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By Swissquote Analysts
Published on 05.02.2021
Morning news

Deutsche Bank Posts Surprise Profit as Revenue Grows

Topic of the day

Deutsche Bank AG posted an unexpected profit in the fourth quarter with revenue also up. Net profit for the quarter was 51 million euros ($61.4 million) compared with a loss of EUR1.60 billion a year earlier, the German bank said Thursday. The after-tax profit was EUR189 million. Revenue rose 2% to EUR5.45 billion in the quarter. Analysts had expected a quarterly after-tax loss of EUR168 million on revenue of EUR5.47 billion. For the whole year, revenue was up 4%, the first increase after falling for four consecutive years. After-tax profit was EUR624 million. “With profit before tax of a billion euros, we’re ahead of our own expectations,” Chief Executive Christian Sewing said. “We have built firm foundations for sustainable profitability, and are confident that this overall positive trend will continue in 2021, despite these challenging times.”

Swiss stocks

After a slight hiccup Wednesday, the SMI rebounded 0.8 percent to 10,861 points Thursday. Caution reigned amid sluggish vaccination campaigns, high coronavirus infections numbers and uncertainty about Friday’s US labour market report for January, though last week’s US first-time jobless applications were lower than expected. The reporting season was the main market mover, with ABB, Swisscom and Roche all releasing Q4 figures. ABB slid 5 percent on posting a Q4 loss because of long-term improvement measures, despite a slight turnover increase and higher operating EBITDA. Roche rose 2.2 percent on a higher dividend, a slight rise in net profit, pandemic-driven mixed divisional fortunes, and a conservative outlook. Swisscom rose slightly on solid financials, including a 3.6 percent higher 4Q EBITDA, plus a dividend announcement and 2021 outlook within analyst expectations. Steep yield curves buoyed financial stocks. CS Group climbed 2.0 percent, UBS 0.6 percent and Swiss Re 1.6 percent.

International markets


European stocks close mostly higher on optimism about a US economic-stimulus package and a vaccination-driven economic recovery. The Stoxx Europe 600 gains 0.6% and the DAX and CAC-40 rise 0.9% and 0.8% respectively. Still, the FTSE 100 edges 0.06% lower as sterling rises after traders interpreted Bank of England comments as implying U.K. interest rates are unlikely to turn negative in the short term. Dassault Systemes's results for the fourth quarter on a non-IFRS basis came in better than expected, with operating profit and revenue exceeding expectations, J.P. Morgan Cazenove says. "Overall, a solid set of 4Q results, showing sequential improvement although still impacted by Covid-19," J.P. Morgan Cazenove says. The French software maker's 4Q operating profit of EUR438.5 million was ahead of JPM Cazenove's forecast of EUR422.1 million, with revenue of EUR1.22 billion also ahead of the brokerage's projection of EUR1.21 billion. "The company demonstrated agility in reacting on the cost side in order to maintain its profitability while maintaining people resources and investing in R&D and data science initiatives to drive future growth," it says. International oil companies are reporting one of their worst annual performances in decades after Covid-19 sapped demand for oil, hitting prices. In response, energy companies have slashed spending, cut jobs and written down the value of their assets. Shell on Thursday reported a fourth-quarter loss on a net current-cost-of-supplies basis—a figure similar to the net income that U.S. oil companies report—of $4.5 billion, down from a profit of $871 million in the same period the previous year.

United States

U.S. stocks closed higher after fresh data showed the number of people seeking unemployment benefits declined from the previous week but remained elevated. The S&P 500 ticked up 1.1%, extending its winning streak to four sessions. The Dow Jones Industrial Average also rose 1.1%. The Nasdaq Composite climbed 1.2%, driven by a rise in technology stocks. Investors are watching for signs that the economic recovery remains under way despite a high number of Covid-19 cases and new variants that existing inoculations may be less effective against. A handful of stocks that grew popular on online forums and posted big swings in recent days have also calmed. Meanwhile, vaccine rollouts are ramping up in the U.S., offering hope that there may be a sharp rebound later in the year. EBay Inc. shares rose nearly 10% in after-hours trading Wednesday after the online marketplace provider's results beat expectations as revenue rose along with gross merchandise volume during the quarter that included the holidays. The San Jose, Calif.-based company reported fourth-quarter net income of $781 million, or $1.12 a share, compared with $535 million, or 66 cents a share, in the year-ago period. Adjusted earnings were 86 cents a share, adjusted for depreciation and amortization, stock-based compensation, deferred income taxes and more. Revenue rose to $2.9 billion from $2.3 billion in the year-ago quarter.. Qualcomm Inc. parlayed the global 5G rollout and Apple Inc.'s inclusion of its chips in the latest iPhone models into an earnings jump that failed to satisfy investors betting phone-chip sales would be even higher. The mobile-phone chip maker on Wednesday said its quarterly sales rose 62% from the year-ago period to $8.24 billion. Net income for the first quarter of the company's financial year more than doubled to $2.46 billion.


After the upward movement interrupted by profit-taking the previous day, the indices on the stock exchanges in East Asia are already moving upwards again on Friday. Support is coming from firm fundamentals and new records on Wall Street - triggered by the ongoing expectation of a major government stimulus programme and vaccination confidence. Other places such as Seoul, Shanghai and Hong Kong are up by up to around 0.4 per cent.


Treasury yields have eased back slightly despite fresh hopes of a global economic recovery spurring demand for riskier assets. The 10-year yield closed at an 11-month high on Thursday after jobless claims dropped, along with coronavirus cases.


Citi lowers the von Delivery Hero target to 151 (158) EUR
HSBC rises the LVMH target to 605 (570) EUR – Buy
JPM rises the Daimler target to 75 (69) EUR – Overweight

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