Research Market strategy
By Swissquote Analysts
Published on 19.05.2022
Morning news

Siemens Energy Considers Buyout for Siemens Gamesa

Topic of the day

Power generation equipment maker Siemens Energy (+1% in Frankfurt) is considering a cash tender offer for all outstanding shares in its wind energy subsidiary Siemens Gamesa Renewable Energy (+12.7%) with a view to delisting - a long-awaited move after a series of profit warnings from the wind-turbine maker. Siemens Energy currently holds 67% of Siemens Gamesa's share capital. The news comes after months of speculation and investors' calls for Siemens Energy to take over the poorly performing Spanish wind-turbine maker. Siemens Gamesa has been struggling with production and execution issues related to the 5.X onshore wind turbine platform, cost inflation and supply-chain disruptions that have prompted multiple profit warnings in less than a year. Siemens Energy earlier this month reported a widened loss in the second quarter of its fiscal year as Siemens Gamesa's poor performance weighed on business. The German company is scheduled to host its capital markets day on Tuesday.

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Swiss stocks

The Swiss stock market ended midweek trading with a significant decline. The leading SMI index fell by 1.3 per cent to 11,579 points. All 20 SMI stocks closed the trading session with losses. 34.89 (previously: 32.02) million shares were traded. Holcim shares slipped 1.3 per cent. The investigation against the group's own cement producer Lafarge over its Syria dealings continues in France. Logitech held up slightly better than the overall market, down 0.9 per cent to 58.32 francs. UBS upgraded the stock to "buy" from "neutral" and raised its price target to 81 from 73 francs.

International markets


European equities mostly drifted lower Wednesday as investors continued to weigh the Federal Reserve's commitment to fight inflation after the latest hawkish comments from Jerome Powell. In Paris, the CAC 40 and SBF 120 lost 1.2% and 1.12% respectively. In Frankfurt, the DAX 40 was down 1.26% and the FTSE 100 slipped by 1% in London. The Stoxx Europe 600 index fell 1.14% to 434 points. U.K. annual inflation reached a four-decade high of 9% in April as higher energy prices fed through households' utility bills, exacerbating a cost-of-living crisis that is squeezing consumers' real incomes. The consumer price index--which measures what consumers pay for some goods and services--increased at its fastest pace since 1982, a sharp pickup from the 7% inflation rate registered in March.Orpea fell by 19.2% after the publication of an investigation by Mediapart and the media Investigate Europe into dubious financial transactions by a key partner of the group in Luxembourg. Air France-KLM (+4.9%) and logistics group CMA CGM announced that they were joining forces to strengthen their offer in the booming air cargo business and also indicated that CMA CGM would take a stake in the Franco-Dutch air carrier of up to 9% in the long term. Elior (-1%) unveiled new targets for its 2021-2022 financial year and revised its medium-term forecasts after posting an operating loss in the first half. Euronext (+3.9%) reported higher first quarter results as trading volumes were supported by the international environment. Commerzbank's (+3.2%) strategy is to create the conditions for it to remain independent, the German bank said on Wednesday in reaction to press reports that it planned to discuss a possible merger with Italy's UniCredit (+0.6%) early this year.

United States

U.S. stocks fell sharply, with two of the major indexes suffering their worst day since 2020, as the latest set of disappointing earnings from large retailers raised investors’ fears of a recession. At the forefront of investors’ minds is decades-high inflation in the U.S., how much policy makers are willing to do to subdue it and what changes in monetary policy mean for economic growth. Federal Reserve Chairman Jerome Powell stated Tuesday that the central bank’s resolve in combating inflation shouldn’t be questioned, even if the steps required push up unemployment. The war in Ukraine and China’s zero-Covid strategy have also shaken up markets. The Dow Jones Industrial Average closed Wednesday down 1164.52 points, or 3.6%, to 31490.07, its lowest closing level since March 2021. The S&P 500 dropped 4%, or 165.17 points, to 3923.68, while the tech-focused Nasdaq Composite slid 4.7%, or 566.37 points, to 11418.15. The Dow and S&P recorded their worst percentage declines since June 11, 2020. The moves marked a U-turn from a day earlier, when technology shares led a rebound in markets. Major retailers said their profits were hurt by rising costs, sluggish sales and supply-chain disruptions. Shares of Target sank 25%, or $53.67, to $161.61 after the company posted quarterly earnings that missed analysts’ expectations, its worst one-day performance since Black Monday in 1987. Shares of Dollar Tree, Dollar General and Costco Wholesale recorded their largest single-day percentage declines in years—in Costco’s case, since 2003. The results are prompting Wall Street to wrestle anew with the idea that the global economy could be headed for a recession. Though that debate is far from settled, it has rattled stocks and other risky assets throughout the year, with the latest data illustrating the degree to which inflation has hit U.S. consumers. Walmart shares fell 6.8%, or $8.92, to $122.43, extending losses from Tuesday after the retailer reported that it is getting squeezed by higher food prices and other rising costs. Lowe’s fell 5.3%, or $10.21, to $183.82 after the home-improvement retailer posted a drop in first-quarter sales Wednesday.


On Thursday, the East Asian stock markets retreated following the Wall Street decline on Wednesday. While the Shanghai stock exchange displayed a very small minus, the losses at the other places in the region amount up to 2.3 per cent in Hong Kong. In Tokyo, the Nikkei 225 index lost 1.9 per cent to 26,392 points. Shares from the technology sector, which is considered particularly sensitive to interest rates, account for the biggest losses. In Hong Kong, for example, Meituan is down 3.3 per cent and Alibaba 5.1 per cent. Tencent slipped by 6.6 per cent. The social media and video games company reported a 51 per cent slump in first-quarter profits - the biggest since its IPO - due to government regulatory measures, a tepid ad business and high costs.


Long-dated U.S. government debt yields slipped across the board on Wednesday, as investors turned pessimistic on signs that inflation is taking a toll on corporate earnings and as they reassessed Federal Reserve Chairman Jerome Powell’s hawkish remarks from late Tuesday. The 10-year Treasury note fell 8 basis points to 2.888%. The yield of the 2-year bond remained almost stable.


Berenberg cuts target Credit Agricole to EUR 11.50 (12.30) - Hold

Citi restarts Vodafone with Buy - Target 165 p

Dt. Bank lifts Engie target to EUR 15.50 (14) - Buy

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