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LGT Navigator: Vertigo?

April 21, 2021

With stock markets recently soaring to lofty heights, investors appear to be increasingly concerned about equity valuations, which reinforced profit-taking on international stock exchanges yesterday. Market participants are also taking cover in view of the upcoming round of corporate news and the ECB's upcoming interest rate decision. However, the downward pressure is likely to be limited, as the fundamental monetary and fiscal policy stance and the outlook for a further recovery of the global economy should provide support.


After the recent record chase, the New York Stock Exchange closed weaker again in the face of increased profit-taking. The Dow Jones Industrial lost -0.75% by the close of trading and exited at 33'821.30 points. The S&P 500 also fell by -0.68% to 4'134.94 points and the technology exchange Nasdaq recorded daily losses in a similar amount. Overall, the stock market sentiment seems to continue to be characterized by optimism, but it could be the one or the other investor in view of the heights reached “dizzy.” In Asia, most stock indices were also under pressure this morning. In Tokyo, the Nikkei 225 is quoted around -2% lower, and in Hong Kong the Hang Seng is down -1.7%. In Europe, several corporate earnings results will be in investors' focus. 

Price pressure in Germany continues to increase

At producer level, price levels in Germany continued to rise in March. Producer prices rose +3.7% on an annual basis, the strongest increase since November 2011. On average, economists had expected producer price inflation of +3.2%. Compared with the previous month, prices increased by +0.9%. The background was primarily higher energy prices due to increased electricity prices and the CO2 tax in force since the beginning of the year, commented the statistics office.

Germany draws a positive balance with green bonds

Germany raised EUR 11.5bn in 2020 with the issuance of so-called green bonds, according to the allocation report published yesterday. These are two bonds that were first brought to the market in September and November. The first, with a ten-year maturity of EUR 6.5bn, and a five-year bond that raised EUR 5bn. The first green federal bond with a 30-year maturity is now to be issued in May. Germany also plans to account for the impact of green bond spending on the environment and climate in the future. A report to this effect is to be published in mid-2022. The German government decided to issue green federal securities as part of its 2030 climate protection program.

G7 to meet physically again for talks

The British government plans to hold its first physical meeting in two years in early May. Accordingly, the foreign ministers of the United States, the United Kingdom, Germany, France, Italy, Canada and Japan, as well as representatives of the EU, will meet in London from May 3 to 5 to discuss the current state of the global economy with a focus on pandemic control and climate change. The foreign ministers of India, Australia, South Korea, and South Africa have also been invited.



Economic Indicators April 21

MEZ Country Indicator Last
08:00 UK Conumser Prices (March, y/y) +0.4%
08:00 UK Core Consumer Prices (March, y/y) +0.9%

Earnings Calender April 21

Country Corporate Period
SZ Roche Q1 Sales
GE Deutsche Boerse Q1
FR Carrefour Q1
FR Accor Q1
NL Heineken Q1 Sales
NL Akzo Nobel Q1
SP Iberdrola Q1
SWE Svenska Handelsbanken Q1
SWE Ericsson Q1
US Verizon Communication Q1


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Source: LGT Bank (Switzerland) Ltd.

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