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Stock markets start week mixed

US stock markets were under pressure to start the week, while Asian markets were mostly up in early Tuesday trading. Markets were generally calmed by the fact that major catastrophes were avoided in Russia over the weekend, but the uncertain future of the Russian private army Wagner was still causing jitters among some market participants. In European macroeconomics, business sentiment in Germany continued to fall, according to data released Monday, while economists confirmed their growth projections for the Swiss economy.

Alessandro Fezzi, LGT
Reading time
5 minutes
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In New York, stock markets were lower while tech stocks saw continued profit-taking to start the week. The Dow Jones Industrial lost 0.04% to close at 33'714.71 points on Monday. The S&P 500 dropped 0.45%, closing at 4328.82 points. The Nasdaq-100 fell 1.36%, ending the day at 14'689.02 points. In individual stocks, Tesla stocks fell more than 6% after a downgrade by Goldman Sachs, which has concerns about the pricing environment for electric vehicles. Other tech stocks such as Alphabet, Meta and Nvidia also lost more than 3% each.

Stock markets in the Asia-Pacific region were trading mixed on Tuesday. Investors in China were considering new economic growth projections after Chinese Primier Li Qiang said China’s gross domestic product (GDP) was expected to reach its 5% growth target this year. Hong Kong's Hang Seng Index was trading 1.6% higher on Tuesday. In mainland China, the Shanghai Composite gained 0.9%. South Korea’s Kopsi was down 0.2% and Japan’s Nikkei 225 dropped 0.7% after three days of losses.

Germany’s Ifo Business Climate Index for June fell to 88.5 points from 91.5 in May, the second month of weakening. The survey results released Monday show sentiment weakening in Europe’s biggest economy, which entered a recession in late 2022. The weak Business Climate Index as well as falling business expectations and current business conditions suggest the recession could continue longer than previously expected.

In Switzerland, economists on Monday confirmed previous projections for GDP growth. The economic institute KOF confirmed GDP forecasts for 2023 at 0.8% growth and for 2024 at 1.6% growth among the economists it surveyed. However, the economic experts surveyed by KOF did slightly change their views on inflation. For 2023, the economists now expect an inflation rate of 2.3%. Their last consensus for 2023 inflation in Switzerland was 2.4%, from a March survey. Last week, the Swiss National Bank (SNB) raised interest rates by another quarter of a percentage point in an effort to fight inflation.

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

Economic data in focus: ECB President Christine Lagarde speaks at an ECB forum in Sintra (10:00 CET), US building permits (14:00), US new home sales (16:00), Conference Board US Consumer Confidence Index (16:00).

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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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