On Wall Street, the Dow Jones Industrial closed slightly lower compared to the previous day at 33'981.57 points (-0.18%), while the S&P 500 reached a new record high of 4'194 points during the day and ended the day at 4'187.62 points (+0.18%). On the technology exchange Nasdaq 100, the indices posted stronger daily gains of around +0.7%. Today and in the next few days, the quarterly financial statements of the heavyweights in the US technology sector are the focus of attention: Microsoft and Alphabet (today), Apple (Wednesday), Amazon (Thursday). Already yesterday, after the closing bell, Tesla reported. The American electric carmaker posted strong growth in the opening quarter and achieved the highest quarterly profit to date. In Q1, Tesla reported a net profit of USD 438 million, compared to a profit of USD 16 million in the same period last year.
In Asia, uncertainties around the pandemic prevailed given the catastrophic situation in India and flare-ups of virus infection numbers in parts of Southeast Asia. The decision of the Bank of Japan to leave its key interest rates unchanged did not move the markets. In Europe today, among others, the domestic stock market heavyweights UBS, Novartis and ABB are in the spotlight. The major Swiss bank UBS increased profit in Q1 thanks to higher revenues and lower credit risks, but the default of the US hedge fund Archegos reduced the profit noticeably. Overall, UBS beat market expectations.
The Bank of Japan left its key interest rate unchanged, as expected, but raised its growth forecast for the fiscal year that began on April 1 to +4.0% from +3.9% previously. Growth of +2.4% is expected for the year ending March 2023, up from a previous forecast of +1.8%. However, regarding the inflation trend in Japan, the central bank remains miles away from its target and a turnaround in interest rates is therefore still likely to be a long way off. According to the BoJ, it is unlikely that inflation will reach the central bank's target of 2% in the next three years.
The roughly 8'000 companies surveyed monthly by the Munich-based economic research institute Ifo remained cautious in the latest poll regarding their economic assessment. Although the business climate barometer improved in April for the third month in a row, it only rose minimally by 0.2 to 96.8 points. Analysts had expected a stronger increase to 97.8 points. On the one hand, companies were more optimistic about the current environment, while on the other hand, the outlook remains burdened by uncertainties. At sector level, a further improvement was seen in industry and trade, but the business climate among service providers and in the construction sector clouded over. According to Ifo President Clemens Fuest, the third wave of infections and shortages of intermediate products are dampening the recovery of the German economy.
New orders for durable goods, i.e. products with a lifespan of at least three years, increased less strongly in March than economists had expected. On a monthly basis, orders rose +0.5% compared to a significantly higher consensus forecast of 2.2%. In the previous month, Durable Goods Orders had declined by a revised -0.9% (first estimate -1.2%). However, orders for civilian capital goods excluding aircraft, which are considered an important measure of business investment, increased by +0.9% in March.
|10:00||GE||Ifo Business Climate Survey (April)||96.6|
|14:30||US||Durable Goods Orders (March, m/m)||-1.2%|
|FR||Schneider Electric||Q1 Sales|
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Source: LGT Bank (Switzerland) Ltd.
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