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LGT Navigator: Sideways on higher ground

June 30, 2021

While the latest economic data supported investor optimism and inflation concerns have receded somewhat into the background for the time being, fears of a renewed wave of pandemic driven by the delta variant continue to cause unrest on the capital markets. Although the basic sentiment on the stock exchanges remains optimistic and the stock indices are holding at a high level, increasing uncertainty seems to be creeping in.

Sideways on higher ground

On the New York Stock Exchange, the indices held at a high level on Tuesday and even set new records in some cases. Supported by solid consumer confidence, the broad S&P 500 reached the mark of 4'300 points for the first time in early trading. At the closing bell, the index exited the day at 4'291.80 points (+0.03%). The Dow Jones Industrial closed virtually unchanged from the previous day at 34'292.29 points (+0.03%). On the Nasdaq technology exchange, the Nasdaq 100 selection index rose +0.33% to 14'572.75 points. Asian stock exchanges showed again no clear trend, overshadowed by the concern of a worldwide rapid spread of the delta variant of the coronavirus, especially also in view of the upcoming Olympic Games in Japan. In addition, manufacturing in China lost some momentum in June in the face of higher raw material costs, as shown by the official purchasing managers' index for the manufacturing sector.

Solid US consumer sentiment

The assessment of American consumers brightened in June, according to the latest survey results from the New York-based economic research institute Conference Board. The consumer confidence barometer climbed from 120.0 (revised from 117.2) to 127.3 points, while analysts on average had expected a dip to 118.7. Consumer sentiment in the United States is thus at its highest level since the first wave of the pandemic in March 2020. Although short-term inflation expectations among the households surveyed rose, this had little impact on consumer confidence or their purchasing intentions, the institute commented.

Economic sentiment in euro countries at highest level in 21 years

According to the latest survey results from the European Commission, general economic sentiment in the eurozone improved in June for the fifth month in a row. The Economic Sentiment Indicator (ESI) climbed from 114.5 points in May to 117.9 points (consensus 116.5), thus reaching its best level since the turn of the millennium. The brightening of sentiment was strongest in the service sectors hit hardest by the pandemic restrictions.

Slight easing of price pressures in Germany

In Germany, consumer prices rose at a slightly slower rate in June than a month earlier. Year-on-year inflation was measured at +2.3%, compared with +2.5% in May – the highest rate in almost ten years. The (probably) higher inflationary pressure in the short term is mainly driven by the increase in energy prices (+9.4% year-over-year).

Inflation in Spain stagnates at elevated level

In Spain, the cost of living remained at a relatively high level in June. Over the year, consumer prices rose by +2.4% and by +0.4% month-on-month. In March, the annual inflation rate was “only” +1.2%. 

Economic Indicators June 30

MEZ Country Indicator Last period
08:00 UK GDP Q1 (q/q, revision) -1.5%
08:00 GE Import Prices (May, y/y) +10.3%
08:45 FR Consumer Prices (June, y/y) +1.8%
09:00 SZ KOF Economic Indicator (June) 143.2
11:00 EZ Consumer Prices (June, y/y) +2.0%
11:00 IT Consumer Prices (June, y/y) +1.2%
14:15 US ADP Employment Private Sector (June) +978,000
15:45 US Chicago PMI (June) 75.2
16:00 US Pending Home Sales (May, m/m) -4.4%


Earnings Calender June 30

Country Company Period
US Micron Technology Q3


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Source: LGT Bank (Switzerland) Ltd.

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