On Wall Street, the indices trended more or less sideways in midweek, with new highs again being recorded in some cases at the start of trading. The Dow Jones Industrial closed with a daily gain of +0.2% at 31'437.80 points, while the market-wide S&P 500 declined by -0.03% to 3'909.88 points and the technology stock index Nasdaq 100 by -0.23% to 13'655.27 points. On the corporate side, the quarterly figures of Coca-Cola, among others, made headlines in the pre-market after the beverage company exceeded analysts' expectations with its earnings per share. Meanwhile, Federal Reserve Chairman Jerome Powell maintained in a speech to the Economic Club of New York that the labor market is still far from a full recovery. Powell stressed that it will take more than supportive monetary policy to achieve and sustain maximum employment.
In Asia, stock trading was quiet on Thursday due to holidays in Japan, Korea and China. For European stock markets, futures signal a friendly start. In addition to some corporate results, the latest economic forecasts of the EU Commission (11:00 CET), among other things, are in focus today. In November, the EU Commission had forecasted that the euro economy would grow +4.2% in 2021.
While analysts had expected a rise in US consumer price inflation on a year-over-year basis, the inflation rate in January remained unchanged at +1.4% from the previous month. On a monthly basis, consumer prices rose by +0.3%. Excluding energy and food prices, which are often susceptible to fluctuations, the inflation rate actually declined to +1.4% in January from +1.6% in December. On the other hand, the billion-euro stimulus package expected on financial markets from the new administration under President Joe Biden is causing inflation expectations to rise. So far, however, the Fed has not (yet) shown any concern in this regard.
In Germany, consumer prices rose more strongly than expected in January. Compared with the same period a year earlier, the inflation rate increased +1.0%, or +1.6% on an EU harmonized basis. In December, consumer prices had fallen by -0.3% year-on-year. The Federal Statistical Office explained that the reduction in value added tax for a limited period of six months in mid-2020 had had a price-driving effect.
The Munich-based economic research institute Ifo believes that the renewed restrictions on public life to contain the corona pandemic will provide another damper on the German economy. According to the Ifo Institute's calculations, the closure of consumer-related service sectors could push German gross domestic product down by almost another percentage point in the first quarter of 2021. However, as the industrial and construction sectors continue to perform well, gross domestic product is likely to stagnate rather than decline at the start of the year, Ifo commented.
|11:00||EZ||EU Comission Economic Forecastst|
|14:30||US||Initial Jobless Claims (weekly)||+779,000|
|20:00||US||Fed Semi-annual Monetary Policy Report to the Senate|
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Source: LGT Bank (Switzerland) Ltd.
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