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Interest rates continue to set the tone on stock exchanges

Stock markets initially started the new week with gains, recovering somewhat from the losses of the previous week. On Wall Street, however, the indices had to give back most of their initial gains, and in Asia, stock markets trended only slightly higher today. In the US, the benchmark yield on ten-year government bonds moved away from the 4%-mark, while in the German bond market the yield on ten-year Bunds climbed to its highest level since 2011. In shorter maturities, German paper yielded more than 3%, the highest since 2008.

Alessandro Fezzi, LGT
Reading time
5 minutes
Two dices that represent the fight between bonds and stocks

The Dow Jones Industrial closed 0.22% higher at 32’889.09 points and the broad-based S&P 500 added 0.31% to 3’982.24 points on Monday. On the Nasdaq 100, the indices rose by around 0.75% at the beginning of the week. Slightly lower yields on the US bond market provided minimal tailwind. The yield on the ten-year US government bond currently stands at 3.93%, close to its recent high. The latest data on new orders in US industry showed that orders for capital goods, excluding the military and aerospace sectors, rose by 0.8% in January compared to the previous month. This is seen as a positive indication of companies' propensity to invest.

Markets in the Asia-Pacific region were mostly moderately higher on Tuesday. The Nikkei 225 in Tokyo was virtually unchanged. Hong Kong's Hang Seng Index slipped 0.4% and the Hang Seng Tech Index fell about 1.5%. Hong Kong Chief Executive John Lee had announced he would lift the mask mandate from March 1st. In mainland China, the Shenzhen Component rose marginally, while the Shanghai Composite fell 0.2%.

In focus today: Adecco, SIG Group and Bayer with their annual earnings. Looking at economic data, we expect: the KOF economic barometer from Switzerland (09:00 CET) and the results of the consumer confidence survey from the US (16:00 CET).

Economic sentiment in the euro area slightly dampened

The European Commission's monthly Economic Sentiment Indicator (ESI) fell by one basis point to 99.7 points in February, marking the first decline in three months. Economists had expected a further improvement to 101.0 points. According to the survey results, sentiment deteriorated in both, the service and manufacturing sectors. Consumers and companies in the retail sector were more confident.

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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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