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LGT Navigator: Recovery on Wall Street continues

April 5, 2022

Sentiment on Wall Street remains upbeat at the start of the week. Tesla CEO Elon Musk is causing a stir with his involvement in Twitter. Meanwhile, pressure is mounting on European countries to tighten sanctions against Russia after atrocities against civilians in the Ukrainian town of Butcha became known over the weekend. The price of oil is rising.

Wall Street

US stock markets continue their upward trend in the new week. The S&P 500 has gained +0.8% on Monday and the Dow Jones Industrial advanced +0.3%. The Nasdaq Composite even gained +1.9%.

In focus were the shares of Twitter. The controversial tech billionaire Elon Musk has secured a 9.2% stake in the company and thus becomes the largest shareholder. The chief of electric car manufacturer Tesla is himself one of Twitter's most prominent users. In the past, he got into trouble with the US Securities and Exchange Commission (SEC) when he shared business-relevant information via tweet. Musk's intentions in joining Twitter have not yet been revealed. For now, he is not seeking an active role in the company. Shares of Twitter shot up +27% on Monday.

Asian stock exchanges also continue the previous day's gains on Tuesday. In Tokyo, the Nikkei gains +0.2%.

Struggling over energy embargo

In Europe, top politicians are preparing the next round of sanctions against Russia, following the publication of pictures and reports from the Ukrainian town of Bucha in recent days, which testify to hundreds of civilian deaths. Russian troops are believed to be responsible for the crimes. EU Council President Charles Michel spoke of a massacre against the population of the city close to Kyiv and announced further measures against Russia. EU Commission Vice President Valdis Dombrovskis said Monday that the EU Commission is currently examining scenarios for a ban on Russian energy imports. ”It is clear that we as the European Union need to do more to stop this war and these atrocities,“ he said. However, there is still disagreement among member countries on a quick stop to oil and gas supplies from Russia. German Economy Minister Robert Habeck said Germany was pushing for independence from Russian energy, but an immediate embargo was out of the question. Concerns about a further tightening of energy supplies caused oil prices to rise: North Sea Brent rose by around +3.7% to over USD 108 per barrel on Monday.

Breather for the German export sector

Despite supply bottlenecks, the German economy exported significantly more in February than in the previous year. Exports rose by +14.3% year-on-year, the Federal Statistical Office reported on Monday. Imports increased by +24.6% in the same period. Export and import activity also gained momentum compared to January. However, the figures do not yet fully reflect the impact of the war in Ukraine and the sanctions imposed on Russia. Following the Russian attack on Ukraine on February 24, trade with Russia has already decreased compared to January (exports: -6.3%, imports: -7.3%). The German export sector recovered last year from the setback during the corona crisis. Now, further supply bottlenecks, sanctions and the inflation trend threaten to stall the recovery.

Gloomy outlook for the European economy

The war in Ukraine is weighing on economic sentiment in the eurozone. Thus, the Sentix economic index fell to -18 points in April, 11 points weaker than in the previous month. This is the lowest reading since July 2020. Analysts had only expected a decline to -9.5 points. According to Sentix, the financial experts surveyed assessed both the current economic situation and the outlook negatively. The consulting company now anticipates a recession in the eurozone as well as in Germany.


Economic Indicators April 5

MEZ Country Indicator Last period
02:30 JP PMI Services (March) 48.7
10:00 EZ PMI Services (March) 55.5
14:30 US Trade balance (February) -89.7 bn USD
16:30 US ISM-Index Services (March) 56.5


Earnings Calender April 8

Country Company Period
CH Ems Chemie Q1 2022


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