Research Market strategy
By Swissquote Analysts
Published on 23.05.2022
Morning news

Ukrainian President Zelensky to Address Davos Forum

Topic of the day

Ukrainian President Volodymyr Zelensky is scheduled to address the World Economic Forum gathering in Davos via video on Monday. The speech comes as Ukrainian leaders say the country needs a massive increase in weapons supplies to continue resisting Russia, to liberate occupied territories and to try to unblock shipping lanes. Mr. Zelensky said Sunday night that he is preparing for a week of maximum diplomatic activity as Ukraine looks for ways to increase the volume of its agricultural exports and fuel imports. He spoke Sunday with U.K. Prime Minister Boris Johnson in addition to meeting with Polish President Andrzej Duda in Kyiv. Mr. Johnson resolved to redouble efforts to provide food and humanitarian aid to Ukrainians and ensure that the country is able to export to the rest of the world, according to his spokesperson. Mr. Duda is currently looking to help Ukraine move its grain to international markets, circumventing Russia's naval chokehold in the Black Sea. He is traveling to Egypt, the world's largest wheat importer, next month to help coordinate those shipments.

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Swiss stocks

After the last two trading days with losses, the Swiss stock market ended the session on Friday with an unchanged trend. The SMI ended trading little changed at 11,309 points. For the week, the index was down 2.9 per cent. Among the 20 SMI stocks, there were 14 price gainers and 6 price losers on Friday. 41.8 (previously: 41.94) million shares were traded. Among individual stocks, Richemont shares fell 13.1 per cent following results for the 2021/22 financial year. "Full-year profitability was disappointing, but strong demand is encouraging," said Jean-Philippe Bertschy at Vontobel. All of the luxury group's businesses reported margins below expectations as marketing and communications spending increased, he said. However, he said the strong sales growth in the jewellery and watches divisions was a sign of good demand for the group's products. In the aftermath, Swatch shares were down 3.2 per cent.

International markets


European equity indices ended higher on Friday as investors took comfort from an unexpected cut in a benchmark interest rate by the People's Bank of China (PBOC). The Stoxx Europe 600 index gained 0.7% to 431.1 points. In Paris, the CAC 40 and SBF 120 gained 0.2% and 0.3%, respectively. In Frankfurt, the DAX 40 rose by 0.7%, and the FTSE 100 in London gained 1.2%. For the week as a whole, the Stoxx Europe 600 lost 0.6%. Mercedes-Benz Group Chief Executive Ola Källenius puts the problem well: “Even though everybody knows that Mercedes is kind of the elite original luxury brand in the car industry, perhaps the stock hasn’t been viewed in that category,” he told Heard on the Street. But bridging that perception gap isn’t as easy as it might sound. Germany’s Finance Minister Christian Lindner warned that a weak euro might be driving up inflation in Europe and encouraged the European Central Bank to increase interest rates, an unusual step that underlines the growing concerns in Europe’s largest economy about the rapid pace of price increases. The euro has fallen close to parity against the dollar in recent weeks and is currently trading at around $1.05, down from about $1.22 a year ago. That partly reflects the relative weakness of the eurozone economy, which has been squeezed by surging energy prices, as well as the anticipation of further interest-rate increases by the Federal Reserve.

United States

A weekslong stock selloff took on new intensity Friday, nearly ending the bull market that began after the start of the pandemic. Stocks rose at the open, then reversed course, falling throughout most of the turbulent session. At one point, the S&P 500 slid so far it was on track to close at least 20% below its January peak -- what would have been considered a bear market. A comeback in the final hour of the trading day pushed the index higher, with the S&P 500 ending up 0.57 point, or less than 0.1%, at 3901.36; at its intraday low, it was down 2.3%. The Dow Jones Industrial Average finished up 8.77 points, also less than 0.1%, to 31261.90. The tech-focused Nasdaq Composite fell 33.88 points, or 0.3%, to 11354.62. It has been decades since stocks have fallen for such a prolonged period. The Dow industrials notched their eighth straight weekly loss, their longest such streak since 1932, near the height of the Great Depression. The S&P 500 and Nasdaq had their seventh straight weekly loss, their longest such streak since 2001, after the dot-com bubble burst. All three indexes finished the week down at least 2.9% Shares of Ross Stores slumped $20.83, or 22%, to $71.87 after it posted a decline in sales and said it expects another drop in sales for the current quarter. The retailer, like many other businesses, said its results were hurt by rising costs for transportation and labor. Agricultural equipment maker Deere dropped $51.31, or 14%, to $313.31 even though it posted higher sales and profit and raised its profit forecast for the year. The company said supply-chain issues disrupted production levels and deliveries, and that higher costs for materials and freight transportation are squeezing its profit margins.


At the start of the new week, no uniform trend can be discerned on the stock markets in East Asia and Australia. While in Tokyo encouraging quarterly reports from Japanese companies have acted as a mood booster, fears that high inflation and rising interest rates are clouding the outlook for the global economy weigh on the Chinese stock markets. In Shanghai, the composite index falls by 0.5 per cent. Shares of liquor producers in particular are sold. Wuliangye Yibin falls 2.7 per cent in Shenzhen and Kweichow Moutai drops 1.3 per cent in Shanghai.


U.S. Government bonds rallied Friday, benefiting from investors flocking toward assets that tend to perform well in times of economic stress. The yield on the benchmark 10-year U.S. Treasury note fell to 2.785% Friday from 2.854% on Thursday. Bond prices rise when yields fall.


BoA lowers Alstom target to EUR 16 (17) – Underperform

JPM raises Generali target to EUR 23.50 (23) – Overweight

Barclays raises Südzucker to EUR 13.10 (12.50) – Equalweight

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