Research Market strategy
By Swissquote Analysts
Published on 03.09.2021
Morning news

Ford and GM Scale Back Production Amid Chip Shortage

Topic of the day

Ford Motor Co. and General Motors Co. are scaling back production, the latest example of how the computer-chip shortage is affecting auto makers. GM said it is temporarily idling its two main pickup plants in Silao, Mexico, and Indiana. Both of those plants produce GMC Sierra pickups and Chevrolet Silverados. GM is also idling production at three other factories for a couple of weeks, which will mean temporarily ceasing production of different SUV models like the Chevy Traverse. Ford said Wednesday it is cutting back its production of pickup trucks at its three truck plants starting next week. It is stopping production of its F-150 at its Kansas City factory and going to operate one workshift instead of three at its F-150 plant in Dearborn, Mich. The company is also going to temporarily operate two crews of workers at its Kentucky truck plant instead of three. That plant is responsible for making Ford Expedition and Lincoln Navigator SUVs and Super Duty pickups.

Swiss stocks

The stock market moved just below its all-time high again on Thursday. Small gains in the course of the day melted away and the SMI closed unchanged. It trended at 12,432 points. Among the 20 SMI stocks, there were 10 price losers and 10 price winners. 19.88 (previously: 26.14) million shares were traded. Insurance stocks were sold off this time after the previous day's strong performance. Swiss Re fell by 1.4 per cent and Zurich Insurance by 0.3 per cent. Cyclicals such as ABB (+0.4%) and Sika (+1.4%) tended to be sought after. Selling was also seen in heavyweights Nestle, Novartis and Roche (-0.3% each). Luxury goods stocks extended their strong gains from the previous day somewhat and gained up to 0.8 per cent. In the broad market, Emmi rose 2.3 per cent. With Athenos, the Group is acquiring the number 1 in the US feta market and, according to its own information, is thus strengthening the strategically most important pillar of speciality cheese in Emmi's most important foreign market.

International markets

Europe

European equity indices ended slightly higher on Thursday after a surprise drop in weekly jobless claims in the US. The Stoxx Europe 600 index rose 0.3% to 474.6 points. In Paris, the CAC 40 and SBF 120 gained 0.1 percent each. In Frankfurt, the DAX 30 gained 0.1% while the FTSE 100 in London gained 0.2%. A consortium that includes global private-equity firm Advent International Corp. on Thursday launched an $8.1 billion takeover bid for Swedish Orphan Biovitrum AB, a Stockholm-based biopharmaceutical company specializing in the treatment of rare diseases. The drugmaker’s board unanimously recommended shareholders accept the offer of 235 Swedish kronor (equivalent to $27.25) a share in cash from Advent and Aurora, an affiliate of Singapore’s sovereign-wealth fund GIC Pte. Ltd., which values the issued share capital of the company, known as Sobi, at approximately SEK69.4 billion, or around $8.1 billion. The European Union will return to Africa millions of doses of Johnson & Johnson’s Covid-19 vaccine that it received from a plant in South Africa, following criticism by health activists that the bloc was taking away shots from a continent that has the lowest immunization rate in the world. Strive Masiyiwa, who heads the African Union’s Vaccine Acquisition Task Team, said the decision to return the shots produced at Aspen Pharmacare Holdings Ltd. was made at a meeting between European Commission President Ursula von der Leyen and South African President Cyril Ramaphosa last week. As part of the deal, the EU will also not take doses from the Aspen plant it was expecting in September, Mr. Masiyiwa said.

United States

U.S. stocks rose Thursday after fresh data on the labor market and the trade balance showed that the economic recovery remains on track. The Dow Jones Industrial Average rose 131.29 points, or 0.4%, to 35443.88 and the S&P 500 added 12.86 points, or 0.3%, to 4536.95, setting a fresh record high. The Nasdaq Composite, which also set a record on Wednesday, rose 21.80 points, or 0.1%, to 15331.18, as large technology stocks extended their gains. Capital One Financial Corp. founder and longtime Chief Executive Richard Fairbank agreed to pay nearly $640,000 to settle civil claims that he violated federal laws by failing to report an increase in his stockholdings. Mr. Fairbank received a multimillion-dollar compensation package including more than 100,000 Capital One shares in 2018, increasing the size of his holdings to $168 million, the Federal Trade Commission said Thursday. The Justice Department filed a civil antitrust lawsuit against Mr. Fairbank, per the FTC’s request, and subsequently filed a proposed settlement, the terms of which Mr. Fairbank agreed to. The Food and Drug Administration is considering whether to authorize a lower dose of Moderna Inc.’s Covid-19 vaccine for boosters than the dose given in the first two shots, people familiar with the deliberations said. Moderna said Wednesday it is asking the FDA to authorize a 50 microgram dose, half the dosage of the first two shots. Some in the government are leaning toward authorizing the 100 microgram dose, the people said, because of concerns a lower-dose booster might not offer a durable enough boost to counter fast-changing variants of Covid-19.

Asia

As the week draws to a close, the stock markets in East Asia and Australia continue to show no consistent trend. The Tokyo stock exchange showed a runaway upward trend, with the Nikkei-225 rising by 1.8 per cent. The background is media reports that Prime Minister Yoshihide Suga will unexpectedly not run for re-election on 29 September. He was considered the favourite in the election for LDP leader, although his government currently has historically poor poll ratings.

Bonds

U.S. government bond yields were little changed on Thursday, the 10-year Treasury note yielded 1.293%, compared with 1.301% on Wednesday.

Analysis

JPM lowers Unilever target to 44 (49) EUR – Underweight
UBS lowers Volvo target to 175 (180) SEK – Sell
CS lowers Air France-KLM to 1,98 (2,20) EUR – Underperform

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