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By Swissquote Analysts
Published on 07.04.2022
Morning news

Samsung Forecasts Record First-Quarter Revenues

Topic of the day

Samsung Electronics Co. forecast record quarterly revenues and a 50% rise in first-quarter operating profits over the prior year, owing to strength for memory chips and a robust rollout of its latest flagship smartphones. Samsung’s performance speaks to how the prolonged chip shortage continues to boost business for tech suppliers. But sales of the South Korean tech giant’s memory chips and smartphones could face risks of decline in the months ahead as factors including the Russia-Ukraine war and record inflation could dampen consumer sentiment. On Thursday, the world’s largest maker of memory chips and smartphones said it forecasts operating profit of 14.1 trillion South Korean won, equivalent to about $11.6 billion, for the quarter ended March 31. That compares with 9.4 trillion won for the year-earlier quarter. Revenue is expected to reach 77 trillion won, up about 18% from the prior year. It would mark Samsung’s highest ever quarterly revenue, just topping the prior record of 76.6 trillion won set in the prior quarter. Samsung’s outlook topped market expectations. Analysts polled by S&P Market Intelligence were expecting on average 13.5 trillion won in operating profit and 74.9 trillion won in revenue. The Suwon, South Korea-based company reports full earnings later this month.

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Swiss stocks

On Wednesday the SMI lost 0.5 per cent to 12,320 points, significantly less than other market barometers in Europe. Among the 20 SMI stocks, there were 15 price losers and five price winners. A total of 44.26 (Tuesday: 37.96) million shares were traded. Novartis gained 2.4 per cent and Roche 1.4 per cent. Swisscom shares, which are also considered defensive, ranked third in the SMI (+1.2%). Lonza recorded a minus of 0.8 per cent. The company sold an automated system for aseptic sampling from bioreactors to Merck for an undisclosed price. Richemont (-5.7 per cent) declined significantly. Like other companies in the sector in Europe, the luxury products manufacturer is likely to feel the impact of the loss of business in Russia and Ukraine strongly. Swatch fell by 3.4 per cent. The extended lockdown in Shanghai also had an adverse effect.

International markets


European stocks fell as investors considered a more aggressive shift in monetary policy from the Federal Reserve as the central bank battles historically high inflation. Adding pressure to equities, especially in Europe, was the expectation that new sanctions on Russia - including banning imports of coal - are coming from the European Union.The Stoxx Europe 600 index lost 1.5% to 456 points. In Paris, the CAC 40 and SBF 120 were down 2.2% each. In Frankfurt, the DAX 40 gave up 1.9% and in London, the FTSE 100 gave up 0.3%. Klépierre's earnings growth prospects (-5.1%) are hampered by inflationary and debt cost hurdles in addition to "structural pressures from online retailing", said JPMorgan analysts, who lowered their recommendation regarding the stock from "neutral" to "underperform". Atos (-4.3%) will propose to its shareholders the appointment of three new independent directors at its general meeting on 18 May. EDF (-0.8%) announced the success of its €3.16bn capital increase, designed to strengthen its balance sheet. ADP Group (-1.5%) is facing regulatory uncertainties that are expected to hurt its growth, Goldman Sachs said, lowering its advice on the Paris airports operator from "neutral" to "sell". Alstom (-2.7%) announced that Swedish rail operator SJ had placed a firm order for 25 Zefiro Express high-speed electric trains, worth nearly €650m.

United States

Bond yields hit their highest level in three years and technology stocks lost ground as investors digested more details about the Federal Reserve’s plan to raise interest rates. Stocks fell Wednesday morning, rose ahead of the afternoon release of the minutes from the Fed’s mid-March meeting, then dropped again. The technology-focused Nasdaq Composite Index dropped 315.35 points, or 2.2%, to 13888.82. The S&P 500 lost 43.97 points, or 1%, to 4481.15, while the blue-chip Dow Jones Industrial Average fell 144.67 points, or 0.4%, to 34496.51. The Federal Reserve’s plan to raise interest rates has rocked shares of home builders, which fell Wednesday across the board, the losses accelerating after the release of the Fed minutes. PulteGroup fell $1.15, or 2.7%, to close at $40.75, Lennar was down $3.42, or 4.3%, to $75.45, and D.R. Horton slid 2.92, or 3.9%, to $71.13. Twitter slipped 0.4%, or $0.21, to close at $50.77. Shares of the social-media company rose this week after filings showed Tesla Chief Executive Elon Musk had amassed a big stake. Twitter said Tuesday Mr. Musk would join the board. Tesla shares dropped 4.2%, or $45.40, to close at $1045.76. Chip maker Nvidia fell 5.9%, or $15.24, to $244.07. Rivian Automotive shares, after rising in early trading after the electric-vehicle maker reported first-quarter production and deliveries that it said were in line with its forecasts, dropped 5%, or $2.09, to $40.10. Retailer Walmart closed up $2.52, or 2.3%, to $154.99, a new high and its first record close since November 2020.


In Asia, major indexes broadly closed with losses again on Thursday. In Hong Kong, the Hang Seng Index is down 1.3 per cent after interim gains. The Shanghai Composite loses 1.0 per cent. The Nikkei slips 1.8 per cent while the Kospi falls 1.4 per cent. Shares of Samsung Electronics edged 0.7 per cent lower despite the technology group issuing a positive forecast for the first quarter. Shares of the internet company Kakao fall 4.8 per cent and SK Hynix decreases by 0.4 per cent. LG Electronics slips 1.3 per cent.


Long-dated U.S. government debt yields extended recent gains Wednesday, with mounting evidence that the Federal Reserve is planning to rapidly raise interest rates and reduce its bondholdings lifting the 10-year Treasury yield to 2.596%, following a 15 basis point jump on Tuesday. The two-year yield, on the other hand, gave up 4 basis points to 2.486%, following a rise of almost 10 basis points on Tuesday.


Jefferies increases target Standard Chartered to 972 (855) p - Buy

Berenberg lowers target Global Fashion Group to EUR 7 (12) - Buy

Jefferies raises Diageo target to 4,400 (4,100) p - Buy

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