Research Market strategy
By Swissquote Analysts
Published on 29.03.2022
Morning news

Lawmakers Launch Probe of Credit Suisse Compliance With Russia Sanctions

Topic of the day

U.S. lawmakers asked Credit Suisse Group AG to hand over information related to the bank’s compliance with sanctions over Russia’s invasion of Ukraine. In a letter to Credit Suisse Chief Executive Thomas Gottstein Monday, Rep. Carolyn B. Maloney (D., N.Y.), chairwoman of the Committee on Oversight and Reform, and Rep. Stephen F. Lynch (D., Mass.), chairman of the Subcommittee on National Security, asked the bank to hand over information on its financing of yachts and aircraft owned by potentially sanctioned individuals. They are seeking the information following reports that Credit Suisse instructed investors in a recent debt deal to destroy and erase information related to its dealings with rich clients. The debt deal, first reported by the Financial Times in February, reduced some of the bank’s exposure to $2 billion loans it made to wealthy clients to finance yachts and jets. The FT reported that a presentation for the deal said there were four loan defaults in the 2017-2018 period because of U.S. sanctions against Russian oligarchs.

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Swiss stocks

The Swiss stock market recorded slight gains on Monday. Falling commodity prices, especially for crude oil, ensured a restrained willingness to buy. The SMI gained 0.3 per cent to 12,156 points. Among the 20 SMI stocks, there were 14 gainers and six losers. A total of 40.68 million shares were traded (previously: 27.21 million). Logitech followed the technology stocks on the US Nasdaq stock exchange upwards. Participants attributed the strength to falling market interest rates after they had advanced earlier on Monday. Technology stocks are considered vulnerable to rising interest rates. The stock gained 1 per cent. ABB shares were only visually lower. The share traded ex-dividend and fell 2.1 per cent. However, the loss in the stock was 62 centimes less than the payment, which was 82 centimes. Adecco fell 2.1 per cent. Analysts at JP Morgan downgraded the stock to Underweight from Neutral.

International markets


European stock indices ended in the green on Monday, benefiting from a fall in oil prices as investors monitored the Covid-19 outbreak in Shanghai and the war in Ukraine. The Stoxx Europe 600 index gained 0.1% to 454.2 points. The CAC 40 and SBF 120 gained 0.5% each. The DAX 40 in Frankfurt gained 0.8% and the FTSE 100 in London gave up 0.1%. Barclays shareholders woke on Monday to the unwelcome news of a sizable hit to its U.S. structured products business. These are generally cleverly-designed instruments—sometimes too cleverly for an unpredictable world—but the British bank was tripped up by a much more elementary error. Structured products slice and dice debt, equities or other assets and can mix in some derivatives to offer buyers a narrowly-defined exposure. They have been known to explode spectacularly on occasion, usually when something happens that wasn’t built into their risk models. Natwest Group plc is buying back its own shares from the UK government. The British financial institution agreed to buy back 549.9 million shares for 1.21 billion pounds (about 1.45 billion euros) from HM Treasury, Natwest said on Monday. The British bank said the off-market share purchase represented 4.91 per cent of its issued capital and was expected to be settled on March 30.

United States

U.S. stocks closed slightly higher following a choppy session, with investors preparing for a campaign of interest-rate increases from the Federal Reserve. The S&P 500 added 0.7%. Consumer discretionary and real-estate stocks rose, while energy shares led the benchmark's decliners. The tech-focused Nasdaq Composite Index ticked up 1.3% while the Dow Jones Industrial Average added 0.3%. Fed officials have recently signaled openness to the central bank making half-percentage-point interest rate increases if the economic outlook calls for it, rather than the quarter-percentage-point changes that are more customary. Tesla Inc. said it would request shareholder approval at its annual meeting for an increase in the number of shares of the electric-car maker to enable a stock split, though the company didn’t specify when such a split would take place or what the ratio of shares would be. Tesla shares closed Monday at $1,091.84, up 8%. The auto maker typically holds its shareholder meeting in the fall. Tesla is currently authorized to issue 2 billion shares. As of Jan. 31, the company had 1.03 billion shares outstanding. HP Inc. agreed to buy Poly, a maker of workplace communications products, for $1.7 billion in a bet on the rise of hybrid work. HP will pay $40 cash for each outstanding share of Poly, a premium of more than 50% from its closing price Friday. The companies valued the deal for Poly, formerly known as Plantronics, at $3.3 billion, including debt.


The stock markets in East Asia join the friendly trend on Wall Street from Monday on Tuesday. With the exception of Shanghai, where the Composite Index is down 0.4 per cent, most indices are moderately up. In mainland China, Beijing's rigorous lockdown policy to curb the Corona pandemic is slowing buying. Tokyo's Nikkei index improves by 0.6 per cent to 28,119 points.


Yields on 10-year Treasury notes continued to slip early Tuesday. During Monday's New York session, portions of the yield curve continued to invert, with the yield on the 5-year note at 2.549% and the 3-year at 2.56%, surpassing the 10-year rate.


JP Morgan lowers Adecco to Underweight (Neutral) – Target CHF 42 (50)

CS lowers the Philips target to EUR 31 (32.50) – Neutral

BoA lowers the Ryanair target to EUR 19 (19.50) – Buy

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