Research Market strategy
By Swissquote Analysts
Published on 15.09.2021
Morning news

Boeing Raises Outlook on Travel Rebound

Topic of the day

Boeing Co. forecast it will take another two years for the hardest-hit regional and long-haul air travel slowed by the coronavirus pandemic to return to precrisis levels. However, the aerospace company on Tuesday said it had become more bullish about the pace of recovery currently driven by domestic travel in the U.S. and China, even after a recent slowdown caused by the Delta variant. Boeing said the aviation industry had only lost two years of growth because of the pandemic and hadn’t undermined airlines’ need for thousands of new, more fuel-efficient aircraft over the next decade. “We are preparing for growth,” Marc Allen, Boeing’s chief strategy officer, told reporters as he outlined the company’s forecast of a $9 trillion market for its commercial, defense and services businesses over the next decade, up from the $8.7 trillion estimate two years ago. Airlines, plane makers and suppliers continue to debate whether the pandemic has fundamentally changed the industry. Boeing and Airbus SE are boosting production, which critics said may not be supported by a potentially permanent drop in business travel, changing route networks and environmental concerns.

Swiss stocks

The positive trend on the Swiss stock market continued on Tuesday. The SMI gained 0.2 per cent to 12,097 points. Among the 20 SMI stocks, there were eleven gainers and nine losers. 27.11 (Monday: 25.16) million shares were traded. A clearer increase in the market was also prevented by the declines in bank stocks. The shares of UBS (-0.5%) and Credit Suisse (-1.2%) fell. At the bottom of the SMI table were the shares of Richemont (-3.5%) and Swatch (-1.7%). According to analysts at Bank of America, demand for luxury products weakened in August, but this was to be expected. This was particularly evident in the Asian and US regions and is likely to have been largely related to the Covid 19 pandemic. The analysts believe that demand will recover as soon as the market environment normalises.

International markets

Europe

Danish jeweler Pandora AS on Tuesday set new financial targets and increased its share buyback program by 3 billion Danish kroner ($476.5 million) to DKK3.5 billion. The company said it is entering a new chapter of growth, with significant value creation potential and a wide range of growth opportunities in or close to the existing core business that will drive earnings before interest and tax margin expansion and continued strong cash generation. The company said it is targeting an organic compound annual growth rate of 5%-7% during 2021-23, with total revenue growth CAGR expected at 6%-8%, lifting revenue to between DKK24.8 billion and DKK26.2 billon in 2023. The EBIT margin is expected to increase to 25%-27% in 2023, it added. BP PLC has hired the former chief executive of one of the world’s largest wind power developers to run its gas and low-carbon operations, as the oil giant looks to support its push into renewable energy. The British company on Tuesday said Anja-Isabel Dotzenrath, the former CEO of RWE Renewables, would help lead its pivot away from fossil fuels and into low-carbon energy. She replaces longtime BP executive Dev Sanyal who, in an unexpected departure, is leaving the company to take on a new role at a privately held refining company.

United States

Stocks fell, continuing their recent pullback even after fresh data showed that inflation climbed at a slower pace than economists expected in August. The S&P 500 declined 0.6%, while the Dow Jones Industrial Average shed 0.8%. The technology-heavy Nasdaq Composite fell around 0.5%. The market has broadly pulled back this month amid concerns that rising cases of the Delta variant of Covid-19 could weigh on economic activity and that stocks have rallied for too long without a correction. Through Monday, the S&P 500 fell in five of the past six trading sessions. The Labor Department's consumer-price index rose a seasonally adjusted 0.3% in August from July--lower than the 0.4% that economists surveyed by The Wall Street Journal expected. Investors have been closely following inflation data for signs of whether the Federal Reserve might begin to scale back its easy-money policies. Tuesday's inflation reading appeared unlikely to change the Fed's plans. Chevron Corp. is tripling spending in its new low-carbon unit, which Chief Executive Mike Wirth said he increasingly sees as a viable business. The San Ramon, Calif., oil giant is pledging to spend $10 billion through 2028 on biofuels, hydrogen production, carbon capture and other technologies, up from a prior commitment of around $3 billion. Mr. Wirth said in an interview that the spending boost reflects optimism in Chevron’s new energies unit, announced in July to oversee the company’s low-carbon investments. Amazon. com Inc. plans to add 125,000 employees throughout its U.S. warehouse operations as the technology giant prepares for the holiday shopping period, in which a tight labor market is set to make it more challenging to find staff. The company also said Tuesday that it plans to open 100 facilities across the country in September, deepening its pool of locations used to store, sort and ship its packages. Amazon, which has had a starting wage of $15 an hour, said its minimum wage has gone up in many locations and now averages more than $18 across the nation. In some areas, for example, Amazon said it has offered pay of up to roughly $22.50 an hour.

Asia

The stock exchanges in East Asia and Australia are mixed in the middle of the week. Disappointing economic data from China dampened investors' buying mood in many places, but also fuelled hopes for further economic stimulus from the Chinese central bank. In Shanghai, share prices more than made up for their initial losses after retail sales and industrial production data came in well below expectations in some cases. The composite index is up 0.3 per cent.

Bonds

The 10-year Treasury yield nudged higher in Asia but remained below 1.30%. The slowdown in U.S. inflation doesn't necessarily mean the Federal Reserve will delay tapering.

Analysis

IR lowers the Tui target to 2,80 (3,00) EUR – Sell
Dt. Bank rises Kühne + Nagel to Buy (Hold)
UBS lowers the Easyjet target to 760 (862) p – Neutral

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