The situation on the stock markets appears to be calming down again, after the slump in prices in the middle of the week. Although the Dow Jones Industrial climbed above the 27 000 mark in the course of trading, it then fell back again and closed with a moderate daily gain of +0.2% at 26 015.61 points. The latest data from the US labor market did not provide any relief. Last week, 870 000 people applied for unemployment benefits for the first time, significantly more than analysts had predicted at 840 000. The number of initial jobless claims thus remains around four times as high as at the beginning of the year. The S&P 500 then closed virtually unchanged from the previous day (+0.02%). The Nasdaq 100 technology stock market barometer rose by +0.58% after the heavy loss of the previous day. In Asia, most of the stock indices followed the friendly lead of Wall Street. In Tokyo, the Nikkei index, which comprises 225 stocks, rose by around half a percent.
The much-noticed company survey conducted by the Munich-based Ifo Institute improved in September for the fifth month in a row, pointing to a sustained recovery from the corona shock. The business climate barometer climbed from 92.5 points in August to 93.4 points, the highest level since February. The assessment of the current situation and the outlook of the approximately 8 000 companies surveyed improved. However, the situation appears to remain tense in the service sector, where business expectations clouded over again in September. Overall, the German economy is stabilizing despite rising infection figures, the Ifo Institute commented.
Although current economic data point to a strong recovery of the economy from the corona shock, there has been a noticeable loss of momentum, particularly in the service sector. The uncertainty is dampening consumer spending and corporate investment. In its economic report published yesterday, the ECB stated that it was still very uncertain how strong the economic recovery would be and still depended heavily on the further course of the pandemic and the success of the containment measures.
As expected, the Swiss National Bank (SNB) confirmed its negative interest rate policy and emphasized that it would continue to be active on the foreign exchange market if the franc appreciated as a result of the uncertainties in the corona crisis. The key interest rate thus remains at -0.75%. The SNB stated that the continued expansive monetary policy is necessary to ensure appropriate monetary conditions in Switzerland and to stabilize economic and price developments. In its economic assessment, the central bank is confident that the Covid-19 pandemic can be kept under control without a renewed severe impact on the global economy. The SNB expects economic output to decline by -5% in the current year. The inflation rate is likely to be -0.6% and then turn slightly positive again next year at +0.1%.
Turkey's central bank unexpectedly raised its key interest rate by 200 basis points to 10.25% yesterday. Economists had expected an unchanged interest rate level. Background is also the Turkish lira which is under strong downward pressure. Most recently, the currency had fallen to record lows against the euro and the US dollar. In addition, the annual inflation rate is currently quoted at almost 12%.
|10:00||IT||Economic Sentiment (September)||80.8|
|14:30||US||Durable Goods Orders (August, m/m)||+11.4%|
Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi, +41 44 250 78 59, E-Mail: firstname.lastname@example.org
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.