Research Market strategy
By Swissquote Analysts
Published on 28.04.2021
Morning news

Microsoft shares fall after hours, despite topping earnings forecasts

Topic of the day

In after-hours trading, Microsoft shares fell after topping Wall Street's profit forecasts, shedding more than 3%. Alphabet's report was better received by investors after it broke sales records for the first quarter, sending shares up nearly 4% post-trading. Microsoft has largely exceeded the expectations of Wall Street Tuesday, earning a profit of more than 15 billion dollars in the third quarter, while the demand for products and services of the software giant in particular in the cloud and video games remains very strong in the context of the pandemic of coronavirus. The share of the Redmond firm was however down 3.5% in electronic trading after the close of the New York Stock Exchange after having set records in the last three sessions. The stock had ended up 0.2%, at a new high of $ 261.97. The California-based company reported Tuesday net income of $15.46 billion, or $2.03 per share, for the three months ended December, up from $1.40 per share a year earlier. Excluding extraordinary items, including a $620 million tax gain, earnings came to $1.95 per share. Revenues reached 41.7 billion dollars, compared to 33.1 billion dollars a year earlier, thanks to a 50% jump in revenues from the Azure cloud computing division. Analysts on average were expecting net income of $1.78 per share and revenue of $41.04 billion, according to FactSet.

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Swiss stocks

The recent downward trend on the Swiss stock market continued on Tuesday. The SMI lost 0.6 percent to 11,092 points. Among the 20 SMI stocks, twelve price losers and seven winners faced each other, unchanged closed one share. A total of 54.55 million shares were traded (previously: 43.29 million). Among individual stocks, the focus was on shares of companies that had presented quarterly figures. Here, UBS (-2.0%) performed better than expected in the first quarter. The bank benefited from higher revenues and lower credit risks. Citigroup spoke of the strongest quarter since 2007. However, the default of the U.S. hedge fund Archegos reduced profits. This weighed on the share price, it said. A slightly more optimistic outlook from ABB pushed the stock up 0.9 percent. Novartis' (-1.6%) first-quarter numbers were slightly below expectations. Sales of $12.41 billion didn't quite meet the consensus estimate of $12.44 billion, according to Morgan Stanley. Adjusted operating income also came in slightly below the forecast of $4.05 billion at $3.96 billion.

International markets


The European stock markets continued to show little momentum. The DAX fell slightly on Tuesday by 0.3 percent to 15,249 points and thus remained in the narrow range of recent days between about 15,200 and about 15,300 points. The Euro-Stoxx-50 slipped 0.2 percent to 4,012 points, with turnover also low. BMW lost 0.7 percent and VW 0.5 percent. Supply bottlenecks for semiconductors are increasingly jeopardizing the groups' overall production plans. Among suppliers, Hella was an exception: the share price shot up by almost 13 percent. As reported by Manager Magazin with reference to people involved in the project, the investment bank Rothschild has approached possible buyers from the industry as well as financial investors on behalf of the Hueck family and asked for offers. The figures of the British-Asian bank HSBC were a positive surprise. Adjusted profit was 39 percent above the Jefferies estimate. It even beat the consensus forecast by 49 percent, analysts noted. After a hesitant start, London was up sharply by 4.2 percent. The Stoxx Banks benefited with a gain of 1.4 percent. EDF was up 5.4 percent on the Paris stock exchange. The background to this were media reports according to which the French government and the EU are close to an agreement with regard to the planned restructuring of the utility group. Michelin also fell by 1.6 percent. Citigroup said sales were slightly weaker, but the headwind from the currency side was less strong. Sales and outlook of Schneider Electric were again well received, the share price of the industrial group rose by 0.7 percent.

United States

Little changed Wall Street has ended trading on Tuesday. With the start of the two-day U.S. Federal Reserve meeting, the listless trading of the previous day continued, it was said. The Dow Jones index gained three points to 33,985, but the S&P 500 fell one point to 4,187. The Nasdaq composite fell 0.3 percent to 14,090 points. On 1,647 (Monday: 2,074) price gainers on the Nyse were 1,675 (1,230) - losers. Unchanged 102 (158) shares went out of the trade. Tesla achieved a record profit in the first quarter, but fell just short of expectations in terms of sales. The share price fell by 4.5 percent. Earnings were boosted more significantly than expected by the sale of carbon credits, Jefferies noted. General Electric fell 0.6 percent. The industrial conglomerate was in the red in the first quarter due to restructuring charges. 3M (-2.6%) boosted first-quarter profit thanks to higher sales in all segments. Gamestop shot up another 5.2 percent after already rising 11.5 percent in regular previous-day trading. United Parcel Service (+10.4%) clearly outperformed forecasts in the first period. Lyft fell 1.5 percent after initial gains. the focus was on the sale of its autonomous driving business to Toyota for $550 million. Novavax shares were up 16.3 percent. U.S. President Joe Biden has said the company's experimental Covid-19 vaccine may be close to emergency approval in the United States.


The stock markets in East Asia show no clear trend after the U.S. specifications do not provide a definite direction. In Tokyo, the Nikkei index is up by 0.4 percent to 29,098 points. While hardly anything happens on the Chinese stock exchanges in the important indices, Seoul is currently the tail light with a minus of 0.9 percent.


U.S. Treasury yields remained elevated when bond prices pulled back, reflecting the impact of an auction of seven-year debt and the looming conclusion of the Federal Reserve's two-day policy meeting. Participants referred to speculation that the Fed could make a change in monetary policy after all. The yield of ten-year papers rose by 5.1 basis points to 1.62 percent.


Berenberg raises Geberit target to CHF 605 (545) - Hold
Jefferies starts Vantage Towers with Buy - Target 35 EUR
Deutsche Bank raises target Kuehne & Nagel to CHF 255 (250) - Hold

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