Skip navigation Scroll to top
Scroll to top

LGT Navigator: Fragile stabilization

February 9, 2022

After the setbacks of the past few days, the mood on stock markets seems to have regained some footing. Substance stocks in the areas of finance, energy or consumer staples were in demand, while technology stocks continue to suffer from the anticipated interest rate turnaround of the Federal Reserve. The focus is now primarily on the latest inflation data from the US, which will be published on Thursday. In the wake of the anticipated interest rate turnaround in the US, the ECB also remains in focus. 

Fragile stabilization

On Wall Street, the indices recovered yesterday from the previous losses. After an initially weak start, the Dow Jones Industrial closed about one percent higher and the S&P 500 gained +0.8%. On the Nasdaq technology exchange, the indices gained about +1.2%. Nevertheless, the tech indices lost, in view of the upcoming first interest rate tightening by the Fed, about -15% since the beginning of the year.

ECB President Lagarde pleads for gradual and step-by-step exit

After expectations of an interest rate turnaround in the euro area gained weight on financial markets after the European Central Bank's (ECB) last monetary policy assessment a week ago, central bank chief Christine Lagarde put the matter into perspective, pointing to the geopolitical risks to Europe's economic development. An exit from loose monetary policy would also have to be gradual, Lagarde said at her hearing before the European Parliament. Nevertheless, Lagarde no longer wants to rule out initial interest rate steps this year in view of rising inflationary pressure. She said that the ECB will closely analyze the latest growth and inflation projections when it makes its next monetary policy decision in March. However, Lagarde stressed that there was currently no reason to jump to conclusions. Probably echoing the famous quote of her predecessor Mario Draghi – “whatever it takes” – the ECB chairwoman said that the ECB would show the necessary determination to ensure price stability. That commitment, she said, remains “absolutely unwavering.”

US registers record trade deficit in 2021

In the United States, the foreign trade deficit widened to a new record high in 2021. The deficit increased by almost +27% to USD 859.1 billion. Both imports (+20.5%) and exports (+18.5%) rose sharply. With China, Americans' 2021 deficit was USD 355.3 billion, up +14.5% and the highest level since a record 2018. For December, the United States reported an overall trade deficit of USD 80.7 billion, which was less than economists expected at USD 83.0 billion.

Washington once again struggles to find funding

The US House of Representatives gave the green light to a stopgap budget to prevent the government once again from running out of money as early as the end of next week. In the large chamber, the bill, which secures funding until March 11, was approved by a majority of 272 to 162 votes. Now the Senate must also approve it before President Joe Biden can sign it. Failure to pass a stopgap budget could result in a shutdown, or a partial shutdown of government operations.

  

Economic Indicators February 9

MEZ Country Indicator Last period
08:00 GE Trade Balance (December) EUR +10.9bn
10:00 IT Industrial Production (December, m/m) +1.9%

 

Earnings Calender February 9

Country Company Period
GE Deutsche Boerse Annual
GE Metro Q1
FR L'Oréal Annual
NL ABN Amro Annual
NL Akzo Nobel Annual
NL Aegon Annual
AUT Voestalpine Q3
SWE Svenska Handelsbanken Annual
DKK A.P. Moller-Maersk Annual
UK GlaxoSmithKline Annual
US Walt Disney Q4
US Uber Technologies Q4
US Mattel Q4

 

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: Tina Haldner, 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.