Skip navigation Scroll to top
Scroll to top

LGT Navigator: Start to another challenging year

January 3, 2022

After a successful year on equity markets, investors are facing a continued challenging market environment at the start of the year. While omicron is causing record high infection figures, especially in the Western world, there is still a lack of scientific evidence regarding the dangerousness of the virus variant. However, if there are no widespread lockdowns, this should not significantly affect sentiment on capital markets. Inflation will remain a latent factor of uncertainty in the new year. The question remains as to how sustained the inflationary pressure will ultimately be.

Start to another challenging year

On Wall Street, stock indices ended the last trading day of the past year with slight losses in the absence of any impetus, with technology stocks on the Nasdaq falling most sharply. However, this did not change the fact that stock markets can look back on a successful year. The Dow Jones Industrial and the broad S&P 500 gained between +20% and +25% in 2021. In Europe, the EuroStoxx 50 also posted a moderate daily loss before New Year's Eve but can report a gain of a good +20% for the year as a whole.

The start on Asia's stock exchanges is characterized by caution and most stock indices record slight losses on the first trading day of the new year. In addition to the well-known uncertainties, the Chinese real estate group Evergrande once again attracted attention. Shares of China Evergrande were suspended from trading, in view of the publication of "important information".

Germany takes over G7 chairmanship

The German government, under new Chancellor Olaf Scholz, takes over the chairmanship of the G7 from the United Kingdom for one year on January 1. The focus will be primarily on pandemic control, climate protection as well as certainly geopolitical issues. A major summit will then be held at Schloss Elmau near Garmisch-Partenkirchen on June 26-28, 2022. The G7 countries are the United States, UK, Germany, France, Italy, Canada and Japan.

ECB driving on sight

Austria's central bank chief and ECB Governing Council member Robert Holzmann expects inflation and the pandemic to continue to be the defining uncertainty factors in 2022. The ECB, he said, must therefore "drive on sight". The greatest strength of monetary policy is its ability to act very quickly and to adapt to new circumstances in the shortest possible time. This is particularly important now and in the coming months, the central bank governor said. It will be crucial to start the gradual exit from negative interest rates and unconventional monetary policy and to avoid any proximity to monetary state financing, he said.

His ECB council colleague, Dutch central bank chief Klaas Knot, said the ECB could raise key interest rates in early 2023. The stage is set to end outstanding bond purchases by the end of the year, and then interest rates could also rise, Knot said in a newspaper interview. 

Singapore's economy grew at its fastest pace in more than a decade in 2021

The city-state's GDP expanded +7.2% last year after economic output contracted -5.4% in the first corona year of 2020. The last time the economy grew more strongly was in 2010. The government now projects GDP growth of +3-5% in 2022.

Economic Indicators January 3

MEZ Country Indicator Last period
09:15 ESP PMI Manufacturing (December) 57.1
09:30 SZ PMI Manufacturing (December) 62.5
09:45 IT PMI Manufacturing (December) 62.8
09:50 FR PMI Manufacturing (December) 54.9
09:55 GE PMI Manufacturing (December) 57.9
10:00 EZ PMI Manufacturing (December) 58.0
15:45 US PMI Manufacturing (December) 57.8

 

Earnings Calender January 5

Country Company Period
US Computer Technology Association (CES) Event in Las Vegas

 

LGT helps you make informed investment decisions

All about global economic and market trends at a glance

Subscribe to LGT's research newsletters

You can also follow us on Facebook or LinkedIn – or visit MAG/NET and discover interesting background articles. If you have questions, a consultant from the bank will be happy to help you.

Imprint
Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi, +41 44 250 78 59, E-Mail: lgt.navigator@lgt.com
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.