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Central banks and big tech set the tone this week

During the week, the Federal Reserve and the European Central Bank will decide on future monetary policy. In addition, several US tech giants are due to present their quarterly results. The earnings season is also gathering pace in Europe.

Tina Haldner
Reading time
5 minutes
© shutterstock

Asian markets are mixed at the start of the new week. In Japan, the Nikkei is up 1.2%. The Japanese Purchasing Managers' Index points to an expansion in business activity for the seventh month in a row. The Shanghai Composite is slightly higher, while Hong Kong's Hang Seng Index is down 1.4%. 

US stock markets ended the week with mixed results on Friday. The Dow Jones lost momentum after a multi-day rally and closed almost unchanged from the previous day (+0.01%, 35’227.69 points). Thanks to the razor-thin gain, the winning streak nevertheless extends to ten days, the longest since August 2017. The S&P 500 also barely moved (+0.03%, 4536.34 points). The Nasdaq Composite followed up on the previous day's losses, slipping 0.2% to 14’032.81 points. On a weekly basis, the Dow Jones gained 2.1%, the S&P 500 climbed 0.7%, while the Nasdaq Composite lost 0.6%.

Spanish voters elected a new parliament over the weekend. The conservative opposition People's party (PP) won the most seats. However, it fell short of an outright majority and, even in alliance with the right-wing populist party Vox, did not achieve a governing majority. The country could therefore face fresh elections.

Today, the news flow remains slow. However, the week promises to be exciting. US tech giants Alphabet, Microsoft (Tuesday) and Meta Platforms (Wednesday) will be reporting their quarterly earnings in the coming days. The results follow a disappointing week on the US technology exchange, after shares of Netflix and Tesla suffered heavy losses.

In addition, the European reporting season is gathering pace. Particular attention will be paid to Swiss banking giant UBS, which on Tuesday will report on its performance for the first time since the takeover of rival Credit Suisse.

Before taking their summer break, central banks will also be back in the spotlight this week. On Wednesday, the Federal Reserve (Fed) will announce its monetary policy stance. Financial markets are expecting another rate hike of 25 basis points. On Thursday, the European Central Bank (ECB) will follow suit and is also expected to raise rates by 25 basis points. 

Corporate news in focus:  Julius Bär and SGS with Q2 earnings.

Economic data in focus: Purchasing Managers' Indices for the Eurozone (10:00 CET) as well as individual euro member countries, Purchasing Managers' Index UK (10:30 CET), Purchasing Managers' Index US (3:45 CET).

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.

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