LGT Private Banking Europe House View

The US economy grew at a much faster pace than expected in the second quarter of the year, data released on Thursday showed. European stock markets were down across the board and the rotation out of US tech stocks continued. Meanwhile, Asian equity markets were mostly bouncing back on Friday.

Equity markets were down across globe on Tuesday after results at two of the world’s largest tech stocks - Alphabet and Tesla - caused concerns that artificial intelligence isn’t yet sufficiently driving company earnings. US business activity ticked up so far in July, but in Europe, preliminary...

Google parent Alphabet beat profit estimates overnight while Tesla missed analysts’ expectations, leaving investors unsure how to interpret the ongoing earnings season and the AI-driven narrative that has dominated this year’s market rally. Tech stocks lost ground, while small-cap stocks shot...

To start the week, markets largely shrugged off the US election surprise from the weekend and instead took positions ahead of upcoming tech stock earnings. Software and chipmaking stocks shot up on Monday, as did small-cap stocks in New York. Sentiment on European equity markets was likewise...

US President Joe Biden quit the race for reelection at the weekend and endorsed Vice President Kamala Harris. The move came after polling data showed for weeks it would be extremely difficult for Biden to succeed in November’s election. Many Democrats came out on Sunday to immediately back Harris.

The European Central Bank (ECB) left interest rates unchanged, a move in line with market expectations, but left the option open for another cut at its next meeting in September. In US politics, Donald Trump officially accepted the nomination as the presidential candidate for the Republican...

The British pound shot up against the US dollar after data released on Wednesday showed the UK inflation rate froze in place in June. In the euro area, inflation fell slightly, but that wasn’t enough to save European equity markets, which were mostly down midweek. On Wall Street, the rotation...

Following weeks marked by relentless all-time highs by tech stocks, the tides appear to have turned, at least for the first days of the second-quarter earnings season. On Tuesday, the Dow Jones Industrial surged to another all-time high, while the small-cap Russell 2000 also spiked. The...

Switzerland’s Producer and Import Price Index remained unchanged in June when compared to the previous month. The index is watched for clues about the future of Swiss consumer prices, which are the basis for the Swiss National Bank’s (SNB) monetary policy decisions. Stocks in Europe were down...

A series of economic data released Monday suggested the Chinese consumer is still struggling to support economic growth, causing some market participants to to call for Beijing to introduce further stimulus measures. In the US, former president Donald Trump survived an assassination attempt at...

With the overall picture remaining constructive, we maintain our "Overweight" in equities and "Underweight" in fixed income. Fundamentally, stronger electricity demand growth, low valuations and the prospect of an interest rate turnaround offer attractive entry points in the utilities sector...

The solid but slowing growth environment should continue for the time being, albeit with regional differences, and the risk of recession seems to have been pushed further out. The equity market offers a more attractive risk/reward profile than the credit market, with the US stock market in...

Geopolitical tensions, robust US growth, rising oil prices and stubborn inflation are pushing equity and bond markets into negative territory for 2024. We are temporarily downgrading US equities to "Underweight" and reducing our preference for ILS investments to "Underweight".

The current economic and financial market environment is highly uncertain, with ge­opolitics, central banks and elections all making the next few months difficult to navigate. In this House View’s main article, we take a break from the day-to-day market environment and instead focus on our...

In this month's House View, we review some of our "Outlook 2024" forecasts and take a look at the latest developments in the financial markets. In our Macro article, we discuss the challenges faced by the manufacturing sector in recent years, highlight the factors behind this development and...

Major asset classes have started the new year on diverging paths without pricing in a uniform macroeconomic environment for 2024. To hedge against the risk of a hard landing, we would prefer government bonds with longer maturities. Overall, we consider the opportunities and risks to be balanced...

Global growth rolls into 2024 in a sluggish pace, leaving the burden of driving market optimism to disinflation and hopes for "sooner" and "sharper" interest rate cuts. While the probability of our current "high for longer" base case has indeed receded, we still think it will take a prolonged...

The Fed and the ECB will have to maintain their tight monetary regimes for longer. In the absence of an unexpected recessionary dynamic, decisive central bank rate cuts are therefore unlikely in the first half of 2024. Following the sharp rise in government bonds, we have decided to reduce our...

As we get closer to turning points, both on the economic growth and on the monetary policy sides, uncertainty reaches its peak. Geopolitics have come on top of this already uncertain environment, compounding a challenging combination of high bond yields and slowing economic growth. Higher...

Like the two characters waiting for Godot in Samuel Beckett’s play, many market participants have been waiting for a recession in the United States, which may never come. Many experts assumed that US economic growth would be much weaker this year than it has been so far. And most of them have...

The first 2024 presidential debate between Joe Biden and Donald Trump marked a critical juncture for Biden’s re-election campaign. Biden’s performance during the debate was notably poor; he appeared hesitant, his speech was sometimes unclear, and his responses did not alleviate concerns...

The reporting season for the second quarter is always one of the most exciting of the year. In the first quarter, it is often still too early for companies to make any adjustments to their full-year outlook. With the second quarter, however, the question arises as to whether expectations...

The dollar-yen exchange rate is primarily influenced by the cost-of-carry issue, which hinges on the key policy rate decisions of the Fed and the Bank of Japan (BOJ). If the Fed starts to ease or the BOJ normalises interest rates, diminishing yield differentials would prompt a reversal in the...

With the first presidential debate between US President Joe Biden and former President Donald Trump now behind us, it is an opportune time to look at the key campaign promises and the decisive factors for the US election outcome. The debate as such did not reveal new policy directions, but it...

Prime Minister Rishi Sunak's decision to bring forward the general election to 4 July was unexpected, yet it has caused little market reaction. Labour is widely accepted to win the upcoming election, with expectations for policies promoting a pro-business and pro-worker environment, emphasising...

The French president’s decision to call early parliamentary elections has sent shock waves through Europe and rattled financial markets. France’s national debt has been a headache for the country and the European Union for some time. The prospect of France’s far-right or a left-wing coalition -...

Tariffs on Chinese goods are surging, signaling a revival of industrial protectionism. Recent US and European measures aim to shield domestic industries, hinting at prolonged trade tensions.

Since the Paris Climate Agreement, countries have failed to take the necessary measures to limit global warming to +1.5°C. Only during the economic state of emergency caused by the Covid pandemic or in the context of economic contractions, such as recently in Germany, have Western countries...

Last year, many experts predicted a recession for the US economy due to a rapid increase in the key interest rate from zero to 5%. This hike was expected to slow down investments and demand, pushing GDP growth into negative territory. Surprisingly, the economy has continued to grow and the odds...

From its inception in 2001, the BRIC acronym - representing Brazil, Russia, India, and China - showcased the rising economic and political influence of major emerging markets. Coined by Jim O’Neill, this term emphasised the potential of these nations to reshape global policy, a notion further...