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LGT Navigator: Quarterly earnings provide positive impetus

October 20, 2021

Several stronger-than-expected company results, for example from the US pharmaceuticals group Johnson & Johnson, provided optimism on the New York Stock Exchange. A topic on the stock exchanges yesterday was also the launch of the first exchange-traded fund in the US, which tracks financial products on Bitcoin (ETF). The so-called “Beige Book”, the regular economic report of the US Federal Reserve, is now eagerly awaited this evening.

Quarterly earnings provide positive impetus

Solid quarterly figures from Johnson & Johnson or the insurer The Travelers provided price gains on Wall Street yesterday. The Dow Jones Industrial went out with a daily performance of +0.56% at 35,457.31 points and thus holds near the record high of mid-August. The S&P 500 gained even more strongly by +0.74% to 4,519.63 points and daily gains of the same magnitude were observed on the Nasdaq.

In Asia, the friendly tone on the stock markets continued Wednesday. At the same time, yields on long-term US Treasury bonds climbed to a five-month high, while the yen fell to a four-year low against the US dollar.

Stock market debut for bitcoin ETF

Cryptocurrencies have cleared another major hurdle in establishing themselves as an investment for a broad audience. The first bitcoin futures ETF started trading on the New York Stock Exchange on Tuesday. The ETF of the provider ProShare tracks the development of bitcoin futures on the US futures exchange CME, so investors speculate on the future price development of the digital currency. The first applications for approval of Bitcoin ETFs were submitted years ago but were stopped by the U.S. Securities and Exchange Commission (SEC) due to concerns about insufficient investor protection. Now that the premiere has succeeded, the offering is likely to expand soon, as the SEC is currently reviewing numerous other applications to approve bitcoin futures ETFs.

Bleak outlook for US construction industry

Construction activity in the United States surprisingly contracted in September. Thus, housing starts fell by -1.6% compared to the previous month, as reported by the Commerce Department on Tuesday in Washington. Analysts had expected no change. In addition, housing starts in August increased much less than previously expected and grew only +1.2% instead of +3.9%. The number of building permits, which provide an indication of future construction activity, also fell by -7.7% month-on-month. Market observers had expected a -2.4% decline after more building applications were filed in August.

IMF revises growth forecast for Asia

The Asian economy is likely to recover from the consequences of the corona pandemic at a much slower pace this year than expected in April. This is the conclusion of the International Monetary Fund (IMF), which has revised its economic forecast for the Asia-Pacific region downward and still expects growth of +6.5% in 2021. This is 1.1 percentage points less than estimated in the spring. For 2022, the IMF forecasts a plus of 5.7% (previously: +5.3%) and for 2023 the estimate remains unchanged at +5%.According to the IMF, the upswing is being held back by the effects of the pandemic, with low vaccination rates and high infection rates causing ongoing problems. Although the region has the highest growth rate in a global comparison, the differences between the individual economies are large and have recently become more pronounced. This is mainly because the availability of corona vaccines and the financial capacity of governments to mitigate the crisis vary widely.


Economic Indicators October 20

MEZ Country Indicator Last period
08:00 UK Consumer Prices (September, y/y) +3.2%
08:00 UK Core Consumer Prices (September, y/y) +3.1%
08:00 UK Producer Prices (September, y/y) +5.9%
08:00 GE Producer Prices (September, y/y) +12.0%
09:00 AUT Consumer Prices (September, y/y) +3.2%
11:00 EZ Consumer Prices (September, y/y) +3.4%
11:00 EZ Core Consumer Prices (September, y/y) +1.9%
20:00 US Fed Beige Book


Earnings Calender October 20

Country Company Period
SZ Roche Q3 Sales
SZ Nestlé Q3 Sales
SZ Kuehne & Nagel Q3 
SZ Givaudan Investor Day
NL Akzo Nobel Q3
SWE Svenska Handelsbanken Q3
SWE Skandi Banken Q3
USA Tesla Q3
USA Verizon Communications Q3
USA Abbott Laboratories Q3
USA Nasdaq Q3


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Source: LGT Bank (Switzerland) Ltd.

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