LGT Navigator

Stock markets bounce back from Chinese AI scare

Global investor sentiment stabilised after a sell-off triggered by China's DeepSeek AI model to start the week. The major indices in Europe and the US recovered on Tuesday, with tech stocks in particular showing strength. Equities in the Asia-Pacific region followed suit on Wednesday. The shift in mood comes just in time for investors to focus their attention on earnings reports from major tech companies, including Meta Platforms, Microsoft, and Tesla, all due on Wednesday. Market participants are also looking ahead to the Federal Reserve’s (Fed) interest rate announcement and comments on Wednesday for clues as to how US President Donald Trump’s new policies could affect the central bank’s interest rate cutting plans this year.

Data
Autore
Shane Strowmatt, LGT
Tempo di lettura
5 minuto

Aktien Chart
© Shutterstock

US technology stocks rebounded on Tuesday, with the Nasdaq-100 rising 1.6% to 21,463.04 points, recovering more than half of Monday's losses. Concerns had emerged over the competitive edge of Chinese AI start-up DeepSeek, which had caused a nearly 3% drop in the index at the start of the week. The Dow Jones Industrial Average increased by 0.3% to 44,850.35 points, while the S&P 500 gained 0.9% to 6067.70 points. Nvidia shares surged 8.9% after Monday’s huge loss.

Mixed US macroeconomic data ahead of Fed decision

US core capital goods orders, excluding aircraft, increased by 0.5% in December, following a 0.9% rise in November, according to Commerce Department data released on Tuesday. Also made public on Tuesday was the Conference Board US Consumer Confidence Index, which fell by 5.4 points to 104.1 in January. The Present Situation Index dropped by 9.7 points to 134.3, while the Expectations Index fell by 2.6 points to 83.9. Inflation expectations rose slightly, and more consumers anticipate higher interest rates over the next year.

BOJ signals further rate hikes

Minutes from the Bank of Japan's December meeting, released on Wednesday, reveal board members discussed the use of neutral interest rate estimates to guide future rate hikes. One member noted the current policy rate remains far from neutral, suggesting room for additional increases. Despite keeping rates steady in December, the BOJ raised rates to 0.5% in January, with Governor Kazuo Ueda indicating ongoing rate hikes amid persistent inflation and wage growth.

Japan’s Nikkei 225 was trading 1% higher on Wednesday, while markets in Korea, Hong Kong and mainland China were closed due to the Lunar New Year holiday on Wednesday.

Australian CPI rises 0.2% in December quarter

The Australian Consumer Price Index (CPI) increased by 0.2% in the December 2024 quarter, matching the rise in the September quarter, according to data released by the Australian Bureau of Statistics on Wednesday. Annually, CPI inflation slowed to 2.4% from 2.8% in the previous quarter and was slightly lower than the market had expected. That helped Australia’s S&P/ASX 200 to advance 0.6% on Wednesday.

Euro-area banks tighten credit access

Euro-area banks significantly tightened credit access for firms last quarter and anticipate further restrictions in early 2025, according to a European Central Bank (ECB) survey released on Tuesday. The tightening, driven by higher perceived economic risks and lower bank risk tolerance, occurred despite stagnant lending growth throughout 2024. Credit standards tightened across all sectors, particularly in commercial real estate and energy-intensive manufacturing, while mortgage credit standards remained unchanged. The ECB's findings reinforce expectations for additional interest rate cuts as the economy continues to slow. The ECB makes its next policy announcement on Thursday.

European stock indices were mostly higher on Tuesday. The Euro Stoxx 50 edged up 0.2%, and Germany’s DAX increased by 0.7%. However, France’s CAC 40 slipped by 0.1%, while the Swiss Market Index advanced 0.4%.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from Alibaba, ASML, Automatic Data Processing, Danaher, IBM, Lonza, Meta Platforms, Microsoft, QUALCOMM, ServiceNow, Tesla, and T-Mobile US.

Economic data in focus: German GfK Consumer Climate (08:00), Swiss ZEW Indicator of Economic Sentiment (10:00), Bank of England Governor Andrew Bailey speaks (15:15), Bank of Canada interest rate decision (15:45), Federal Reserve interest rate decision (20:00).

LGT helps you make informed investment decisions

Global economic and market trends at a glance

You can also follow us on Facebook or LinkedIn – or visit Insights and discover interesting background articles. If you have questions, a consultant from the bank will be happy to help you.

Imprint
Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.

Contattateci