Skip navigation Scroll to top
Scroll to top

LGT Navigator: Investor confidence keeps stock indices near recent record highs

April 7, 2021

The strong economic data from the US and to some extent also from Europe and China had an impact and ensured a good underlying mood on Europe's stock exchanges and on Wall Street at the start of the week, which was delayed due to the holiday. In view of the recent record highs, however, there was also profit-taking. Hopes for a further recovery of the global economy are also reinforced by the latest IMF forecasts. 

Investor confidence keeps stock indices near recent record highs

After the EuroStoxx 50 reached 3'977 points on Tuesday morning, the highest level in more than 13 years, the stock indices in New York also held near their recent highs. The Dow Jones Industrial closed -0.29% lower at 33'430.24 points and the broad S&P 500 exited the day's trading with a modest -0.1% loss at 4'073.94 points after hitting another record high. The technology-heavy Nasdaq 100 also declined only slightly by -0.14% to 13'578.46 points. Against the backdrop of the massive US stimulus packages, the continued expansionary stance of the major central banks and the Covid-19 vaccination campaign gaining momentum, the medium-term trend for the stock markets still seems positive.

Asian stock markets tended in the majority slightly firmer and for the European stock exchanges, the futures signal an opening with minimal losses after a friendly start after Easter. Today, among other things, the focus is on the meeting of the G20 finance ministers and central bank heads. Discussed will be the further strategy to cope with the corona pandemic. 

IMF raises growth forecast for global economy

Despite the ongoing corona pandemic, the International Monetary Fund (IMF) expects the global economy to grow more strongly again. As a result, the IMF is raising its global economic forecast for this year from +5.5% to +6.0% and for next year from +4.2% to +4.4%. The stronger growth is due to the ongoing Covid-19 vaccination campaign, measures to support the economy, and the adaptability of the global economy, commented IMF Chief Economist Gita Gopinath. In the US, the organization expects a strong growth spurt this year thanks to fiscal stimulus. Accordingly, the GDP forecast has been raised from +5.1% to +6.4%. However, the IMF also expects minimally stronger economic growth in the euro zone: The new forecasts for 2021 and 2022 are +4.4% and +3.8%, respectively, compared to the previous assumption of +4.2% and +3.6%.

Investors are very confident about economic development in the euro area, according to Sentix

The monthly indicator for the assessment of the economic environment and outlook in the eurozone, which is collected by the German financial market analysis company Sentix, improved significantly in April. The economic index climbed by 8.1 points to 13.1, reaching its highest level since August 2018. Analysts had on average expected only a slight brightening to 6.7 points. Another particularly positive factor was that both the expectations and the assessment of the current situation of the investors surveyed improved significantly. Investors are building on a potential further expansion of fiscal stimulus and accelerated impetus across the EU, the Sentix commented.

Stable unemployment rate in the euro area

Unemployment in the euro area was little changed in February. As in January, the unemployment rate was 8.3% in February, but the previous month's figure was revised up to 8.3% from 8.1%. According to Eurostat, around 13.6 million people were out of work in the 19-euro countries in February. In the EU, the figure was just under 16 million. Since the beginning of the Corona crisis, unemployment has risen significantly, but thanks to short-time work at a much lower rate than in the aftermath of the 2008/09 financial crisis. 1.51 million more people were registered as unemployed in the euro zone than in the same month a year earlier. In the EU, unemployment increased by 1.92 million.

 

Economic Indicators Arpil 7

MEZ Country Indicator Last
09:15 SP IHS Markit PMI Services (March) 43.1
09:45 IT IHS Markit PMI Composite (March) 51.4
09:50 FR IHS Markit PMI Composite (March) 49.5
09:55 GE IHS Markit PMI Composite (March) 56.8
10:00 EZ IHS Markit PMI Composite (March) 52.5
10:30 UK IHS Markit PMI Composite (March) 56.6
14:30 US Trade Balance USD -68.2bn
20:00 US FOMC Minutes

Earnings Calender April 9

Country Corporate Period
SZ Ems Chemie Q1 Sales

 

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: Alessandro Fezzi, +41 44 250 78 59, 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