Research Market strategy
By Swissquote Analysts
Published on 23.08.2021
Morning news

U.K. Regulator Calls for Probe of Nvidia's $40 Billion Deal to Buy Chip Designer Arm

Topic of the day

A U.K. regulator has serious concerns about whether Nvidia's $40 billion plan to buy British chip designer Arm would choke competition and wants an in-depth investigation of the deal. Any probe, however, would have to be ordered by the government's digital chief. "We're concerned that Nvidia controlling Arm could create real problems for Nvidia's rivals by limiting their access to key technologies, and ultimately stifling innovation across a number of important and growing markets," said the authority's chief executive, Andrea Coscelli. "This could end up with consumers missing out on new products, or prices going up." The loss of competition, the authority said, might hurt a range of markets, including videogames, data centers, self-driving vehicles, and the internet of things. On Wednesday, in its fiscal second-quarter report, Nvidia warned investors that the acquisition probably wouldn't close early next year -- the initial target date. The company wasn't clear on how long a delay might be.

Swiss stocks

Positive trends on the U.S. stock markets helped the Swiss stock market to gain ground on Friday. The SMI rose 0.1 percent to 12,416 points. Of the 20 SMI stocks, there were 15 price gainers and five losers. 29.56 (previously: 37.01) million shares were traded. Among the individual stocks, Partners Group advanced 1.4 percent. The company is selling its stake in Straive, a Singapore-based data solutions specialist. Meanwhile, building materials manufacturer Sika (+1.0%) is divesting its European industrial coatings business. A positive analyst comment helped Geberit climb 1.2% to CHF761.40. Baader Helvea increased its price target for the stock to 795 from 680 francs and confirmed its "add" rating. Of the luxury goods stocks that have been hit hard in recent days, only Swatch (+0.8%) recovered, while Richemont (-0.3%) fell again. Swatch may have been boosted by an article on There, various analysts are quoted who speak of a renewed increase in demand for high-priced watches, from which Swatch with its brands Omega, Longines and Tissot should particularly benefit. Especially in the important sales market China, the demand is high. Just on Thursday, news that China was looking to redistribute wealth and tax wealthy citizens more heavily led to a sell-off in shares of Swatch and Richemont. Among small caps, U-Blox slumped 10.3 percent. The provider of wireless and positioning technologies had presented half-year figures that were not well regarded. The figures of PSP Swiss Property (-0.8%) were also received unfavourably.

International markets


European equity markets ended the week on a positive note, recovering after falling sharply the previous day amid fears that the spread of the variant Delta coronavirus will weigh on the global economic recovery and that the Federal Reserve (Fed) will scale back its support measures this year. The Stoxx Europe 600 index rose 0.3% on Friday to 468.8 points, bringing its decline to 1.5% for the week as a whole. In Paris, the CAC 40 and the SBF 120 gained 0.3% each on Friday. In Frankfurt, the DAX 30 also gained 0.3%, while the FTSE 100 in London rose 0.4%. Supermarket group Morrisons has accepted a GBP7 billion takeover offer from U.S. private equity group Clayton, Dubilier & Rice, switching its recommendation from rival suitor Fortress, a Softbank-backed consortium. The agreed cash offer is 285 pence a share compared with the latest offer from the Fortress-led consortium of 272 pence a share, and also represents a 2.1% premium to Morrisons's Thursday closing price of 279.20 pence. Shares rose 4.7% on the news and AJ Bell analyst Danni Hewson questions Fortress's next move. In response, Fortress said it is considering its options in respect of its own offer. Marks & Spencer raised its profit forecast for fiscal 2022 after a strong start to the year, with sales growth across all segments. Its shares jumped 12% in reaction. The retailer said it now expects that adjusted pretax profit for the year that began on April 4 will be above the upper end of its previous guidance of GBP300-GBP350 million. M&S said group revenue for the 19 weeks to Aug. 14 was up 29% on the same period last year, with a 92% rise in clothing-and-home, a 40% increase in international and an 11% rise in food. Volkswagen is cutting production at its main plant in Wolfsburg due to a shortage of semiconductors. It will only produce during one shift across all production lines at the site next week and introduce short-time work for all other shifts in Wolfsburg. VW's shares fell 2% on the news.

United States

U.S. stocks posted weekly losses despite bouncing higher Friday, weighed down by growing investor anxieties about the economic outlook. Stocks stumbled midweek as investors weighed fears that an uptick in Covid-19 infections and a slowdown in China’s growth could impede the global recovery. Worries about central-bank policy also cut into investors’ appetite for riskier assets, analysts said. While the S&P 500 and Nasdaq Composite managed to rise Thursday and Friday, their gains weren’t enough to offset declines from earlier in the week. Losses were particularly steep among shares of economically sensitive companies such as banks, materials companies and energy producers. The Dow Jones Industrial Average increased about 226 points, or 0.6%, to 35120.08 on Friday. The S&P 500 added 35.87 points, or 0.8%, to 4441.67, and the tech-heavy Nasdaq Composite advanced 172.88 points, or 1.2%, to 14714.66. For the week, the Dow lost 1.1%, while the S&P 500 slipped 0.6% and the Nasdaq retreated 0.7%. Corporate earnings drove swings among individual stocks. Foot Locker jumped $3.95, or 7.3%, to $58.34 after the retailer, citing strong sales in its women’s and children’s footwear departments, posted earnings that surged past analysts’ expectations. Ross Stores fell $3.46, or 2.7%, to $123.12 after delivering an outlook that disappointed some investors. Cyclical sectors lagged behind the rest of the market. While the S&P 500 energy sector rose Friday, it logged a 7.3% decline for the week, its sharpest pullback since March.


Positive indicators dominate at the start of the new week on the stock exchanges in East Asia. In Tokyo, the Nikkei 225 index gains 1.8 percent. The Composite Index in Shanghai moves forward by 1.0 percent. On the Hong Kong stock exchange, the Hang Seng Index rises by 1.8 percent. In Seoul, the Kospi improves by 1.6 percent. Among the individual stocks in Seoul, the shares of Hanjin Heavy Industries & Construction gain 14.6 percent.


U.S. government bond yields made their largest one-day gain in over a week on Friday, following signals that the Federal Reserve is on track to begin reversing easy-money policies later this year. The yield on the benchmark 10-year U.S. Treasury note increased to 1.259% compared with 1.246% on Thursday. This week, though, yields declined the most in three weeks, snapping a two-week winning streak.


Deutsche Bank lowers Antofagasta target to 1,320 (1,350) p - Hold
Jefferies increases Adyen target to EUR 2,960 (2,560) - Buy
Citi lifts DSV Panalpina target to DKK 1,800 (1,710) - Buy

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