Federal Reserve Chairman Jerome Powell was able to allay investors' fears of further increases in bond yields somewhat at his semi-annual hearing in the US Congress. In addition, the Fed Chairman reiterated that the central bank would maintain its expansionary monetary policy and securities purchases for the foreseeable future in order to lead the economy out of the corona crisis – one of the cornerstones of the stock market rally. After the Dow Jones Industrial came under pressure at the beginning of the trading day, the stock market barometer recovered and even reached another record high of just under 32'010 points. At the close of trading, the Dow was quoted with a solid daily gain of +1.35% at 31'961.86 points. The market-wide S&P 500 closed +1.14% higher at 3'925.43 points. Wanted were particularly energy, industrial and financial stocks. The banking index reached yesterday the highest level since 2007. On the Nasdaq technology exchange, the recovery from recent losses was not so strong. The selection index Nasdaq-100 index lost in early trading still -1.2% and then ended Wednesday +0.81% higher than the previous day at 13'302.19 points.
The mood on stock exchanges was also positively affected by the news that the Covid-19 vaccine from Johnson & Johnson, which requires only one dose, was approved in the United States and according to the US Food and Drug Administration (FDA) shows high effectiveness. The latest data from the US housing market was also well received. For example, new home sales rose unexpectedly strongly in January. New home sales increased at the beginning of the year by +4.3% compared to the previous month, while economists had expected a much smaller increase of +1.7%.
In Asia, the stock exchanges rose today across the board and for the European stock markets, the futures signal a positive start to trading. In focus today is also the EU video summit, which runs until Friday. The members of the European Council will discuss, among other things, the status of the pandemic.
There is a risk, she said, that many developing countries will be weakened by the pandemic for years to come, while advanced economies and a few emerging economies will recover more quickly. This dangerous divergence must be avoided at all costs, IMF Managing Director Kristalina Georgieva said. Therefore, she said, G20 countries must now work more closely together and adopt policies to help poor countries procure and distribute Covid-19 vaccines. There needs to be a redistribution of surplus vaccines from surplus to deficit countries, she said. The IMF estimates that by the end of 2022, cumulative per capita income in emerging and developing countries (excl. China) will be about 22% below pre-crisis levels.
GDP figures confirmed yesterday by the Federal Statistical Office showed that the German economy grew by +0.3% quarter-on-quarter in the final quarter of 2020, despite the renewed lockdown. Growth in the fourth quarter was supported by exports and construction investment, while private consumer spending fell sharply by -3.3% compared with the previous quarter. For the year as a whole, the German economy contracted by -4.9%, slightly less than previously calculated at -5%. Last year, spending on the billion-euro corona aid packages was offset by falling revenues. Tax revenue decreased significantly, partly due to the temporary reduction in value-added tax. For the current year, the German government in Berlin is currently forecasting economic growth of +3%.
The mood of French companies deteriorated in February due to the persistently high number of new Covid-19 infections. The business climate barometer dropped from 91 to 90 points. Prior to the decline at the beginning of the year, business sentiment had tended to recover from the corona slump. The companies surveyed in the service and retail sectors in particular were more pessimistic. The background to this is the continuing tense pandemic situation in France. The government in Paris is currently considering renewed restrictions. According to government spokesman Gabriel Attal, the situation has deteriorated again and in around ten Départements the situation is even very worrying.
|08:00||GE||GfK Consumer Climate (March)||-15.6|
|08:45||FR||Consumer Sentiment (February)||92.0|
|10:00||IT||Consumer Sentiment (February)||100.7|
|11:00||EZ||Economic Sentiment (February)||91.5|
|11:00||EZ||Consumer Inflation Expectations (February)||15.4|
|14:30||US||GDP Q4 (q/q, annualized)||+4.0%|
|14:30||US||Consumer Spending Q4 (q/q)||+2.5%|
|14:30||US||Duarble Goods Orders (January, m/m)||+0.7%|
|14:30||US||Initial Jobless Claims (weekly)||861,000|
|16:00||US||Pending Home Sales (January, m/m)||-0.3%|
Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi, +41 44 250 78 59, E-Mail: email@example.com
Source: LGT Bank (Switzerland) Ltd.
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