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LGT Navigator: Uncertainties take momentum out of the stock markets

June 12, 2019

The positive sentiment on the stock markets at the beginning of the week already seems to be gone. Most recently, China's economic stimulus measures, expectations of the Fed to lower interest rates soon, and the rapprochement in the trade conflict between the US and China as well as with Mexico had boosted stock prices.

Navigator_China_Börse

On equity markets, the positive mood did not last long, after Chinese indices were able to make strong gains at the start of the week on the back of the economic support measures announced by the Chinese government. Beijing wants to boost the domestic economy by supporting investments by local authorities in infrastructure projects. At the local level, authorities are to use funds from the sale of special bonds to finance infrastructure projects and thus also finance selected projects outside the regular budget.
However, US Secretary of Commerce Wilbur Ros dampened expectations with regard to a hoped-for settlement in the customs dispute with China. At the G20 summit in Osaka, Japan at the end of the month, the negotiations on both sides could be pushed forward, but according to Ros a final agreement is not to be expected.
Today the focus will be on the latest inflation data from the US. Analysts assume that US consumer prices rose only slightly by +0.1% in May and that the inflation rate weakened from +2.0% to +1.9%. If inflation rises only slightly, this could fuel speculation that the Fed will soon cut interest rates again.

Trump attacks "his" central bank again

US President Donald Trump has once again sharply criticized the Fed. Trump twittered that the key interest rate was "far too high" and that the Fed had "no idea". As a result, the US dollar is too strong and the euro and other currencies have depreciated against the greenback, which in turn puts the US at a severe disadvantage. According to Trump, the US Federal Reserve's monetary policy is to blame for the strong dollar. The presidential attack comes just one week before the Fed's interest rate decision on June 19.

Inflationary pressure in China slightly increased in May

In China, consumer prices rose by +2.7% year-on-year as anticipated by economists. This is an increase of +2.5% on the previous month. The rise in food prices was the main contributor to the rise in prices. At the same time, producer prices in the People's Republic rose by only +0.6% in May within a year.

Amazon – most valuable brand in the world

According to an annual study conducted by market research firm Kantar, Amazon is currently the most valuable brand in the world. The online platform has thus overtaken the previous and long-standing front-runners Apple and Google. According to Kantar, the brand value of Amazon is currently USD 316 bn – an increase of 52% within one year. Apple ranks second with a brand value of just under USD 310 bn, followed by Google with USD 309 bn. Five other US companies (4th Microsoft, 5th Visa, 6th Facebook, 9th McDonald's and 10th AT&T) and two Chinese companies (7th Alibaba and 8th Tencent) ranked second. The brand value of all 100 companies amounts to USD 4.7 trillion.



Economic Indicators June 12

MEZ Country Indicator Last
03:30 CN Consumer Prices (y/y) +2.5%
03:30 CN Producer Prices (y/y) +0.9%
09:00 SP Consumer Prices (y/y) +0.9%
14:30 US Consumer Prices (m/m) +0.3%
14:30 US Consumer Prices (y/y) +2.0%
14:30 US Core-Consumer Prices (y/y) +2.1%

Earnings Calendar June 19

Country Corporate Period
US Oracle Q4

 

 

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Editor: Alessandro Fezzi, +41 44 250 78 59, E-Mail: lgt.navigator@lgt.com
Source: LGT Bank (Switzerland) Ltd.

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Herausgeber: LGT Bank (Schweiz) AG, Glärnischstrasse 36, CH-8027 Zürich
Redaktion: Alessandro Fezzi, +41 44 250 78 59, E-Mail: lgt.navigator@lgt.com
Quelle: LGT Bank (Schweiz) AG