While caution prevailed on Europe's stock exchanges yesterday – the EuroStoxx 50 closed -0.46% lower at 3'547.85 points – stock prices on Wall Street rose again by the close of trading, supported by strong survey data in the US industrial sector. The Dow Jones Industrial closed with a daily gain of +0.55% at 30'391.60 points and the market-wide S&P 500 even gained +0.71% to 3'726.86 points. Once again, the Asian stock exchanges showed no consistent trend. Uncertainty was caused by the news that the New York Stock Exchange (NYSE) could again change its mind and take three large Chinese telecom companies off the stock exchange. US President Donald Trump had also signed a ban on US transactions with eight Chinese digital payment platforms. Meanwhile, oil prices climbed above USD 50 a barrel after Saudi Arabia's surprise production cut.
The runoff election in the US state of Georgia, which is extremely important for the upcoming presidency of Joe Biden, appears to be so close that no definitive result is yet available. The election will determine which of the two parties will hold power in the US Senate in the future. If the Republicans are able to defend their majority, it will be difficult for the future Biden administration to really set new accents. Should the two Democratic Senate candidates succeed in winning the election in Georgia, Biden would have full power in Washington and accordingly great room for maneuver. In this case, many investors expect higher fiscal stimulus to stimulate the economy, but also higher taxes and more regulation. But if Republicans manage to win at least one of Georgia's two seats, they could block any initiative or Biden's cabinet nomination.
The results of the November US presidential election are expected to be certified today in Congress in Washington. Normally, this process would be a formality, however, with the election results still being contested by the incumbent President Trump, a disruptive action by loyal Republicans is expected. This will not be able to influence the final result of the elections (306 to 232 electoral votes for Biden), but it will drag out the procedure and further shake the democratic pillars of the United States.
The ISM Purchasing Managers' Index for the US industrial sector rose to 60.7 points in December, from 57.5 points in the previous month. This means that the leading indicator, which is highly regarded because of its high correlation with growth in the overall economy, is now at its highest level in almost two and a half years. Analysts, on the other hand, had forecast a decline to 56.8 points. At the peak of the corona-induced slump in spring 2020, the ISM industrial PMI slumped to 41.5 points and subsequently recovered gradually. It is clear that industry – not only in the US but also in the rest of the world – is suffering significantly less from the constraints of public life than the service sector.
The Washington-based World Bank expects the global economy to continue to recover from the corona recession this year. However, the recovery remains fragile and depends on how consistently the pandemic is combated, including with the help of widespread vaccination, and how investment-promoting reforms are implemented. Global GDP growth of +4% is forecast.
|08:45||FR||Consumer Prices (December, y/y)||+0.2%|
|08:45||FR||Consumer Sentiment (December)||+90.0|
|09:45||IT||IHS Markit Composite PMI (December)||42.7|
|09:50||FR||IHS Markit Composite PMI (December)||49.6|
|09:55||GE||IHS Markit Composite PMI (December)||52.5|
|10:00||EZ||IHS Markit Composite PMI (December)||49.8|
|10:30||UK||IHS Markit Composite PMI (December)||50.7|
|14:00||GE||Consumer Prices (December, y/y)||-0.7%|
|14:15||US||ADP Private Employment||+307,000|
|15:45||US||IHS Markit Composite PMI (December)||55.7|
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Source: LGT Bank (Switzerland) Ltd.
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