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By Swissquote Analysts
Published on 01.04.2021
Morning news

J&J Says Covid-19 Vaccine Ingredient Batch Didn't Meet Quality Standards

Topic of the day

Johnson & Johnson said one batch of the main ingredient for its new Covid-19 vaccine didn't meet quality standards at a contract manufacturer, and the doses weren't distributed. J&J said it detected the problem while making quality checks at a plant belonging to contract manufacturer Emergent BioSolutions Inc., which was in the process of starting up but hadn't finished making doses. J&J has been making the main ingredient in vaccine doses for the U.S. at one of the company's own plants. The quality lapse didn't affect those doses, which have been given to people in the U.S. And though it scrapped the problematic batch, J&J said it would be able to make enough doses to meet production targets for the U.S. in the coming months. The New Brunswick, N.J.-based company said it shared information about the issue with the U.S. Food and Drug Administration. The FDA is investigating, according to a separate person familiar with the matter.

Swiss stocks

The SMI closed 0.7 percent softer on 11,047 points Wednesday as traders pointed to end-of-quarter profit-taking and investor withdrawal before the Easter holiday. Credit Suisse (CS) continued its decline Wednesday, falling 4.9 percent amid ongoing uncertainty about the payment default of US hedge fund Archegos. S&P Global Ratings revised its outlook for CS down to "negative" from "stable” but is still convinced the bank can manage any financial losses. Competitor UBS slid 0.4 percent. Luxury good stocks Swatch fell 2.2 percent and Richemont 2.0 percent. Traders pointed to profit-taking. Givaudan was the top gainer, rising 0.7 percent. Index heavyweight Nestle slid 0.6 percent. Asset manager Partners Group fell 1.1 percent after selling its share in US-based digital service provider Globallogic to Hitachi. Second-tier Julius Baer slid 1.4 percent on the news the Swiss financial watchdog Finma had officially lifted the ban on conducting company acquisitions imposed in February 2020.

International markets

Europe

European markets close mostly lower as losses for oil, mining and financial stocks offset gains for tech and utility shares. The Stoxx Europe 600 drops 0.2%, the FTSE 100 is off 0.9%, the CAC-40 retreats 0.3% and the DAX is flat. Still, the price of a barrel of Brent crude gains 0.2% to $64.31 and the gold price increases 1.3% to $1,708.4, boosting precious-metal miners such as Fresnillo and Polymetal International. Shares in French biopharmaceutical group Ipsen rose on Wednesday after the company said the European Commission has given the green light to the company's drug Cabometyx in combination with Bristol Myers Squibb Co.'s Opdivo for the treatment of renal cell carcinoma, a type of kidney cancer. The company said the EU approval is based on results from a phase-3 trial named CheckMate-9ER, whose primary endpoint was the median progression-free survival in patients receiving the drug combination. Hennes & Mauritz AB's Chief Executive Helena Helmersson said on a call following the company's first-quarter earnings that around 20 stores in China had been forced to close amid the backlash from its decision to stop sourcing products from Xinjiang on ethical grounds. The company was thrust into the spotlight last week after Chinese state media criticized H&M's decision, creating a consumer backlash that saw H&M wiped off China's leading e-commerce, ride-hailing, daily-deals and map applications. H&M had 502 stores in the country as of the Feb. 28 Feb 2021.

United States

U.S. stocks lost some momentum ahead of Wednesday's closing bell as investors closed the books on a quarter marked by both optimism about an economic recovery and drama in an equities market that has been red hot. A late bout of selling pushed the Dow Jones Industrial Average into the red for the day, down 85.41 points, or 0.3%, to 32981.55. The S&P 500 rose 14.34 points, or 0.4%, to 3972.89 but pared earlier gains and just missed out on setting a record. The Nasdaq Composite jumped 201.48 points, or 1.5%, to 13246.87. For the quarter, the Dow finished up 7.8%, while the S&P 500 gained 5.8% and the Nasdaq added 2.8%. The Nasdaq, up only 1.2% for the quarter heading into Wednesday's session, gained more on the last day of the period than it had for the previous three months as the tech sector continued its recent bout of volatility. Walgreens Boots Alliance Inc. says money made from administering Covid-19 vaccines should begin to offset pandemic-related losses as more people get shots and the U.S. government pays a higher reimbursement rate. The company said Wednesday it has administered more than eight million vaccines to date, including four million in March. Executives now expect the company to administer 26 million to 34 million shots during its fiscal year, which ends Aug. 31. The higher number in part led the company to lift its profit forecast. Covid so far has hurt Walgreens more than it has helped, the company said. ConocoPhillips said it expects to report 1.47 to 1.49 million barrels of oil equivalent per day for the first quarter and 1.5 million barrels of oil equivalent per day for the year. The first-quarter estimate includes about 50 thousand barrels of oil equivalent per day of unplanned weather effects due to Winter Storm Uri, the crude-oil producer said Wednesday. Total average realized prices could be between $43 and $45 a barrel of oil equivalent for the quarter, the company said.

Asia

On Thursday, the Asian stock exchanges showed a positive price picture in late trading – after the weakest quarter in a year. In Tokyo, a positive Tankan report from the Japanese central bank provides some support. This reveals the economic recovery from the pandemic-related crisis. Labour is already becoming scarce again in certain sectors. However, large-scale industry is doing much better than expected.

Bonds

Yields on 10-year U.S. government bonds eased back slightly in Asia from Wednesday's 1.748% settlement. Wednesday turned out to be a quiet session for bonds, ending a turbulent three months that has seen the 10-year Treasury note record its worst quarter since 2016. Rising inflation in the eurozone and higher government bond yields in the U.S. raise the question of how long German Bund yields will hold at current levels, and Metzler sees a risk that they could rise further, albeit likely only in the short term.

Analysis

UBS lowers BHP to Neutral (Buy) – Target 2.000 (2.200) p
IR lowers UBS to Hold (Buy) – Target 15 (14,50) CHF
BoA rises the Ryanair target to 19 (17,50) EUR – Buy

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