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Research Market strategy
by Swissquote Analysts
Morning News

Airbus to Increase Production at Alabama Plant

Topic of the day

Airbus said Thursday that it will expand its industrial output in the U.S. as it is looking to produce 63 A320 Family jets per month in 2021. The European plane maker will increase its production rate to seven A320 Family jets a month by the start of next year at its manufacturing site in Mobile, Ala., it said. The production rise should contribute to 300 new hiring at the plant next year, Airbus added. "The company will also invest another $40 million through construction of an additional support hangar on the site, bringing its total investment to more than $1 billion in the Gulf Coast city," the plane maker said. The decision comes in the middle of the customs dispute between the USA and the European Union. The reason is illegal state aid for the two aircraft manufacturers Airbus and Boeing. In addition, the Airbus rival Boeing is currently in a serious crisis.

Swiss stocks

The SMI closed virtually unchanged on 10,651 points Thursday. While international capital markets were buoyed by hopes of easing in the Middle East crisis and the planned signing of the first partial US-China trade agreement next week, investors in Switzerland were sceptical, further deterred by a strong Swiss franc. Sika fell 3.4 percent on ill-received financials. Analysts noted organic growth was below expectations, but that this was an opportunity to buy. Zurich Insurance shrank 0.4 percent and analysts lowered their target after German politicians said the German government should demand repayment of the financial aid given to customers of insolvent Thomas Cook, some of whom Zurich had insured. Among second-tier stocks, AMS climbed 2.2 percent. Schmolz + Bickenbach crashed 9.4 percent on implementing its 2 billion-stock capital increase. Newron surged 2.3 percent after a new study. The SwissNational Bank rose 0.7 percent on news it expects to post a CHF 49 billion profit in 2019.

International markets

Europe

European shares rose on market relief at the easing of U.S.-Iran trade tensions and lower oil prices, boosting airline stocks. The Stoxx Europe 600 and FTSE 100 gained 0.3%, the CAC-40 advanced 0.2% and the German DAX was up 1.3% after better-than-expected industrial production data. European airlines Deutsche Lufthansa, Air France-KLM, Ryanair and IAG got a lift as the price of a barrel of Brent crude dropped 0.3% to $65.25. "Stock markets are on the rise as we head into the climax of the week, with Donald Trump's comments soothing market fears over a potential ramp-up in US-Iran military action," an analyst said. Natural catastrophes caused total economic damage of $150B last year and cost the insurance industry $52B, reinsurer Munich Re says. The proportion of total losses covered by insurance was lower than usual due to flood damage, which is typically less insured than wind damage, Munich Re says. Typhoons Hagibis and Faxai in Japan caused $10B and $7B of insured losses, respectively. Hurricane Dorian cost $4B in insured losses. Cyclone Idai in Mozambique caused economic losses of $2.3B but almost none of it was insured, Munich Re says.

United States

The Dow Jones Industrial Average rose nearly 200 points intraday, pushing the blue-chip index closer to 29000, as signs of geopolitical calm pulled investors back into highflying stocks. The Dow and other major indexes opened higher, on pace to notch record closes, after China said its top trade negotiator, Vice Premier Liu He, will travel to Washington next week to sign a phase-one accord. Investors also took comfort in signs that the U.S. and Iran seem to be backing away from a near-term conflict after President Trump said no new U.S. military strikes would follow an Iranian missile barrage on Iraqi bases. President Trump gave the Dow industrials an additional boost after saying he didn't believe a Boeing passenger jet crash in Iran was due to a mechanical malfunction, sending shares of the airplane maker higher. The Dow Jones Industrial Average rose 195 points, or 0.7%, to 28936 in recent trading. The blue chips pared their advance from earlier in the session when they made a run at 29000, which would mark a new milestone. The S&P 500 added 0.6%. The Nasdaq Composite also rose, gaining 0.9%. All three indexes were on track to close at new highs.

Asia

Asian shares rose as worries receded the U.S. and Iran might be stepping closer to the edge of war, and U.S. indexes hit records. "Risk appetite continues to improve as investors judged the U.S.-Iran tensions to not be as concerning as thought while focusing on the upcoming leads including U.S.-China trade and a potential payrolls surprise into the end of week," said a market strategist in Singapore.

Bonds

U.S. government-bond prices rebounded from early declines intraday after a strong 30-year bond auction underscored investors' continued appetite for longer-term debt. In recent trading, the yield on the benchmark 10-year U.S. Treasury note was 1.856%, according to Tradeweb, compared 1.874% Wednesday.

Analysis

BoA downgrades ASML to Neutral (Buy)
BoA upgrades Goldman Sachs to Buy (Neutral)
MS raises Vodafone target to 215 (210) p - Overweight
Coba upgrades Morphosys to Buy (Hold)/Target 160 (97) EUR


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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