forecast by economists. In July, exports had still risen by +18%. Imports also performed worse than expected, growing by only +0.3%. In July, imports had still increased by +2.3%. On the one hand, weaker global demand is putting pressure on China's exports, and, on the other hand, weaker domestic consumption is causing a lower demand for imports.
According to the latest survey results from the industry association ISM (Institutes for Supply Management), sentiment in the US service sector has brightened surprisingly. The corresponding Purchasing Managers' Index (PMI) improved by 0.2 to 56.9 points in August, while analysts had forecast a decline to 55.3 points. With a value well above 50 points, the PMI signals a continued solid growth trend in the sector. On a more positive note, the fourth consecutive decline in the price index may indicate a somewhat weaker inflation trend.
Order intake in German industry weakened further and more sharply than expected in July. Compared to the previous month, companies collected -1.1% fewer orders (analyst consensus -0.7%), as reported by the Federal Statistical Office. This is the sixth month in a row that orders have fallen. The background is said to be the uncertainties arising from the Ukraine war and high gas prices. The outlook for the second half of the year thus remains subdued, commented the Federal Ministry of Economics.
|08:00||GE||Industrial Production (July, m/m)||+0.4%|
|11:00||UK||Bank of England Governor Bailey speaks|
|11:00||EZ||GDP Q2 (q/q)||+0.5%|
|14:30||US||Trade Balance (July)||USD -79.6bn|
|20:00||US||Fed Beige Book|
|US||Apple||New Products Event|
Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi, E-Mail: email@example.com
Source: LGT Bank (Switzerland) Ltd.
Risk Disclosure (Disclaimer)
This publication is an advertising material / marketing communication. This publication is intended only for your information purposes. It is not intended as an offer, solicitation of an offer, or public advertisement or recommendation to buy or sell any investment or other specific product. The publication addresses solely the recipient and may not be multiplied or published to third parties in electronic or any other form. The content of this publication has been developed by the staff of LGT and is based on sources of information we consider to be reliable. However, we cannot provide any confirmation or guarantee as to its correctness, completeness and up-to-date nature. The circumstances and principles to which the information contained in this publication relates may change at any time. Once published information is therefore not to be interpreted in a manner implying that since its publication no changes have taken place or that the information is still up to date. The information in this publication does not constitute an aid for decision-making in relation to financial, legal, tax or other matters of consultation, nor should any investment decisions or other decisions be made solely on the basis of this information. Advice from a qualified expert is recommended. Investors should be aware of the fact that the value of investments can decrease as well as increase. Therefore, a positive performance in the past is no reliable indicator of a positive performance in the future. The risk of exchange rate and foreign currency losses due to an unfavorable exchange rate development for the investor cannot be excluded. There is a risk that investors will not receive back the full amount they originally invested. Forecasts are not a reliable indicator of future performance. In the case of simulations the figures refer to simulated past performance and that past performance is not a reliable indicator of future performance.
The commissions and costs charged on the issue and redemption of units are charged individually to the investor and are therefore not reflected in the performance shown. We disclaim, without limitation, all liability for any losses or damages of any kind, whether direct, indirect or consequential nature that may be incurred through the use of this publication. This publication is not intended for persons subject to a legislation that prohibits its distribution or makes its distribution contingent upon an approval. Persons in whose possession this publication comes, as well as potential investors, must inform themselves in their home country, country of residence or country of domicile about the legal requirements and any tax consequences, foreign currency restrictions or controls and other aspects relevant to the decision to tender, acquire, hold, exchange, redeem or otherwise act in respect of such investments, obtain appropriate advice and comply with any restrictions. In line with internal guidelines, persons responsible for compiling this publication are free to buy, hold and sell the securities referred to in this publication. For any financial instruments mentioned, we will be happy to provide you with additional documents at any time and free of charge, such as a key information document pursuant to Art. 58 et seq. of the Financial Services Act, a prospectus pursuant to Art. 35 et seq. of the Financial Services Act or an equivalent foreign product information sheet, e.g. a basic information sheet pursuant to Regulation EU 1286/2014 for packaged investment products for retail investors and insurance investment products (PRIIPS KID).