US Consumer Confidence – Update from the Investment Division

What has happened since yesterday ?

Consumer confidence is rising in the USA. A consumer confidence index rose by 12.2 points to 98.1 in June, the biggest monthly gain since 2011 and well above expectations for the index, which stood at 91.5. In our view, this is due to the “reopening” of the economy and the withdrawal of mobility restrictions in June. Important data on employment and industrial production will be released today, and these are also expected to improve.

Italy is working on a new fiscal package worth EUR 20 bn. According to media reports, this package is expected to be passed this month. The Italian budget deficit would rise to 11.6% of GDP. These stimulus packages are designed to mitigate the negative effects of the pandemic crisis, which will only become fully visible in the coming months. These consequences are so-called secondary effects, which we have already reported on several occasions. One example is the restructuring measures in the Airbus Group. The aircraft manufacturer plans to cut 15,000 employees by mid 2021, with the German sites being hit hardest.

The stock markets ended yesterday’s day mixed. The US leading index S&P 500 rose by 1.5%, while the stock markets in Europe were little changed or even suffered losses. Yields on investment grade government bonds rose slightly. Currently, the yield on 10-year government bonds in the USA is 0.68% and that on German government bonds -0.44%. Gold again recorded gains (0.46%).

 

^{Legal note:
Prognoses are no reliable indicator for future performance.}

 

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