On the New York Stock Exchange, technology stocks were once again in the spotlight. Snap had announced that the profit and revenue forecasts for the second quarter cannot be maintained due to deteriorating macroeconomic trends. As a result, the stock plummeted by more than -40%. Snap's profit warning again reinforced concerns that economic growth, not only in the US, could weaken in the face of high inflation and rising interest rates, and possibly send the global economy into recession. As a result, the indices on the Nasdaq fell yesterday by about -2.2%. The price slump at Snap also weighed on other social media stocks. Thus, the share of the photo platform Pinterest also collapsed by almost -25%. The share of Meta (Facebook) had to accept a daily loss of almost -8% and the share certificate of Google parent Alphabet fell by about -5%. Negative also closed the broad S&P 500, which closed at 3,941.48 points -0.81% lower than the previous day. The Dow Jones Industrial also recorded losses during the trading day but was able to save shortly before the close just into positive territory and ended Tuesday at 31,928.62 points (+0.15%). Investor sentiment was also burdened by worse than expected data from the US housing market. Sales of new homes fell by -16.6% in April compared to the previous month, while analysts had just expected a decline of just under -2%. The decline in New Home Sales was already the fourth in a row.
On Asia's stock exchanges, no clear trend was apparent at midweek. In Tokyo, the Nikkei 225 index was virtually unchanged from the previous day, while the Hang Seng index in Hong Kong rose by +0.5%. In Shanghai, the composite stock index is up around +0.8%.
According to ECB President Christine Lagarde, the euro economy is not heading for a recession from the current perspective despite the ongoing conflict in Ukraine – this is not the baseline scenario of the European Central Bank (ECB). On the sidelines of the World Economic Forum in Davos, Lagarde said, referring among other things to low unemployment.
Robert Holzmann, president of the Austrian central bank and member of the ECB Governing Council, considers a possible 50 basis point increase in the key interest rate in July “appropriate.” At the beginning of the rate hike cycle, a larger rate move would make sense and signal to capital markets that the ECB has recognized the need to act, Holzmann said in an interview with Bloomberg.
ECB Governing Council member and French central bank chief Francois Villeroy de Gallhau takes a different view, preferring a gradual rate hike and thus reinforcing recent statements by ECB President Christine Lagarde. A rate hike of 50 basis points is not currently the consensus of the ECB's Governing Council, Villeroy de Gallhau said on the sidelines of the World Economic Forum in Davos.
The prospect of an interest rate turnaround by the ECB in the near future drove the euro above the 1.07 mark against the US dollar on Tuesday for the first time since the end of April.
Companies in Europe's services and industrial sectors were more pessimistic in the latest purchasing managers' surveys than they were a month earlier. The S&P Global Purchasing Managers' Index fell more sharply than expected from 55.8 to 54.9 points, while analysts had expected an average of 55.1 points. However, the PMI had reached its highest level since last September in April. According to S&P Global Chief Economist Chris Williamson, the euro economy remained on an “encouragingly robust growth path” in May, despite the decline in the PMI.
|08:00||GE||GDP Q1 (q/q, revision)||+0.2%|
|08:00||GE||GfK Consumer Climate (June)||-26.5|
|08:45||FR||Consumer Sentiment (May)||88.0|
|10:00||EZ||ECB President Lagarde speaks|
|10:00||SZ||ZEW Economic Perspectives (May)||-51.6|
|14:30||US||Durable Goods Orders (April, m/m)||+0.8%|
|UK||Marks & Spencer||Annual|
Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi, 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.