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Research Market strategy
by Swissquote Analysts
Morning News

Airbus reports loss after corruption settlement

Topic of the day

Airbus said Thursday that it swung to a loss in 2019 and set new targets for 2020. Airbus (AIR.FR) said its full-year net loss was 1.36 billion euros ($1.48 billion) compared with a net profit of EUR3.05 billion in 2018. The company was hit by EUR3.6 billion in penalties related to a corruption probe settlement. The loss included "a negative impact from the financial result, mainly driven by the revaluation of financial instruments," Airbus said. Sales rose 11% at EUR70.48 billion. Airbus's more closely watched adjusted earnings before interest and taxes rose 19% to EUR6.95 billion from EUR5.84 billion. For its fourth quarter, adjusted EBIT came in at EUR2.81 billion. The Toulouse, France-based company said deliveries would rise again in 2020, with a guidance of roughly 880 planes handed over this year after delivering 863 in 2019. Airbus overtook Boeing Co(BA) last year as the world's largest aircraft manufacturer.

Swiss stocks

The SMI closed only 3 points higher on 11,092 points Thursday, recouping earlier losses as Wall Street recovered. The number of people infected with the coronavirus in China’s Hubei Province surged as China used a new diagnosis method, firing fears that Peking had downplayed the extent and speed of the infection. Heavyweight Nestle pulled down the SMI, falling 2.2 percent after releasing figures traders described as mixed, with turnover below, but profit above expectations. Credit Suisse gained 0.2 percent on releasing figures, with fiscal 2019 slightly better than expected, and a cautiously optimistic 2020 outlook. UBS slid 0.4 percent. Zurich Insurance rose 1.8 percent after releasing 2019 figures. Traders said it had exceeded all its own targets, with operating profit up 16 percent. Roche gained 1.7 percent. Since the start of the year, Roche has risen 9 percent, the SMI only 4 percent. Outside the SMI, Clariant surged 4 percent on releasing financials that exceeded expectations

International markets

Europe

The Stoxx Europe 600 retreated less than 0.1% as European stocks were muted as renewed worries about the spread of coronavirus weighed on investor sentiment. The Stoxx Europe 600 and DAX were broadly flat while the FTSE 100 declined 1.1% and the CAC-50 shed 0.2%. Orange (+3,3%) said Thursday that 2019 net profit soared, while it confirmed its objectives for 2020. Net profit in 2019 rose more than 50% to 3.01 billion euros ($3.28 billion), the French telecommunication company said. Revenue came in at EUR42.24 billion from EUR41.99 billion a year earlier on a comparable basis, Orange said. Revenue in the fourth quarter was EUR11.09 billion. Capgemini SE (CAP.FR) (-3,4%) on Thursday reported a rise in net profit for 2019 on growing revenue across all regions, beating its revenue guidance. The French consulting and technology group reported a net profit of 856 million euros ($933 million) for the year ended Dec. 31, 2019, compared with EUR730 million in 2018.

United States

A rally in U.S. stocks paused intraday after a spike in the number of new coronavirus cases in the Chinese province at the epicenter of a global outbreak. The Dow Jones Industrial Average lost 39 points, or 0.1%, to 29512, retreating from a record set the prior day. The S&P 500 added 0.1% and the Nasdaq Composite added 0.2%. Chinese officials reported the number of newly confirmed infections in Hubei jumped nearly 10-fold overnight, raising the prospect of a longer period of economic disruption in China than investors previously anticipated and weighing on markets that had climbed for much of the past two weeks. The number of newly confirmed infections in the province jumped to 14,840 on Wednesday, from 1,638 a day earlier, after the provincial health commission started to count clinically diagnosed cases, on top of people with a positive laboratory test. Cisco Systems Inc.'s stock slid 4.5% in premarket trade Thursday, after the company reported second-quarter profits and revenue that slightly edged Wall Street's estimates but offered weak guidance. The computer-networking giant said it racked up net income of $2.9 billion, or 68 cents per share, compared with expectations of $3.2 billion, or 66 cents per share, based on analysts polled by FactSet. Tesla Inc. (+4,8%) is seeking to raise more than $2 billion from a stock sale, as the electric-car maker returns to capital markets amid a rally in its share price.

Asia

In Asia, most markets were higher, with the Nikkei being an exception as poor company earnings weighed on the Japanese index. Iran's crude-oil sales have been battered by a sudden downturn in demand from its last big trading partner, China, following the deadly coronavirus outbreak, U.S. and Iranian officials said, a blow that lands as the Islamic Republic faces the risk of an economic collapse.

Bonds

The U.S. Treasury Department sold 30-year bonds at a record low yield intraday, highlighting investors' demand for longer-term debt and its benefits to the government. Following up on a $27 billion auction of 10-year notes on Wednesday, the Treasury sold $19 billion of 30-year bonds on Thursday afternoon at a 2.061% yield. That beat the previous record of 2.170% set last October, according to data from BMO Capital Markets.

Analysis

UBS rises the Delivery Hero target to 95 (76) EUR – Buy
UBS lowers Logitech to Sell (Neutral) – Target 37 CHF
IR rises the Unicredit target to 15,50 (14) EUR – Hold


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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