On Wall Street, the Dow Jones Industrial market barometer rose by +1.05% yesterday to 27 976.84, maintaining its level around the 28 000 mark. The broad-based S&P 500 also rose by +1.4% to 3 380.35 points, and is thus back on track towards its record high of around 3 393 points reached on February 19. After the profit-taking of the last few days, the technology-heavy Nasdaq 100 again recorded a strong gain of +2.59% and is now trading at 11 157.72 points. Equity investors are thus unperturbed, as the Republicans and Democrats in the US Congress have so far been unable to agree on the economic stimulus package anticipated by the financial markets. According to the President of the House of Representatives, Nancy Pelosi, the negotiations are currently at an impasse. “We are miles apart,“ she said. The positive trend continued on most of the Asian stock exchanges. In Tokio, the Nikkei 225 gained +1.8%
According to Boston Federal Reserve Chairman Eric Rosengren, the slowdown in economic activity in the US is likely to continue due to the corona measures and consumer reluctance to spend. Rosengren warned that insufficient measures to contain Covid-19 are likely to prolong the economic downturn. Addressing the US Congress, the senior Federal Reserve Chairman said that now is the time for strong fiscal measures.
Consumer prices in the US rose more strongly than expected in July. Over the year as a whole, the inflation rate rose from +0.6% in June to +1.0%. Economists had expected an average inflation rate of +0.7%. On a month-on-month basis, consumer prices rose by +0.6% in July, driven primarily by higher energy prices. But even without taking energy prices or food prices into account, the core inflation rate rose much more strongly than expected last month, by +0.6% compared with the previous month - the strongest monthly increase since 1991! For the year as a whole, the core inflation rate in July was +1.6% after +1.2% in June - the highest level in four months.
Euro area industry recovered from the corona shock in June, with production up 9.5% month-on-month. This means that industrial production grew somewhat more strongly than analysts had expected with +9.1%. As a result of the corona crisis, production fell by -11.8% in April and by -12.3% in May. On an annualized basis, however, industrial production in June was -12.3% lower (consensus -11.4%).
Gross domestic product in the UK fell by -20.4% in the second quarter compared with the previous quarter due to the economic standstill caused by the corona crisis. This is the largest decline ever reported by an industrialized country. As the British economy had already contracted in the first quarter, economists are already talking about a recession. With more than 46 000 Covid-19 related deaths to date, the pandemic has hit the UK particularly hard. In its forecasts, the Bank of England expects GDP to fall by a total of -9.5% this year before a recovery sets in in 2021.
|14:30||US||Import Prices (July, m/m)||+1.4%|
|14:30||US||Import Prices (July, y/y)||-3.8%|
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.
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.