Research Market strategy
By Swissquote Analysts
Published on 19.10.2021
Morning news

Philips 3Q Sales Missed Market Views, Lowers FY Guidance

Topic of the day

The Dutch medical technology group Koninklijke Philips NV reported on Monday a rise in net profit for the third quarter but sales declined and it lowered its full-year growth and margin guidance. The Dutch medical-technology group said its results were hit by supply-chain issues, which led to longer lead times to convert its strong order book to revenue during the period. It expects the problems to continue in the fourth quarter. Philips reported a net profit from continuing operations of €2.98 billion in the third quarter, compared with €340 million in the same period last year. The net result was mainly influenced by the sale of the home appliances business, the statement said. Philips' quarterly sales fell to 4.16 billion euros from 4.98 billion euros. Adjusted earnings margin before interest, taxes, depreciation and amortisation was 12.3 percent in the third quarter, the company said. The shares fell by 3.1 per cent.

Swiss stocks

Economic worries dampened investors' buying mood on the Swiss stock market on Monday. The SMI gained 0.1 per cent to 11,968 points. Among the 20 SMI stocks, there were ten price losers and nine price winners, and one share closed unchanged. A total of 24.29 million shares were traded (previously: 34.81 million). Weak economic data weighed on the prices of cyclicals such as ABB (-1.1%) and Geberit (unv.). Bank shares showed a mixed trend. Although they tend to benefit from the recent rise in market interest rates, they suffered from economic weakness. Credit Suisse fell by 1.2 per cent and Julius Baer by 0.7 per cent. UBS managed to turn the corner and closed 0.3 per cent higher. On the losing side were also the shares of luxury goods manufacturers Richemont (-1.0 per cent) and Swatch (-1.2 per cent), which are heavily dependent on the Chinese market. The fact that retail sales in China had surprisingly risen significantly in September did not provide any support. On Richemont, rumours circulated in the market that the company is "exploring options" for its ailing e-commerce division Yoox-Net-a-Porter (YNAP), which could include a sale of the business. Index heavyweight Nestle was one of the market's pillars of support, up 0.2 per cent. Shares of Logitech (+1.9%) were in strong demand. In this case, the fact that technology stocks in the USA held up comparatively well on Monday probably had a supporting effect.

International markets


European stocks fell as investors gave a downbeat response to Chinese economic data, though oil stocks gain as crude prices increase. Data out Monday showed China's economy grew 4.9% in the third quarter from a year prior, a slowdown from the second quarter's 7.9% rate. Power shortages and supply-chain problems added to the impact of Beijing's efforts to rein in its property and technology sectors. The Stoxx Europe 600 index lost 0.5% to 467 points. In Paris, the CAC 40 and the SBF 120 both lost 0.8%, weighed down by luxury goods stocks. In Frankfurt, the DAX 40 dropped 0.7%, while the FTSE 100 in London fell 0.4%. Valneva jumped 32.8% after announcing that the pivotal Phase 3 trial evaluating its Covid-19 vaccine candidate, VLA2001, had met its two primary endpoints. Shares in luxury goods groups suffered after news of slowing growth in the Chinese economy. Kering lost 2.4%, LVMH 2.2% and Hermès 1.4%. In London, Burberry was down 1.9%, and in Zurich Richemont lost 1%. Belgian materials technology group Umicore (-3.9% in Brussels) cut its forecast for 2021 due to the "recent decline in platinum metal prices, as well as a stronger than expected impact of the global semiconductor shortage on automotive production". Skoda, a brand of the German group Volkswagen (-3.2%), announced on Monday that it was suspending almost all production in its Czech factories for a fortnight, due to constraints linked to the global shortage of semiconductors.

United States

The S&P 500 and Nasdaq Composite rose Monday, boosted by investor enthusiasm over a busy earnings week that many hope will give clues about how companies are dealing with inflation and supply-chain issues. The broad benchmark index ticked up 15.09 points, or 0.3%, to 4486.46, notching its fourth consecutive session of gains. The technology-heavy Nasdaq Composite gained 124.47 points, or 0.8%, to end at 15021.81. The Dow Jones Industrial Average, in contrast, lost 36.15 points, or 0.1%, to finish at 35258.61.On Monday, supermarket chain Albertsons reported higher sales, with executives saying consumers are still spending heavily on groceries. The Boise, Idaho-based company is passing on some price increases to customers but said that it is offering cheaper alternatives. Its shares rose 95 cents, or 3.3%, to end at $29.51. This week, investors will receive earnings results from a range of companies, including Procter & Gamble, Netflix and American Airlines. Technology stocks performed well Monday. Tesla, which reports earnings this week, added $27.08, or 3.2%, to finish at $870.11. Facebook gained $10.58, or 3.3%, to close at $335.34. Twitter advanced $2.07, or 3.3%, to $64.84. Shares of utility companies, in contrast pulled back, with the sector posting the worst performance of the S&P 500’s 11 groups. Consolidated Edison lost $1.58, or 2.1%, to close at $72.89. Meanwhile, Zillow Group ‘s Class C shares lost $8.97, or about 9.5%, to finish at $86 after the real-estate company said it will stop buying and flipping new houses for the remainder of this year. Bitcoin, the world’s largest cryptocurrency by market value, gained 3.3% from its 5 p.m. ET level Sunday to trade at $61,445.09 at 5 p.m. ET, according to CoinDesk. The U.S.’s first bitcoin exchange-traded fund is expected to start trading Tuesday.


The stock markets in East Asia posted gains across the board on Tuesday. In Tokyo, the Nikkei index rose 0.7 per cent to 29,219 points. E-commerce and electronics stocks are particularly sought after. Mercari increased by 6.1 per cent and Lasertec 4.5 per cent. In mainland China, the Shanghai Composite advances 0.7 per cent after weak economic growth data in China weighed on sentiment the previous day. The Kospi in South Korea is also 0.7 per cent firmer. The fact that North Korea has tested another missile, according to South Korean data, does not weigh on sentiment.


Treasury yields traded mixed Monday, with the 2-year note hitting a 19-month high and the long bond’s rate edging back, as a rally in oil buttressed concerns about inflation in the short-term and investors positioned for an eventual reduction of the Federal Reserve’s asset purchases. The ten-year US Treasury yield rose by 7 basis points to 1.584% from 1.575% on Friday evening.


Berenberg increases Publicis target to EUR 65 (62) - Buy
Jefferies lifts Vodafone target to 152 (151) p - Buy
Berenberg raises Rational to Buy (Hold) - Target EUR 1,170 (625)

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