The Dow Jones Industrial climbed at the end of the past trading week by +0.69% to 34'433.84 points and thus achieved an impressive gain of almost +3.5% over the week. The S&P 500 exited the day's trading on Friday at 4'280.70 points (+0.33%) recorded the strongest week since February. Stock market sentiment also remained friendly in Europe on Friday, with the EuroStoxx 50 posting a weekly gain of just under one percent. Equity indices in Asia traded mostly sideways with no clear trend, but with a basic positive sentiment at the start of the week. However, the risk of rising bond yields in the face of continued inflationary pressure and the associated potential setback on the stock markets is likely to keep investors' appetite for buying in check.
Consumer prices in the United States rose by +3.4% year-on-year in May. This is the strongest price increase since April 1992, according to data from the US Department of Commerce. This calculation excludes volatile energy and food prices, so it is the core inflation rate that the Federal Reserve also uses to assess inflation. It aims for an annual inflation target of 2%, which has now been clearly exceeded. However, US central bankers have repeatedly emphasized in recent weeks and months that they consider any overshooting of inflation to be temporary and that an adjustment of monetary policy is not an issue for the time being. Meanwhile, consumer spending by US households stagnated in May, a separate survey showed. In addition, disposable household income fell somewhat, partly because direct payments to citizens from the Corona aid package have partially expired.
In Germany, consumer sentiment rose in June and is as good as it was last in August 2020, the consumer research company GfK reported on Friday. Respondents are more optimistic again about the economic situation, which is reflected in the corresponding sub-indicator, which has climbed to its highest level in ten years. Despite the brightening of the consumer climate, however, the barometer remains below the long-term average. As easing measures and progress on vaccinations continue, a noticeable recovery in private consumption is becoming more likely in the second half of the year, according to the GfK release.
French President Emmanuel Macron and right-wing populist Marine Le Pen both suffered heavy defeats in regional elections. Macron's LREM party did not emerge victorious in a single region in Sunday's second round. Le Pen's party also failed to achieve its goal of winning a region for the first time. The regions where voting took place thus remained predominantly in the hands of the bourgeois right and the left. Voter turnout remained conspicuously low – two out of three eligible voters stayed away from the polls. In ten months, the presidential elections will be held in France, and it seems that the incumbent head of state and the right-wing challenger are having great problems convincing voters with their policies.
|01:50||JP||Retail sales (y/y, May)||+11.9%|
|08:45||FR||Consumer Confidence (June)||94.0|
|09:00||SP||Consumer Prices (June, y/y)||+2.4%|
|11:00||EZ||Economic Sentiment (June)||114.5|
|14:00||DE||Consumer Prices (June, y/y)||+2.4%|
|15:00||US||S&P/Case-Shiller home price index (y/y, April)||+13.3%|
|16:00||US||Consumer Confidence (June)||117.2|
Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi, +41 44 250 78 59, E-Mail: email@example.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.