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Consolidation continues at a high level

Consolidation continued on Wall Street and more or less on Asian stock exchanges, in some cases at a high level. In the US, consumer sentiment has recently deteriorated unexpectedly and American consumers are more sceptical about the future. In Asia, equity markets were mixed, while the Japanese yen fell to its weakest level against the US dollar in 34 years. Meanwhile, the price of gold climbed back close to its recent record high. 

Alessandro Fezzi, LGT
Reading time
5 minutes

The mood on the New York Stock Exchange was positive on Tuesday, but the gains could not be sustained and the indices ended the day slightly lower. The Dow Jones Industrial closed at 39,282.33, down just under 0.1%, but still close to the previous week's high of just under 39,900. The S&P 500 fell 0.3% to close at 5,203.58. The Nasdaq indices lost just under 0.4%. Looking at individual stocks, the first day of trading in the US stock market was dominated by the temporary rise of almost 60% in the share price of Donald Trump's social media platform, "Trump Media & Technology Group". By closing, the debutant stock was trading around 16% above its issue price.

American consumers were more pessimistic in the latest survey by The Conference Board. Although the closely watched consumer confidence barometer fell only slightly by 0.1 points to 104.7, economists had expected a significant improvement to 107.0. In addition, February's reading was revised sharply from 106.7 to 104.8.

In the US housing market, house prices continued to rise in the 20 largest metropolitan areas at the beginning of the year. According to the S&P/Case-Shiller index, prices rose by an average of 0.14% month-on-month. This may not seem like a big jump, but it represents the seventh consecutive increase and the strongest growth in just over a year. The rebound is broad-based and partly due to the downward trend in mortgage rates in recent months, analysts said.

In Asia, stock markets remained mixed in the middle of the week. In Tokyo, the Nikkei 225 was up 1.4% and the broader Topix was up just over 1%. The Japanese yen fell to its weakest level in 34 years against the US dollar. Hong Kong's Hang Seng Index fell by just under 1% and China's CSI 300 was down 0.3%. South Korea's Kospi was trading around 0.1% lower after hitting a two-year high on Tuesday. Australia's S&P/ASX 200 closed 0.5% higher, extending Tuesday's gains. Data from Australia showed that consumer price inflation rose 3.4% year-on-year in February. The Reserve Bank of Australia recently stated that it was too early to rule out further interest rate hikes.

On Tuesday, the price of gold rose sharply by around USD 28 on the day to USD 2,200 per troy ounce, close to the recent record high of USD 2,220. Gold is currently trading at just under USD 2,180, driven by the tense geopolitical situation, the prospect of interest rate easing in the US and Europe, central bank demand and the recent weakening of the US dollar.

The US financial services group S&P Global has revised its growth forecast for the eurozone economy slightly downwards for the current year. GDP growth is now expected to be 0.6% in 2024, down from 0.7% previously. The Organisation for Economic Cooperation and Development (OECD) and the International Monetary Fund (IMF) have also lowered their growth forecasts to 0.6% and 0.9% respectively. S&P Global now expects the eurozone to grow by 1.3% in 2025, down from 1.5%, and commented: "The European economy remains on track for improving activity and moderate employment growth. However, uncertainty over productivity developments and the slow implementation of the next generation of EU stimulus could mean that the recovery in growth is weaker than we expect".

Corporate news in focus: There are no major corporate results due today.

Economic data in focus: France consumer confidence, Spain consumer prices, Sweden Riksbank interest rate decision (09:30 CET), Austria industrial PMI, Eurozone economic sentiment and consumer confidence. 

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Lten steht Ihnen ein Berater der Bank gerne zur Verfügung.

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