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By Swissquote Analysts
Published on 29.07.2021
Morning news

Boeing Swings to Profit on Defense and Jet Sales

Topic of the day

Boeing Co. reported its first quarterly profit in nearly two years and said it needs an order from China by mid-2022 to participate fully in a stronger-than-expected recovery in air travel. The company also said it had shelved plans to shed another 10,000 workers by the end of the year as it continues to boost production of the 737 MAX jetliner and airlines seek more parts and services. Boeing hasn’t secured a direct new jetliner order from China in almost four years, and has been pushing for improved trade relations with the U.S. Chief Executive David Calhoun said in a message to employees that Boeing’s payroll depends on the commercial market recovery, U.S.-China trade and the company’s own performance. Boeing on Wednesday reported a profit of $567 million for the June quarter compared with a $2.4 billion loss in the same period a year ago. Sales rose 44% to $17 billion. Adjusted per-share earnings of 40 cents beat the consensus among analysts polled by FactSet for a loss of 83 cents. Sales rose 44% to $17 billion as jetliner deliveries quadrupled from a year ago, including 47 of its MAX jets. It has delivered more than 130 new planes since the MAX was cleared to fly again in some countries starting late last year, and airlines have returned more than 190 once-grounded jets to service.

Swiss stocks

The Swiss stock market ended Wednesday's trading session with slight gains after a weak week so far. The focus was on the current reporting season. The SMI gained 0.4 per cent to 12,073 points. Among the 20 SMI stocks, there were 13 price gainers and 6 losers, with Holcim closing unchanged. 21.75 (previously: 25.62) million shares were traded. There was no clear preference among investors in the SMI. Alcon led the way with a gain of 2.7 per cent. The shares of the two pharmaceutical giants Roche (+0.9%) and Novartis (+0.8%) were also in demand. Richemont (+1.1%) recovered somewhat from the previous day's significant losses. Meanwhile, the share of competitor Swatch (+0.4%) lagged behind. The SMI was burdened above all by index heavyweight Nestle. The share fell 0.3 per cent. The food company will present business figures on Thursday. Banking stocks also lost out. UBS lost 0.7 per cent, Credit Suisse 0.8 per cent.

International markets


European stock indices ended higher on Wednesday after good quarterly results from major companies, although a wait-and-see attitude prevailed ahead of the outcome of the Federal Reserve's monetary policy meeting later in the evening. The Stoxx Europe 600 index closed up 0.7% at 461.7 points. In Paris, the CAC 40 and the SBF 120 gained 1.2% to 6,609.31 points and 1.1% to 5,167.99 points respectively. In Frankfurt, the DAX 30 ended up 0.3%, as did the FTSE 100 in London. Pfizer Inc. expects sales for its Covid-19 vaccine this year to reach about $33.5 billion, a nearly 30% increase from its forecast three months ago, as the shot plays a growing role in the global campaign to reduce the spread of the coronavirus. With concerns growing over the more infectious Delta variant, Pfizer also said that booster shots will likely be needed to ensure protection against the virus. U.S. officials haven't authorized the use of booster shots, although they are studying the issue. Pfizer and partner BioNTech SE plan to seek regulatory approval in the U.S. for a booster shot in August, while a clinical trial testing an updated version of its vaccine targeting the Delta variant is also set to start next month, the company said Wednesday when announcing second quarter earnings. Deutsche Bank AG’s results signaled that the bumper profits accruing to its investment bank may have peaked, exposing the deeper challenges the lender faces two years into a strategic makeover. The Frankfurt-based bank reported a drop in investment-banking revenue in the second quarter as booming client activity during the pandemic slowed down. Still, net profit surged compared with last year as its business lines held better than expected and the economic rebound in Germany put a lid on souring loans.

United States

Stocks mostly edged lower after the Federal Reserve hinted that it was getting closer to curtailing its asset-purchasing program that has helped juice the U.S. economic recovery. The broad S&P 500 index fell less than 0.1%, while the Dow Jones Industrial Average was down 0.4%. The technology-heavy Nasdaq Composite, however, climbed 0.7%. As investors expected, Fed officials left their stance on monetary policy unchanged at the conclusion of a two-day policy meeting. The Fed said in a statement that the economy has made progress toward its employment and inflation goals, and that the central bank would continue to assess its stimulus programs in the coming months. Ford Motor Co. is expected to post muted results for the second quarter on Wednesday, as the impact of the computer-chip shortage marred an otherwise ripe environment for the car business. Analysts surveyed by FactSet predict a second-quarter net loss of about $220 million. That would mark a reversal from Ford’s record first-quarter pretax profit of $4.8 billion, which was aided by booming prices, as the inventory crunch has created a seller’s market. McDonald’s Corp. said its sales are surpassing pre-pandemic levels across the world as more of its dining rooms reopen and U.S. customers try new chicken offerings. The burger giant reported sales of $5.9 billion for its quarter ending in June, up 57% from a year earlier when it was hit by Covid-19-related lockdowns. Analysts expected sales of $5.6 billion. Global same-store sales in the second-quarter were 7% higher than in the same period of 2019, with the U.S. business leading the growth, McDonald’s said Wednesday.


In an overall friendly trend on the East Asian stock markets on Thursday, the stock exchanges in Shanghai and especially Hong Kong stand out. The HSI shot up by 2.7 per cent, dynamically continuing the recovery that began the day before after the heavy losses at the beginning of the week. In Shanghai, the market barometer rose by 1 per cent after four consecutive days of losses.


Yields came back somewhat on the US bond market. The yield on ten-year paper fell by 1.4 basis points to 1.23 per cent. Before the Federal Reserve's statements, it was at 1.26 per cent.


IR lowers BASF target to 69 (70) EUR – Hold
JP Morgan rises Campari target to 13 (12,50) EUR – Overweight
UBS lowers Philips target to 53 (56) EUR – Buy

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