Skip navigation Scroll to top
Scroll to top

LGT Navigator: Political wrangling in Washington becomes a burden

September 30, 2021

Prices on equity markets recovered midweek after rising interest rates had caused caution. Consumer goods and utilities shares were in particular demand. The focus is now increasingly on the threat of a shutdown in the United States if Democrats and Republicans fail to reach a last-minute agreement on transitional funding. In addition, a vote is expected today in the House of Representatives on the hard fought infrastructure package introduced by US President Joe Biden.

Political wrangling in Washington becomes a burden

In New York, the Dow Jones Industrial closed +0.26% higher at 34'390.72 points, after the leading index had slumped by about -1.6% on Tuesday. The S&P 500 gained +0.15% to 4'359.46 points. On the Nasdaq, however, the indices could not recover noticeably from the almost -3% slump the day before. Asia today showed a mixed picture on the stock exchanges. The mood was clouded by new economic data from China. The official purchasing managers' index for China's manufacturing sector weakened from 50.1 points in August to 49.6 in September, signaling a contraction for the first time since February 2020.

Japan's next Prime Minister

Former Foreign Minister Fumio Kishida, 64, is set to become Japan's new head of government, succeeding Yoshihide Suga, who resigned after just one year in the face of poor poll ratings, particularly on pandemic control. Kishida is considered a moderate conservative. In geopolitical terms, he is likely to reaffirm the strategic partnership with the United States. In terms of economic policy, Kishida speaks of a “new capitalism” that should reduce the income gap between rich and poor. The new head of government also wants to promote clean energy technologies but is also in favor of nuclear energy.

More optimistic economic sentiment in the euro countries

After the EU Commission's sentiment barometer for the eurozone peaked for the time being in the summer, companies and consumers were more optimistic again in September. The Economic Sentiment Indicator (ESI) improved by 0.2 points compared with the previous month to 117.8 points, while analysts had expected a further decline to 117.0 points. However, developments differed in the various sectors of the economy. For example, sentiment improved in the industrial and consumer sectors, while the service and retail sectors expressed more pessimistic sentiment. At regional level, economic sentiment brightened in Germany, Spain, and the Netherlands, but clouded over in France and Italy.

Inflationary pressure in Spain continues to increase

The cost of living in Spain increased again in September. Over the year, consumer prices rose by +4.0%, reaching their highest level in around 13 years and significantly exceeding analysts' expectations (consensus +3.6%). As recently as August, the annual inflation rate was +3.3%.

WHO Covid-19 vaccination target missed by a wide margin

The World Health Organization's (WHO) target of having at least ten percent of the population vaccinated against the coronavirus in every country by the end of September was clearly missed, according to the organization. In Africa in particular, the vaccination rate is significantly lower. In addition to a lack of vaccine, capacity problems are also responsible for the low vaccination rates in many countries. The WHO criticizes above all the fact that rich countries hoard vaccine doses, mostly for the foreseeable booster vaccination. Meanwhile, millions of people worldwide would urgently wait for a first vaccination. So far, rich countries have promised to donate more than one billion vaccine doses, but have delivered less than one-fifth of them.

 

Economic Indicators September 30

MEZ Country Indicator Last period
08:00 GE Import Prices (August, m/m) +2.2%
08:45 FR Consumer Prices (September, y/y) +2.4%
08:45 FR Consumer Spedning (Augsut, y/y) -2.2%
09:00 SZ KOF Economic Indicator (September) 13.5
09:55 GE Unemployment Rate (September) 5.5%
11:00 IT Consumer Prices (September, y/y) +2.5%
11:00 EZ Unemployment Rate (August) 7.6%
14:00 GE Consumer Prices (September, y/y) +3.4%
14:30 US GDP Q2 (Revision, q/q)
14:30 US Initial Jobless Claims (weekly) 351,000
15:45 US Chicago PMI (September) 66.8
16:00 US Fed Governor Powell & Treasury Yellen Testamony 

 

Earnings Calender September 30

Country Company Period
SWE H&M Q3
SZ Novartis ESG Investor Day

 

LGT helps you make informed investment decisions

All about global economic and market trends at a glance

Subscribe to LGT's research newsletters

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

Imprint
Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi, +41 44 250 78 59, E-Mail: lgt.navigator@lgt.com
Source: LGT Bank (Switzerland) Ltd.

Risk Disclosure (Disclaimer)
This publication is an advertising material / marketing communication. This publication is for your information only and is not intended as an offer, solicitation of an offer, or public advertisement to buy or sell any investment or other specific product. Its content has been prepared by our staff and is based on sources of information we consider to be reliable. However, we cannot provide any confirmation or guarantee as to its being correct, complete and up to date. The circumstances and principles to which the information contained in this publication relates may change at any time. Information that has been published should therefore not be understood as implying that no change has taken place since its publication or that it is still up to date. The information in this publication does not constitute an aid for decision-making in relation to financial, legal, tax-related or other consulting matters, nor should any investment decisions or other decisions be made on the basis of this information alone. It is recommended that advice be obtained from a qualified expert. Investors should be aware that the value of investments can fall as well as rise. Positive performance in the past is therefore no guarantee of positive performance in the future. Investments in foreign currencies are also subject to fluctuations in exchange rates. We disclaim all liability for any loss or damage of any kind, whether direct, indirect or consequential, which may be incurred through the use of this publication. This publication is not intended for persons subject to legislation that prohibits its distribution or makes its distribution contingent upon an approval. Any person coming into possession of this publication shall therefore be obliged to find out about any restrictions that may apply and to comply with them. In line with internal guidelines, persons responsible for compiling this report are free to buy hold and sell the securities referred to in this report.