Research Market strategy
By Swissquote Analysts
Published on 26.10.2021
Morning news

Facebook Posts Slower Sales Growth with Apple Privacy Policy

Topic of the day

Facebook Inc. blamed Apple Inc.’s privacy rules for posting slower sales growth and warned of further uncertainty for the social-media giant’s crucial advertising business. Facebook’s ad sales, its primary revenue source, saw slower growth in the first full quarter since Apple in April started requiring apps to ask users whether they want to be tracked. That change has made it harder for advertisers to target their ads at audiences and get information regarding how well their ads performed. Facebook also said Monday that it was changing its reporting structure to break out a unit called Facebook Reality Labs that encompasses augmented-reality and virtual-reality products and services. The move will separate results for that unit from the core business segment, including its flagship Facebook platform and other apps such as Instagram. The company said it expects investment in Facebook Reality Labs to reduce its overall operating profit in 2021 by around $10 billion.

Swiss stocks

The Swiss stock market started the week with a slight gain. Among others, UBS, Holcim, Swiss Re and on Tuesday Novartis grant a look into the books. Novartis shares were down 0.7 percent in the run-up, triggered by the failure of a phase 3 trial for a cancer drug. The SMI still managed to jump into positive territory in late trading, gaining 0.1 percent to 12,063 points, partly because at least slightly positive momentum came from the U.S. stock markets. Among the 20 SMI stocks, there were 13 price gainers and 7 losers. 28.00 (previously: 23.18) million shares were traded. UBS shares were the day's gainers in the SMI, with a premium of 1.8 percent. The bank is selling its wealth management business in Spain to Madrid-based Singular Bank. A purchase price was not disclosed. The share price of competitor Credit Suisse was up 1.4 percent.

International markets


European equity markets ended Monday's session in mixed order, starting the week cautiously after China put in place new travel restrictions in some areas in response to a spike in Covid-19 infections. The Stoxx Europe 600 index rose 0.1% to 472.2 points. In Paris, the CAC 40 and the SBF 120 each gave up 0.3%. In Frankfurt, the DAX 40 gained 0.4%, while the FTSE 100 in London rose 0.3%. HSBC Holdings PLC announced a $2 billion stock buyback and a surge in third-quarter net profit as the lender navigated rising geopolitical and property-market risks in China. The London-based bank earned $3.54 billion in the three months to the end of September, up from $1.36 billion in the same period last year. Its profits were lifted by the release of money it had set aside a year ago, when banks were bracing their loan books for widespread pandemic-related defaults. Those losses mostly haven’t materialized. As the global economy recovers, banks have been releasing past provisions while setting aside less for current loans, boosting their profits. Monthslong talks between the Italian government and bank UniCredit SpA over the sale of nationalized lender Banca Monte dei Paschi di Siena SpA have ended, UniCredit and the government said Sunday. The collapse of the negotiations is a blow to the government headed by former European Central Bank President Mario Draghi, which needs to reprivatize the bank by April under an agreement struck with European authorities when Rome rescued the Tuscan bank in 2017.

United States

U.S. stocks rose, with the S&P 500 and Dow Jones Industrial Average closing at record highs. Stocks flitted between small gains and losses in early trading, but were decisively higher by afternoon. The S&P 500 ticked up 0.5% as of 4 p.m. ET, and the Dow Jones Industrial Average advanced 0.2%. Both topped records hit last week. The Nasdaq Composite Index added 0.9% as technology stocks gained to start the week. Strong earnings from banks, consumer companies and manufacturers have soothed investors' concerns about higher inflation and labor shortages. Now all eyes are set on technology stocks, which have a weighting of nearly 30% in the S&P 500. PayPal Holdings Inc. backed off a takeover of social-media company Pinterest Inc. after shareholders reacted negatively to what would have been a multibillion-dollar bet on e-commerce. PayPal said Sunday that it was “not pursuing an acquisition of Pinterest at this time.” The deal talks, which were confirmed last week by The Wall Street Journal but not publicly acknowledged by either company, would have combined a payments giant with broad financial ambitions with an image-sharing site that has struggled to commercialize the affection of its users. PayPal shares fell almost 12% in three days after the media reports, a sign that investors doubted the wisdom of the deal. They were up as much as 5% in early trading Monday. Hertz Global Holdings Inc. said it has ordered 100,000 vehicles from Tesla Inc. to stock its rental-car fleet, a major bulk purchase that could help the electric-vehicle pioneer get more of its cars into the hands of mainstream consumers. The Estero, Fla., company said that starting in early November and expanding through the end of the year, Hertz customers will be able to rent a Tesla Model 3 at airports and other locations in major U.S. markets and some cities in Europe.


Friendly conditions on Wall Street supported sentiment on the stock exchanges in East Asia and Australia on Tuesday. However, some places have given back their initial gains in the course of the day, weighed down by the worsening regional Corona situation. Also in view is a video conference between Chinese Vice Premier Liu He and US Treasury Secretary Janet Yellen on economic issues. The Chinese side described the conversation as pragmatic and constructive. Japan's Nikkei-225 posted by far the strongest gains, after bringing up the rear in East Asia the previous day.


The US ten-year yield was at 1.64 per cent, the same level as the recent significant increase.


Citi rises Telefonica target to 3,80 (3,75) EUR – Neutral
Credit Suisse lowers Holcim target to 65 (71) CHF – Outperform
Credit Suisse lowers Philips target to 42 (49) EUR – Neutral

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