At the start of the week, Europe's stock markets already showed deep red share prices and the EuroStoxx 50 lost a good four percent. The negative trend initially continued on Wall Street yesterday, with the Dow falling by more than three percent. Then, however, the indices in New York turned just into positive territory in late trading. On the one hand, bargain hunters stepped onto the trading floor and on the other hand, the announcement of direct talks between Ukraine and Russia in Paris to resolve the Ukraine conflict provided hope. In addition to the upcoming monetary policy direction decision of the Federal Reserve on Wednesday evening and the smoldering conflict between the West and Russia, the current corporate reporting season also shaped the stock market picture. After a disappointing start to the earnings season, the quarterly results of the software company Microsoft are in the spotlight today.
Asia's stock markets also faced an icy headwind. In Tokyo and Hong Kong, the indices lost a good one and a half percent today. Shares in mainland China also fell ahead of the upcoming Chinese New Year. In Shanghai, the Composite Index lost a good one percent. A surprise interest rate hike by the Central Bank of Singapore caused a stir. For the first time in seven years, the city-state's central bank tightened its monetary reins to counter rising inflationary pressures.
The Western military alliance NATO has confirmed US considerations to increase troops in alliance countries in Eastern Europe. In response to the Russian troop buildup on the borders with Ukraine, other allies such as France, Spain, the Netherlands, and Denmark will also increase their presence, NATO Secretary General Jens Stoltenberg said. The New York Times had previously reported that US President Joe Biden was considering sending up to 5000 American troops as well as warships and aircraft.
Latest survey data from London-based market research firm IHS Markit confirmed that the assessment of companies surveyed in the service and industrial sectors in the eurozone, as well as in the UK and the US, deteriorated at the beginning of the year. The composite index (PMI Composite) for the US private sector slumped to 50.8 points in January, from 57.0 points in the previous month and is thus only just above the 50-growth threshold. The Purchasing Managers' Index for manufacturing fell to its lowest level in 15 months, and the PMI for the service sector also dropped sharply from 57.6 to 50.9 and is now at its lowest level in a year and a half. According to IHS Markit, the rapid spread of the omicron variant is slowing down the service sector. Tourism, travel, and leisure are particularly affected. In industry, meanwhile, the situation has improved again somewhat. On the positive side, supply bottlenecks and cost pressures in industry have eased, explained Markit chief economist Chris Williamson.
In the eurozone, the composite purchasing managers' index also signaled a deterioration in business sentiment. The purchasing managers' index fell for the second month in a row, from 53.3 to 52.4 points (consensus 52.6), dropping to its lowest level in nearly a year.
A similar picture was seen in the UK. The British Purchasing Managers' Index for the private sector declined by 0.2 points to 53.4 in January. Here, too, it was the service sector that suffered from the pandemic-related uncertainties.
|10:00||GE||Ifo Business Climate (January)||94.7|
|15:00||US||S&P/CaseShiller House Prices 20 cities (November, y/y)||+18.4%|
|16:00||US||Consumer Confidence (January)||115.8|
|FR||Remy Cointreau||Q3 Sales|
|US||Johnson & Johnson||Q4|
Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi, +41 44 250 78 59, E-Mail: firstname.lastname@example.org
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.