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Research Market strategy
by Swissquote Analysts
Morning News

Ford to Expand Michigan Factory for Electric F-150

Topic of the day

Ford Motor Co. is expanding its largest and oldest factory to make electric pickup trucks, a high-profile manufacturing investment in a key battleground state where jobs remain a focus on the campaign trail. Ford will spend about $700 million to expand its River Rouge plant, adding 300 jobs at the sprawling, century-old complex a few miles from the company's Dearborn, Mich., headquarters, the company said Thursday. By mid-2022, Ford will begin making battery-powered versions of the F-150 pickup, its flagship vehicle and major source of its bottom line. During an event at the factory Thursday, Ford's top executives underscored the company's commitment to American manufacturing. The message comes a week after President Trump and Democratic presidential nominee Joe Biden touted their jobs records during dueling campaign stops in Michigan. "We can't have a strong economy, or a strong democracy, without a strong manufacturing base," Ford Executive Chairman Bill Ford said. "This is not and should not be a political issue. But it does have to be a national mission." Kumar Galhotra, Ford's president of the Americas and international markets, said having a heavier U.S. factory presence in the U.S., rather than Mexico, where labor is cheaper, results in a substantial profitability gap with rivals. He wouldn't quantify the disparity. The electric F-150 will be more powerful and accelerate faster than its gas-powered trucks, and be as much as 40% less costly to maintain, company executives said.


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Swiss stocks

After the gains of the previous days, the SMI closed down 0.3 percent on 10,519 points Thursday. Market participants pointed to disappointment that the US Federal Reserve’s Wednesday had not done more to boost the economy, but plans to leave leading interest rates at zero for some time yet. Since low interest rates make it difficult for financial companies to generate profits, banks and insurers were among the losers. Swiss Re fell 1.3 percent, Zurich Insurance 1.1 percent, Credit Suisse 0.9 percent and UBS 1.0 percent. Luxury goods stock Richemont slumped 1.3 percent. Competitor Swatch fell just 0.2 percent, buoyed by an analyst’s target increase and an “outperform” rating. Chemical and pharmaceutical companies fared best. Alcon gained 1.9 percent. Sika 1.1 percent after analysts began following the stockwith a “buy” rating and price target of CHF 287. Novartis closed virtually unchanged despite news that Biontech has acquired a production plant from Novartis to boost its capacity.

International markets

Europe

European stocks fall as investors continue to process the Federal Reserve policy decision Wednesday when it signaled interest rates would stay near zero until 2023 and said the economic outlook is highly uncertain. The Stoxx Europe 600 and FTSE 100 decline 0.5%, the DAX drops 0.4% and the CAC-40 sheds 0.7%. The Bank of England's remarks about considering negative interest rates in its policy statement Thursday did "little to boost sentiment," after the Fed "failed to allude to further easing," IG says. Unibail-Rodamco-Westfield is Europe's worst performer with shares down 10% after the shopping mall operator announced a EUR3.5B capital raise and other measures to strengthen its balance sheet and reduce debt. The plan also includes the sale of assets worth EUR4 billion and a cut in capital expenditure. Delivery Hero is expanding its global footprint after acquiring food delivery startup Glovo's operations in eight countries in Latin America. Shares rose 2.2%.

United States

US stocks fall, breaking a four-day winning streak for the Dow, as the biggest tech companies stumble and comments from Fed Chairman Powell saying the economic outlook is highly uncertain stoked worries. Initial jobless-benefit filings are largely unchanged at 860,000. Housing starts fall 5.1% for August, according to the Census Bureau. The head of the CDC said a Covid-19 vaccine may not be widely available until next summer, but President Trump quickly disputed that. The Dow declines 0.5% to 27901, the S&P 500 falls 0.8% to 3357. The Nasdaq Composite fell around 1.3%, pushing the tech-heavy index further into negative territory for the month. The Dow Jones Industrial Average, which rose Wednesday, dropped 0.5%, or 131 points. Dave & Buster’s shares plunged 26.4% in Thursday trading after investors grew nervous about the possibility of the entertainment company filing for bankruptcy. Dave & Buster’s included "going concern" language in a 10-Q filing dated September 10. Between March 14 and March 20, all 137 Dave & Buster’s locations were closed due to the coronavirus pandemic.

Asia

Japanese stocks were up slightly as gains in auto stocks helped offset losses in financial shares. Few big-cap stocks were rising or falling more than 3%, reflecting uncertainty over the pace of recovery from the coronavirus pandemic. Investors were focusing on any economic programs to be introduced by the new government led by Prime Minister Yoshihide Suga. The Nikkei Stock Average was up 0.3% at 23384.27 in early trade.

Bonds

U.S. Treasury yields fell Thursday after the Federal Reserve underlined its commitment to keeping interest rates near zero for the next few years and after a round of lackluster economic data. The 10-year Treasury note yield fell 0.4 basis point to 0.682%, while the 2-year note rate edged 0.4 basis point down to 0.133%. The 30-year bond yield slipped 1.9 basis points to 1.428%.

Analysis

Bryan Garnier raises AMS target to 15 (14) CHF - Sell
Dt. Bank: Compugroup winner of the digitalisation wave - Buy
Dt Bank: Alstom agreement with Bombardier unfavorable - Hold
Equita: Essilor collaboration with Facebook positive - 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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