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LGT Navigator: US stock markets set again new records

July 27, 2021

Wall Street started the week on an optimistic note and the US electric car manufacturer Tesla surprised with record results after the closing bell. The focus today lies on the quarterly results of US tech giants. Meanwhile, the cryptocurrency Bitcoin is gaining in popularity again.

Wall Street

Wall Street started the week with new highs, continuing the record chase of the previous week. The S&P 500 climbed +0.2% to 4422.32 points and the Dow Jones also advanced +0.2% to 35'144.31 points. The Nasdaq 100 gained +0.1% to 15'125.95 points. Investors focused in particular on the earnings of the electric builder Tesla. The company of Elon Musk has reported a quarterly profit of more than USD 1 billion for the first time, as it announced after the closing bell. In a year-on-year comparison, this corresponds to a tenfold increase in profit, with which Tesla has exceeded market expectations.

In focus today are the quarterly results of the US technology giants: Google parent Alphabet, Apple and Microsoft present their figures.

Asian stock markets remain under pressure on Tuesday. In Hong Kong, the Hang Seng loses -1.7% and the Shanghai Composite trades with a slight loss. In Tokyo the Nikkei gains +0.5%.

German companies are less optimistic about the future

The mood in the German economy has surprisingly clouded in July. The Ifo business climate index fell by 0.9 to 100.8 points, according to the Munich-based institute. This was the first time this year that the barometer, which is one of the most important leading indicators for the development of the German economy, fell. Analysts had expected an increase to 102.5 points. Although the approximately 9’000 entrepreneurs surveyed considered the current situation as better than in the previous month, their assessment of the business outlook was worse. "Supply bottlenecks for intermediate products and worries about rising infections are weighing on the German economy," Ifo President Clemens Fuest said. He expects the economy to switch from catch-up to normal mode by the fall. Sentiment also deteriorated in the service sector, which had recently benefited greatly from the relaxation of protective measures. However, the industry still expects rising sales. 

Bitcoin gains popularity

The cryptocurrency Bitcoin once again made headlines at the start of the week: it gained around +18% on Monday and is thus worth more than USD 39’000 for the first time since mid-June. The rally was triggered by speculations that the online retailer Amazon could accept the digital currency as a means of payment in the future, after it became known that the company is looking for an expert in digital currencies and blockchain. Tesla CEO Elon Musk recently also spoke favorably about Bitcoin again, after he had caused the share price to plummet in May by expressing concerns about the digital currency. In addition, the upward trend was fueled by investors who had to cover their short positions. Thus, short positions worth USD 740 million were closed out on Monday, according to the trading platform Bybt. This is the highest amount in the past three months. Other cryptocurrencies such as Ethererum, Ripple and Dogecoin also benefited from the price jump, also posting double-digit percentage gains. Despite the reignited popularity, bitcoin is still trading well below the record high of just under USD 65’000 it reached in mid-April. 

New home sales in the US fall again

In the US, significantly fewer new homes were sold in June than in the previous month. New home sales fell by -6.6% over the month, according to the Commerce Department on Monday. It was the third consecutive decline, while analysts had expected a +3.5% increase. On an annualized basis, 676’000 new homes were sold in June, the weakest numbers since April 2020.

Economic Indicators July 27

MEZ Country Indicator Last period
15:00 US S&P/Case-Shiller house price index (May) +14.9%
16:00 US Consumer confidence (July, m/m) 127.3

 

Earnings Calender July 27

Country Company Period
US Alphabet Q2
US Apple Q3
US General Electric Q2
CH Lindt & Sprüngli Q2
CH Logitech Q1
US Microsoft Q4
FIN Neste Q2
CH SIG Combibloc Q2
US Visa Q3

 

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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.

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