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LGT Navigator: Tech stocks provide boost on Wall Street

January 23, 2023

On the New York Stock Exchange, the equity indices posted a solid end to the week on Friday, driven by strong tech stocks. Technology stocks on the Nasdaq benefited from unexpectedly good quarterly figures from Netflix. ECB chief Lagarde, meanwhile, emphasised continuing the current monetary policy stance and warned of inflationary effects from the reopening in China. Besides the ongoing corporate earnings season this week, the upcoming leading indicators, in the form of the regular Purchasing Managers' Surveys, are likely to show how high the probability of recession in Europe and the US is now.

Tech stocks provide boost on Wall Street
Shutterstock

The Dow Jones Industrial closed on Friday at 33,375.49 points with a daily gain of 1.0%. Nevertheless, it was still down 2.7% for the week. The S&P 500 gained 1.89% to 3,972.61 points before the weekend. The strongest gains, however, were on the Nasdaq, where the indices were around 2.8% higher. Netflix's stronger-than-expected subscriber figures were particularly responsible for the good mood in the tech sector. Shares in the streaming pioneer gained more than 8% and reached their highest level in nine months.

In the bond market, meanwhile, the benchmark yield on ten-year US government securities remained nearly unchanged at just under 3.5%. The US dollar weakened against the euro at the beginning of the week and is now trading close to the 1.09 mark.

In Asia, most stocks rose on Monday, but most stock exchanges remained closed for the Chinese New Year - some, like Shanghai, for the whole week. In Tokyo, the Nikkei 225 gained a good 1% at the start of the week.

ECB head Lagarde warns China's reopening will fuel inflation

The easing of pandemic measures in China and the reopening of the economy and consumption could increase inflationary pressures. This assessment was shared by ECB President Christine Lagarde at the World Economic Forum in Davos. China's reopening, she said, would be positive for China in particular, but also for the rest of the world. Nevertheless, this is likely to increase inflationary pressure because China's energy consumption will rise. The additional demand will lead to higher inflationary pressures, Lagarde said.

ECB leaders call for continuation of decisive course

The European central bank president had already stressed on Friday that the ECB wants to continue the fight against high inflation with determination. According to Lagarde, the ECB must stay the course, although inflation may have already peaked. The ECB will do what is necessary, Lagarde stressed at the WEF in Davos. ECB Governing Council member Klaas Knot also reiterated that the ECB should continue the pace of rate hikes (by half a percentage point) at the next two meetings. "I think we will stay in tightening mode until the summer," the Dutch central bank president opined.

Economic Indicators January 23

CET Country Indicator Last period
16:00 EZ Consumer Confidence (January) -22.2
16:00 US Leading Indicator (January) -1.0%
11:00 EZ ECB President Lagarde speaks

Earnings Calender January 24

Country Company Period
SZ Logitech Q3
US Johnson & Johnson Q4
US Visa Q4
US Verizon Q4
US General Electric Q4

 

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Imprint
Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi, E-Mail: lgt.navigator@lgt.com
Source: LGT Bank (Switzerland) Ltd.

 

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