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LGT Navigator: Sideways at a high level

February 12, 2021

Due to a lack of new impetus and the holidays in Asia, the stock markets are currently trending more or less sideways, but at a high and demanding level. After the recent series of records, a consolidation could form the basis for further gains. In Washington, meanwhile, the second impeachment trial against former President Trump is in the media spotlight.

Sideways at a high level

In New York, the stock indices were able to hold their ground not far from the recent record highs, supported by good demand for technology stocks. The Dow Jones Industrial initially even climbed again to a new high of 31'543 points, but then crumbled again and closed virtually unchanged from the previous day at 31'430.70 points (-0.02%). The S&P 500 exited the day's trading with a moderate gain of +0.17% at 3'916.38 points, while the technology index Nasdaq 100 gained +0.58% to 13'734.35 points.

Futures suggest an opening at the previous day's level for Europe's stock markets after the EuroStoxx 50 posted a solid daily gain of +0.64% to 3671.68 points yesterday. This afternoon, investors are hoping for fresh impetus from the University of Michigan's survey results on consumer sentiment in the US.

EU Commission slightly more optimistic on bottom line for euro economy

In view of the renewed lockdowns as a result of the second wave of the pandemic in Europe, the EU Commission in Brussels now expects slightly lower economic growth in the eurozone in the current year. Accordingly, economic output in the euro area is expected to increase by +3.8% in 2021. In the previous forecast in November last year, GDP growth of +4.1% was still assumed. Next year, however, growth is also expected to be stronger at +3.8% than previously anticipated at +3.0%. All in all, the Commission is confident that the pre-crisis level will be reached more quickly than assumed in November. The slightly more optimistic stance is based primarily on the start of the Covid-19 vaccination campaigns, the multi-billion euro corona recovery fund and the conclusion of the Brexit trade pact with the UK.

AstraZeneca to double Corona vaccine production

British pharmaceutical company AstraZeneca is working to eliminate production problems and aims to double monthly output of its vaccine to 200 million doses by April. At the same time, it said it is also working to improve the vaccine to increase its effectiveness against viral mutations as well.

No real easing in the US labor market in sight

The number of initial claims for unemployment insurance in the United States decreased in the week ended February 6, but the previous week's reading was revised up significantly. Compared with the previous week, the number of claims fell by 19'000 to 793'000, the Labor Department reported. Analysts had forecast a sharper decline to 760'000. For the previous week, the figure was revised to 812'000 from the original 779'000. The four-week moving average decreased by 33'500 from the previous week to 823'000, leaving 4.55 million Americans receiving unemployment benefits in the week ended January 30 –145'000 less than the week before.

Exploratory talks on a potential new center-right party in the US

Discussions are apparently underway within the ranks of the Republican Party about a possible split to break away from “Trumpism.“ A potential new center-right party would pursue “principled conservatism“ while adhering to the Constitution and the rule of law. The talks underscore the wide intra-party divide in the wake of Trump's tenure and, more importantly, the storming of the US Capitol on January 6. In an initial digital conference, more than 120 Republicans, including former elected politicians and officials under Presidents Trump, George H.W. Bush, George W. Bush and Ronald Reagan, as well as former Republican ambassadors and strategists, are expected to attend, according to Reuters.

Second impeachment trial – Trump's defense attorneys have their say

After the arguments of the prosecutors, the defense lawyers of former President Donald Trump will present their views today. The trial could end as early as this weekend or early next week. A new acquittal of Trump seems highly likely in view of the majority in the Senate. A two-thirds majority in the Senate, which is necessary for a conviction, is not foreseeable. Nevertheless, the prosecutors had yesterday insistently demanded a conviction of the former US President. Trump had incited his supporters to violently storm the US Capitol on January 6 and this should not go unpunished.


Economic Indicators February 12

MEZ Country Indicator Last
00:00 CN, HK, SING, SK Holiday
08:00 UK GDP Q4 (q/q) +16.0%
08:00 UK Industrial Production (December, y/y) -4.7%
08:30 SZ Consumer Prices (January, y/y) -0.8%
09:00 SP Consumer Prices (January, y/y) +0.6%
10:00 EZ Industrial Production (December, y/y) -0.6%
10:30 RUS Monetary Policy Announcement 4.25%
16:00 US Consumer Sentiment University of Michigan (February) 79.0

Earnings Calendar February 15

Country Corporate Period
UK BHP Group Q4


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US employment growth remains dynamic at the beginning of the year