LGT Navigator

European sentiment pressured by politics - US, Asian stocks hit new highs

A recovery in euro-area investor sentiment came to an abrupt stop this month as political and economic concerns weighed on the morale of economic participants. While European equities traded mixed on Monday, the indices on Wall Street continued to hit fresh record highs. In Asia, stocks were trading mostly in positive territory with the Japan’s Nikkei 225 breaking through previous records as well.

Shane Strowmatt, LGT
Reading time
5 minutes
Europe Euro
© Shutterstock

Investor morale in the euro area dropped in July, ending an eight-month streak of improvements, according to a survey by consulting firm Sentix. The index for the euro area fell to -7.3 points, compared to 0.3 in June. The slump was attributed to concerns about recent elections in France and the US presidential election in November. The slowdown in the US economy and the stalled recovery in Germany also contributed to the negative sentiment. The Euro Stoxx 50 ended Monday’s session 0.2% lower.

German trade balance widens even as exports fall

German exports of goods decreased by 3.6% in May compared to the previous month, taking into consideration calendar and seasonal adjustments. The trade balance in May 2024 showed a surplus of 24.9 billion euros, higher than the surpluses in April 2024 and May 2023 as imports fell faster than exports, dropping 6.6% in May when compared with the previous month. Compared to May 2023, exports have declined by 1.6% and imports are down by 8.7%. Germany, Europe’s largest economy, is heavily dependent on exports of industrial goods. What appeared to be revival of Germany manufacturing at the beginning of the year looks like it is increasingly coming to a stop with industrial orders declining five months in a row and Germany’s June Manufacturing Purchasing Managers’ Index at 43.5, signalling strong contraction. Germany’s DAX gained 0.1% on Monday.

More record highs in New York

In New York, stock indices reached new highs yet again on Monday, despite gains remaining somewhat muted. Market participants are awaiting Federal Reserve Chair Jerome Powell’s semiannual monetary policy report before US Congress on Tuesday and Friday’s Consumer Price Index for clues about when the Fed could begin cutting interest rates. The S&P 500 closed up 0.1% and the Nasdaq-100 gained 0.2%, both reaching new highs. The Dow Jones Industrial lost 0.1%.

Nikkei 225 hits all-time high

In the Asia-Pacific region, sentiment on stock markets was positive. In Tokyo, the Nikkei 225 climbed more than 2% to reach new all-time highs during Tuesday’s trading session. In South Korea, the Kospi was up 0.2%. In Australia, the S&P/ASX 200 was trading 0.8% higher despite consumer sentiment in the country falling to 82.7 in July from 83.6 in June. Hong Kong's Hang Seng Index was trading roughly flat, while the mainland CSI 300 gained 0.5%.

Corporate and macroeconomic calendars

Corporate news in focus: There is no major corporate news scheduled today.

Economic data in focus: Federal Reserve Chair Jerome Powell’s semiannual monetary policy report before US Congress.

LGT helps you make informed investment decisions

Global economic and market trends at a glance

You can also follow us on Facebook or LinkedIn – or visit Insights and discover interesting background articles. If you have questions, a consultant from the bank will be happy to help you.

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

Contact us