Skip navigation Scroll to top
Scroll to top

LGT Navigator: The fear of a second corona wave is increasing

July 29, 2020

While the momentum of new coronavirus infections is picking up again worldwide, investors are hoping for the positive effect of the trillion-dollar new aid package currently being negotiated in Washington. Meanwhile, financial markets are eagerly awaiting the Fed's monetary policy decision tonight.

The fear of a second corona wave is increasing

While part of the global economy has not yet survived the first wave of the Covid-19 pandemic, signs of a second wave are increasing. With a view to the rising number of infections at home and abroad, the head of the German Robert Koch Institute, Lothar Wieler, said: “We are in the middle of a rapidly developing pandemic“. Some countries already feel compelled to impose at least local lockdowns and the tourism industry is once again being severely affected by the renewed increase in insecurity and rapidly changing danger situation.

In Asia, most stock indices were under pressure today against the background of the current corona situation. The Tokyo stock exchange was weaker and the Nikkei index, which comprises 225 stocks, fell by -1.15% to 22 397.19 points. Previously, the Dow Jones Industrial had already lost 0.77% and closed at 26379.28 points. The broad-based S&P 500 declined by -0.65% to 3 218.44 points.

How does the Fed view the current world situation?

On its monetary policy decision this evening at 8:00pm (CET), the US Federal Reserve (Fed) is likely to seek to underpin its support for the US economy in the corona crisis. A cut in key rates is not expected, but Fed Chairman Jerome Powell may well announce further measures.

ECB extends dividend moratorium

The European Central Bank's (ECB) banking regulator announced yesterday that it would suspend its recommendation to European commercial banks to pay dividends and buy back shares until January 2021. So far, the ECB's moratorium has been in place until at least October 1st. The recommendation would remain limited in time and the ECB emphasized an exception.

Pfizer raises earnings outlook

The US pharmaceutical giant Pfizer is optimistic and has raised its profit forecast for 2020. The company now expects adjusted earnings per share of USD 2.28-2.38. Previously, the EPS forecast was 2.25-2.35. Overall, quarterly earnings and sales declined, but less than analysts had expected. Pfizer is currently working feverishly on a corona vaccine and only yesterday announced that it will test a vaccine candidate developed in collaboration with the German biotech company BioNTech on volunteers. If the tests are successful, an application for approval of the vaccine could be submitted as early as October.

Economic Indicators July 29

MEZ Country Indicator Last
20:00 US FOMC monetary policy announcement +0.0-0.25%

Earnings Calendar July 29

Country Corporate Period
GE BASF Q2
GE Deutsche Bank Q2
GE Deutsche Boerse Q2
FR Sanofi H1
FR Schneider Electric H1
IT Enel H1
SP Banco Santander H1
UK Barclays H1
UK GlaxoSmithKline H1
UK Rio Tinto H1
US General Electric Q2

 

 

 

LGT helps you make informed investment decisions

All about global economic and market trends at a glance

Subscribe to LGT's research newsletters

Follow us on TwitterFacebook or LinkedIn, where we inform you about latest market developments and LGT News. Further informationen is available on: LGT Social Media.

Imprint
Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi, +41 44 250 83 48, 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.

US employment growth remains dynamic at the beginning of the year