Faced with a gloomier economic outlook, the Dow Jones Industrial didn't move yesterday and closed -0.1% lower at 35'258.61 points. The broad S&P 500 fared better, gaining +0.34% to 4'486.46 points. However, at the beginning of the week, technology stocks were in demand. As a result, the indices on the Nasdaq recorded gains of about one percent. In the current reporting season, so far 41 corporations included in the S&P 500 have presented their quarterly results. Of these, 80% have exceeded earnings per share expectations, according to data service provider FactSet.
In Asia, most equity indices trended slightly higher today, driven by a recovery in Chinese stock markets and positive guidance from tech stocks in the US. MSCI's broadest index of Asia-Pacific shares outside Japan was up nearly one percent, gaining about 5% from a 12-month low on October 5. In Tokyo, the 225-stock Nikkei index is trading about half a percent higher.
Gas prices in Europe and the UK have risen sharply again. At an auction on Monday, traders had hoped Gazprom would expand pipeline capacity after the Russian government gave corresponding signals. However, these hopes were dashed and the gas price for continental Europe increased by +17.7% to EUR 104.00 per megawatt hour (reference contract for delivery in November). The price for the corresponding British reference contract climbed more than +15% to GBP 2.71 per therm. Continental Europe purchases more than a third of its gas supplies from Gazprom. However, following last year's long winter, inventory in Russia and the EU have shrunk. In addition, there are accusations that Russia is politically exploiting Europe's dependence to force the approval of the new “Nord Stream 2” pipeline.
American industrial companies surprisingly cut production in September. Compared to the previous month, the manufacturing sector has produced -1.3% less, as the Fed announced on Monday in Washington. Analysts had expected an increase of +0.1%. Supply bottlenecks are once again responsible for the decline and slowed the production of car engines.
The European Central Bank (ECB) reiterated on Monday that it considers the sharp rise in inflation to be temporary. There are “certainly price pressures,” Italian Council member Ignazio Visco told Bloomberg TV. However, he said that there are currently no relevant second-round effects, such as a spillover from higher wages to price developments. Visco argued that the central bank should continue to act flexibly in its monetary policy. Last week, French Council member Francois Villeroy de Galhau had already come out in favor of maintaining parts of the PEPP pandemic emergency purchase program in the future. The statements of the ECB indicate that no quick end to the ultra-expansive monetary policy is to be expected. By contrast, the central banks in the US and UK have signaled that they will initiate a change in monetary policy before the end of 2021.
|14:30||US||Building Permits (September, m/m)||+5.6%|
|14:30||US||Housing Starts (September, m/m)||+3.9%|
|USA||Johnson & Johnson||Q3|
|USA||Procter & Gamble||Q3|
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Source: LGT Bank (Switzerland) Ltd.
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