Skip navigation Scroll to top
Scroll to top

LGT Navigator: Stalemate

June 9, 2021

The stock market environment remains fundamentally friendly, but ongoing inflation and interest rate concerns, as well as high valuations, are putting pressure on investors' risk appetite. As a result, the indices on Wall Street moved sideways on Tuesday and investors seem to be waiting for new impetus. With excitement, the latest inflation data from the US and the interest rate decision of the ECB are already expected on Thursday.

Stalemate

The Dow Jones Industrial closed yesterday virtually unchanged at 34'599.82 points (-0.09%) but is only close to the record high reached about a month ago at 35'092 points. Sideways was also the motto for the S&P 500, which went out of trading on Tuesday at 4,227.26 points (+0.02%). On the technology exchange Nasdaq also lacked the impetus and so the daily balance remained with the Nasdaq 100 at 13'810.86 points (+0.06%) also “flat.”

On Asian stock exchanges no trend was discernible on Wednesday morning. In Tokyo, the 225-value Nikkei index -0.3% lower at 28'876 points and in Hong Kong, the Hang Seng index is also trading slightly lower at 28'750 points (-0.1%). On the Chinese mainland, however, the Shanghai Composite rose slightly by +0.2% to 3'588 points. The futures also give no clear direction for Europe's stock indices today so far. 

China's producer prices with strongest increase in 13 years

In China, prices at the producer level rose by +6.8% year-on-year in May, the strongest increase since 2008. Recent sharp increases in the prices of oil, iron ore and other metals drove producer prices up. These price increases could be passed on to consumers with a time lag. So far, however, consumer price inflation in the People's Republic has remained moderate at an annual rate of +1.3%.

World Bank raises global growth forecast

The Washington-based World Bank is slightly more optimistic in its forecast for the global economy published yesterday. A global growth rate of +5.6% is now expected for the current year. The current forecast is thus 1.5 percentage points higher than at the beginning of the year and holds out the prospect of the strongest economic recovery from recession since 1940. According to the World Bank, the global economy should benefit from US stimulus spending and faster growth in China. The agency sees risks above all from the “highly uneven” distribution of Covid-19 vaccines.

Euro economy: setback in the first quarter much smaller than feared

Economic output in the eurozone fell by -0.3% in the first three months of the current year compared with the previous quarter. However, the decline was only half as sharp as had been assumed in an initial estimate. But as GDP already contracted by a revised -0.6% in the final quarter of 2020 (previous calculation -0.7%), economists are talking about a recession.

Global supply chain problems shrink US trade deficit

The US trade deficit narrowed in April to USD 68.9bn in April from a record high of USD 75.03bn in March due to weaker imports amid intensified problems in global supply chains. Imports fell -1.4%, while exports rose +1.1%. Companies around the world are complaining of difficulties in meeting increased demand against the backdrop of the economic recovery.

Economic Indicators June 9

MEZ Country Indicator Last period
08:00 GE Exports (April, m/m) +1.2%
08:00 Ge Imports (April, m/m) +6.5%

 

Earnings Calender June 9

Country Company Period
AUT Voestalpine Y

 

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.