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By Swissquote Analysts
Published on 16.03.2021
Morning news

Volkswagen to Invest in Six EV Battery Gigafactories in Europe by 2030

Topic of the day

Volkswagen AG said it would invest in six large battery factories and build out charging infrastructure, the latest global auto company hustling to take control of battery making amid an electric-vehicle boom. The world's automotive industry is pivoting to electric vehicles to meet new emission requirements and rushing to establish the vast infrastructure - from battery factories to charging networks - needed to sustain the growing market. Demand for electric vehicles has soared in Europe thanks to generous government incentives for buyers, making it the world's largest market for the battery-powered vehicles. In the U.S., General Motors Co. is building a $2.3 billion battery plant in Ohio with Korea's LG Chem Ltd. and recently said it is exploring building a second plant. Volkswagen, the world's largest car maker, announced a shift in strategy on Monday that would see it take control of battery production and high-speed charging networks in the coming years. The first step is a restructuring of its partnership with Northvolt AB, the Swedish battery startup in which Volkswagen took a 20% stake in 2019. The German auto maker will increase its stake in Northvolt and order an additional $14 billion worth of batteries through 2030 from the company. Northvolt will produce high-end batteries for Volkswagen's premium cars.

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Swiss stocks

The SMI closed 0.3 percent firmer on 10,867 points Monday, buoyed by Roche, as traders noted dwindling liquidity. A slight drop in 10-year US treasury yields boosted stocks, while the suspension of use of the AstraZeneca Covid-19 vaccine in many European countries barely registered. Roche gained 2.1 percent on news of its acquisition of Genmark Diagnostics, giving Roche access to hospital operators. Novartis rose 0.8 percent in Roche’s wake. Sika fell 0.4 percent on news of its takeover of Brazilian Supermassa do Brasil. Travel sector stocks were buoyed Majorca’s removal from many countries’ high-risk list despite rising coronavirus infection figures, with Dufry up 4.7 percent. Among other second-tier stocks, HIAG Immobilien rose 1.9 percent after good 2020 financials and a positive 2021 outlook. Aryzta surged 7.6 percent on announcing figures and the sale of its north American business. Relief Therapeutics climbed 8.30 percent on news of a drug feasibility study.

International markets

Europe

European stocks end in downbeat mode as a lingering feel-good factor from the Biden administration's approval of a $1.9 trillion spending scheme gave way to losses for oil, mining and financial stocks. The Stoxx Europe 600 is flat, the CAC-40 and FTSE 100 fall 0.2% apiece and the DAX drops 0.3%. Meanwhile, concerns about AstraZeneca's coronavirus vaccine also cast a cloud, with shares in the drug-maker paring some of their earlier gains to close 0.4% higher. Danone SA's (+2,9%) Chief Executive and Chairman Emmanuel Faber has stepped down from the yogurt maker after a clash with investors, marking a rare victory for activist funds in France's rigid corporate landscape. Mr. Faber's leadership of the company, which makes Dannon and Activia yogurts, came under scrutiny months ago when activist investors Blue Bell Capital Partners in London and Wisconsin-based investor Artisan Partners called for his ouster, citing the firm's lackluster share price and underperforming dairy and water brands. Another shareholder, Los Angeles-based Causeway Capital Management, called for Danone's management to be held accountable for missing targets.

United States

The Dow Jones Industrial Average inched up 0.5%, adding to its advance after finishing last week at a record. The S&P 500 added 0.7%, erasing earlier declines, and the Nasdaq Composite rose 1.1%. Falling oil prices put pressure on the energy sector. Later this week, investors will parse the Federal Reserve's monetary policy statement for guidance on policy makers' views on the economic outlook. Rogers Communications Inc. agreed to buy Shaw Communications Inc. for about $16 billion, combining two of Canada's largest communications companies and setting up a regulatory battle over a deal aimed at speeding up the country's rollout of fifth-generation wireless service. Consumer advocates argue that the wireless-service business in Canada is already too concentrated among a few companies, and that the tie-up would lead to fewer choices. Rogers and Shaw, in announcing their deal Monday, promised that after merging they would invest C$2.5 billion ($2.0 billion) in 5G networks over the next five years across Western Canada, and invest another C$1 billion ($800 million) to connect rural and indigenous communities to high-speed internet Extended Stay America Inc. on Monday confirmed it agreed to be acquired by Blackstone Group Inc. and Starwood Capital Group in an all-cash deal valued at roughly $6 billion. The Charlotte midprice hotel chain said its shareholders will receive $19.50 a share, a 15% premium to Friday's closing price of $16.94. Shares of the drugmaker Eli Lilly dropped 9.1% in closing trading on Monday after the highly anticipated release of data on the company's experimental Alzheimer's disease drug over the weekend fell short of Wall Street expectations. Analysts said the data, presented at a scientific conference and published in the New England Journal of Medicine on Saturday, was promising, but not as strong as investors had believed they would be.

Asia

Asian markets advanced on Tuesday on continued optimism over U.S. stimulus, which should lead to a stronger U.S. and global recovery and hence more exports for China.

Bonds

Treasury yields continued to retreat from one-year highs on Tuesday as investors geared up for this week's Fed meeting that could see bond traders pitted against the U.S. central bank. The yield on the benchmark 10-year Treasury note was recently at 1.593%, down from Monday's settlement of 1.609%.

Analysis

HSBC rises Eni to Buy (Hold) – Target 12,30 (10,20) EUR
UBS rises the Dt. Telekom target to 22,80 (21,50) EUR – Buy
IR rises the Klöckner target to 9,80 (8,90) EUR – Hold

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