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Research Market strategy
by Swissquote Analysts
Morning News

Nissan Names China Executive Makoto Uchida as New CEO

Topic of the day

Nissan Motor Co. said Tuesday that its board has tapped the head of its China business, Makoto Uchida, as the next chief executive. The decision came after a month-long selection process. Some board members had expected the process to last through the month, said people familiar with the board's thinking. Directors had expected to argue over the best person to lead a company troubled by falling sales and profit as well as a tense relationship with partner Renault SA. Hiroto Saikawa resigned as Nissan's chief executive in September and was replaced on an interim basis by Yasuhiro Yamauchi. Mr. Uchida had been considered one of the top candidates because of his experience leading one of Nissan's most important overseas markets, said the people familiar with the board's thinking. Ashwani Gupta, currently chief operating officer of alliance member Mitsubishi Motors Corp. will become chief operating officer, Nissan said. Mr. Gupta is a former Renault executive and has held senior roles at the alliance, including overseeing cooperation on trucks and SUVs.

Swiss stocks

The SMI closed down 1.1 percent on 9,800 points Tuesday with all 20 stocks lower as risk appetite declined before the US-China trade talks start Thursday. While China is attempting to achieve small agreements and not tackle the main problem areas yet, US President Donald Trump is insisting on a major deal. The US also extended sanction list against Chinese companies. Reports also circulated that a Brexit deal was now impossible after a telephone call between UK Prime Minister Boris Johnson and German Chancellor Angela Merkel. Adecco fell 1.7 percent as staffing companies Europe-wide came under pressure after profit warnings from PageGroup and Robert Walters. Novartis fell 1.4 percent despite receiving approval from US health authority FDA for the drug Beovu to treat macular degeneration. Among second-tier stocks, Aryzta slid 5.2 percent after publishing weak financials for 2018/19. Autoneum slumped 10.9 percent after issuing a weak second-half forecast. The CEO is leaving the company.

International markets

Europe

Banks felt the pain as European stocks ended lower, as worries over U.S.-China trade talks continued to weigh on sentiment. The Stoxx Europe 600 slumped 1.1% to 378.71, with banks including Banco Santander and BBVA losing ground. The German DAX skidded 1.05% to 11970.20, the French CAC 40 tumbled 1.18% to 5456.62 and the U.K. FTSE 100 dropped 0.76% to 7143.15. London Stock Exchange Group shares stumbled 6% after Hong Kong Exchanges & Clearing ended its attempts to buy the LSE. It now needs to wait six months if it wants to bid again. The LSE had said it was opposed to the offer. Barclays PLC (BARC.LN) on Tuesday said that it has postponed a decision on closing 105 branches in remote areas of the U.K. until October 2021 as it looks for ways to boost their profitability. The London-listed bank said it will start testing twelve branches--five in Yorkshire and Wales, with more to be announced--to see if customer demand can be increased to make the branches more viable in the longer term before making a final decision. Deutsche Bank AG (DBK.XE) said Tuesday that "a substantial number" of its planned job cuts will take place in Germany. The cuts are part of a deep overhaul the German banking giant presented in July, which includes exiting its global-equities sales and trading business, as well as cutting 18,000 jobs.

United States

U.S. stocks fell intraday after a fresh flare-up in tensions between Washington and Beijing threatened to undermine this week's trade talks. The Dow Jones Industrial Average declined 116 points, or 0.4%, in afternoon trading. The S&P 500 and Nasdaq Composite both fell 0.7%. The latest spat between the world's two largest economies began late Monday when the Commerce Department added 28 Chinese entities to an export blacklist, citing their role in Beijing's repression of Muslim minorities in northwest China. The U.S. said the move wasn't related to trade negotiations with Beijing. Federal Reserve Chairman Jerome Powell said the central bank plans to increase the amount of short-term Treasurys it purchases in order to avoid a repeat of last month's unexpected strains in wholesale funding markets. Boeing booked its first 737 MAX order since April but also reported cancellations for 22 of its 787 Dreamliners, which will leave the embattled aerospace giant seeking more customers for its twin-aisle jets. Domino's Pizza, the chain that helped popularize delivery, is losing sales to newer rivals for that business.

Asia

Mosts Asian markets followed Wall Street lower, although Chinese stocks managed to avoid the worst of the losses. Japanese stocks are were lower, weighed down by electronics and financials as investors look for any progress in the U.S.-China trade negotiations as talks get under way under a cloud cast by the U.S.'s expansion of its Chinese entities blacklist

Bonds

U.S. government-bond prices rose after signs of worsening trade tensions between the U.S. and China. The yield on the benchmark 10-year Treasury note was a recent 1.531%, according to Tradeweb, from 1.553% Monday. Yields fall when bond prices rise.

Analysis

CS lowers the Shell target to 3.000 (3.010) p – Outperform
UBS rises the LVMH target to 450 (444) EUR – Buy
UBS rises the Kering target to 554 (550) EUR – Buy


Produced by MBI Martin Brückner Infosource GmbH & Co. KG on behalf of Swissquote. All news is acquired with journalistic accuracy. No liability is assumed for delays or errors.

 
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