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US stocks stabilise, Asia under pressure

After large swings in recent days - particularly for tech stocks - US equities stabilised on Wednesday as traders were waiting for Friday’s inflation data before making bigger moves. In Asia, the most recent weakness of the yen as well as a fall in industrial profits out of China were concerning markets on Thursday.

Shane Strowmatt, LGT
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5 minutes
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In New York, investors were cautious midweek with the major indices only making mild moves. Traders were positioning themselves ahead of Friday’s Personal Consumption Expenditures (PCE), the Federal Reserve’s preferred measure of inflation. Thursday night’s debate between US President Joe Biden and former president Donald Trump could also potentially provide some impulse for markets, particularly any comments related to economics and public finance. The Dow Jones Industrial closed Wednesday marginally higher, while the S&P 500 and Nasdaq-100 each gained 0.2%.

Japan issues warning about weak yen

In the Asia-Pacific region, stock markets were struggling to keep up with Wall Street’s modest gains. Japanese Finance Minister Shunichi Suzuki warned publicly that the government is prepared to take actions to prevent rapid fluctuations in the yen’s exchange rate. Following the comments, the yen - which has fallen about 12% versus the US dollar this year - was trading at 160.42 per US dollar, not far from the multi-decade low of 160.88 from this week. The Nikkei 225 was trading down about 1% on Thursday.

Elsewhere in the region, China’s industrial profits grew 3.4% in the first five months of the year, when compared to the same period a year earlier. That’s clearly lower than the 4.3% reached in the just the first four months of 2024. Hong Kong's Hang Seng Index was trading about 2% lower, while the CSI 300 lost 0.5%. In South Korea, the Kospi lost 0.3% and Australia’s S&P/ASX 200 was down 0.7%.

German consumer climate ends recovery

Germany’s GfK Consumer Climate fell slightly in June to -21.8 from May’s revised -21 points. The slip follows four months of improvement. Weaker income expectations as well as a stronger propensity to save were responsible for the deterioration in the overall index level. In May, inflation sped up in Europe’s largest economy for a second month in a row to 2.8% on the year. Rapid price increases generally cause uncertainty among some consumers.

Martin Schlegel named next SNB chairman

The Federal Council of Switzerland selected Martin Schlegel to become the next chairman of the governing board of the Swiss National Bank (SNB) when Thomas Jordan steps down at the end of September. Schlegel, who has been at the SNB since 2003 and vice president of the governing board since 2018, is generally considered to be a sign of continuity for Swiss monetary policy. Jordan is stepping down after heading the central bank since 2012. Schlegel was considered the primary candidate for the post and the Swiss franc remained stable versus the dollar following the announcement.

Corporate and macroeconomic calendars

Corporate news in focus: Quarterly figures from Nike.

Economic data in focus: Swedish central bank interest rate decision, euro-area business and consumer confidence, Turkish central bank interest rate decision, US gross domestic product, US weekly initial jobless claims, US durable goods orders, US existing home sales.

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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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