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LGT Navigator: Cautious, but not negative

September 17, 2021

Sentiment on international equity markets brightened somewhat towards the weekend after several days of losses, but remains marked by a noticeable restraint on the part of investors due to uncertainties regarding the further economic recovery or the inflation trend, as well as the corresponding response of the major central banks.

Cautious, but not negative

On the US stock markets, the indices recorded slight losses yesterday. The Dow Jones Industrial ended Thursday with a moderate minus of -0.18% at 34'751.32 points. The S&P 500 closed -0.16% lower at 4'473.75 points. The mood was supported by better than expected sales data from the US retail sector. On the other hand, weekly labor market data pointed to an increase in initial jobless claims.

In Asia, most stock indices trended higher on Friday and futures also signaled a slightly positive opening for Europe's stock markets.

Stronger-than-expected sales growth in US retail sector

The American retail industry reported a surprisingly strong increase in sales in August. Compared to the previous month, retail sales rose by +0.7%, while analysts on average had expected a decline of -0.7%. On the other hand, the slump observed in July was -1.8%, even stronger than initially estimated at -1.1%. 

Philly Fed indicator signals robust growth

Economic activity in the Philadelphia region brightened in September, according to the latest survey results from the local central bank. After falling in each of the previous four months, the Philly Fed index climbed 11.3 points to plus 30.7 in September. Economists, on the other hand, had forecast a decline to 19.0 points. Earlier, the New York Fed's regional business climate barometer, the Empire State index, had also shown a surprisingly strong improvement.

Euro economy recovering faster than expected according to ECB President Lagarde

According to ECB President Christine Lagarde, the economic recovery in the euro zone is proceeding faster than expected six months ago. The gross domestic product of the 19-euro countries is now expected to return to pre-crisis levels before the end of the year, even if the growth trend has not yet fully recovered, Lagarde said. At the same time, the central bank chief called for continued cooperation between monetary and fiscal policy, i.e. between the central bank and the EU's political executive.

Seco expects continued recovery of Swiss economy

The economic recovery in Switzerland should continue, albeit somewhat less dynamically than previously assumed. This was the conclusion reached by the Swiss government's group of experts. Consequently, the growth forecast for 2021 has been lowered from +3.6% (June forecast) to +3.2%. Growth will be driven by catch-up effects in private consumption and investment, as well as by export growth.


Economic Indicators September 17

MEZ Country Indicator Last period
08:00 UK Retail Sales (August, y/y) +2.4%
11:00 EZ Consumer Prices (August, y/y) +2.2%
11:00 EZ Core Consumer Prices (August, y/y) +1.6%
16:00 US Consumer Confidence University Michigan (September) 70.3


Earnings Calender September 21

Country Company Period
UK Kingfisher H1
US FedEx Q1
US Adobe Q3


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Source: LGT Bank (Switzerland) Ltd.

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