The Dow Jones Industrial after the opening of the stock market initially gained almost +1%, but then closed at 34'575.31 points with only a moderate daily gain of +0.13%. The broad S&P 500 was virtually unchanged at 4'202.04 points (-0.05%) and on the Nasdaq, the technology indices slipped slightly by the closing bell. The Nasdaq 100 lost -0.23% and the Nasdaq Composite -0.09%. In Asia, the picture was similar, and the stock indices trended inconsistently and without a clear trend on Wednesday; on the one hand supported by the hope of a fulminant recovery of the global economy thanks to a containment of the corona pandemic, and on the other hand held back by the fear of a withdrawal of monetary stimulus due to excessive inflation. Now, the regular economic report of the Federal Reserve, the so-called Beige Book, is eagerly awaited this evening (20:00 CET).
In American industry, growth accelerated more than expected in May. The Purchasing Managers' Index of the Institute for Supply Management (ISM) rose from 60.7 to 61.2 points, while analysts had expected a slight slowdown to 60.5. The order situation of the companies surveyed was particularly strong. The positive outlook was also confirmed by IHS Markit's Purchasing Managers' Index, published virtually at the same time, which showed a reading of 62.1 points for US manufacturing in May, a strong increase from 60.5 points the month before. According to IHS Markit, new orders increased at the fastest pace in 14 years thanks to revived domestic demand and record exports.
The Purchasing Managers' Index (PMI) for the industrial sector in the eurozone, which is published twice a month by IHS Markit, improved from 62.9 points in April to 63.1 points in May, thus reaching the best value since the start of the data series in mid-1997. As a result, the sentiment barometer has also been above the growth threshold of 50 points for eleven months. According to the London-based institute, a “huge increase in new orders” was observed and all PMIs in all euro countries covered signaled an expansion of the industrial sector. However, supply bottlenecks are increasingly leading to a significant rise in input costs. Record supply delays are limiting output growth and leaving companies unable to meet demand at full capacity, IHS Markit commented.
In the UK, IHS Markit also noted a marked improvement in the industrial sector, and here too the PMI climbed to a record level. Compared with the previous month, the indicator rose by 4.7 points to 65.6 – the highest level since the survey began almost 30 years ago. The successful containment of the pandemic and the ongoing vaccination campaign had significantly brightened the outlook for British industry, the institute explained.
The Purchasing Managers' Index for the Swiss industry rose by 0.4 points to 69.9 in May, also the highest level since the beginning of 1995. According to the industry association procure.ch, the recovery of Swiss industry is broad-based and likely to continue for the time being in view of the good order situation, although production momentum has slowed somewhat.
In the eurozone, consumer prices rose by +2.0% year-on-year in May, which was a stronger increase from the previous month's level (+1.6%) than the +1.9% forecast by economists on average. The price trend is mainly driven by the base effect of significantly higher energy prices over the year. So far, the European Central Bank (ECB) has been relaxed about the rising inflationary pressure and considers it to be only temporary and not sustainable. Core inflation, excluding the often-volatile prices for energy, food, alcohol, and tobacco, also increased in May, but at +0.9% (previous month: +0.7%) it was much more moderate.
Unemployment in the euro countries declined slightly in April. According to Eurostat, the unemployment rate fell from 8.1% in March to 8.0%. This means that 13.03 million people were out of work in the currency area. Unemployment is lowest in the Netherlands at 3.4% and highest in Greece and Spain at 15.8% and 15.4%, respectively.
|08:00||GE||Retail Sales (April, y/y)||+11.0%|
|11:00||EZ||Producer Prices (April, y/y)||+4.3%|
|20:00||US||Fed Beige Book|
|US||Apple Developer Conference WWDC|
|US||Pharma Conference ASCO|
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Source: LGT Bank (Switzerland) Ltd.
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