Research Market strategy
By Swissquote Analysts
Published on 02.06.2022
Morning news

CEO of Deutsche Bank’s DWS Resigns After Police Raid on Offices

Topic of the day

The chief executive of Deutsche Bank AG’s (+0.8%) asset-management subsidiary DWS Group (-6.2% in Frankfurt) will step down, the German lender said Wednesday, a day after a raid by German authorities on its Frankfurt offices. Asoka Woehrmann, who has run the group since late 2018, will resign after DWS Group’s annual general meeting on June 9. He will be succeeded by Stefan Hoops, currently head of Deutsche Bank’s corporate bank, on June 10. The leadership changes were made after around 50 agents of Frankfurt’s public prosecutor’s office, alongside German market regulator BaFin and the federal criminal police office, raided Deutsche Bank and DWS Group’s Frankfurt offices on Tuesday. The office raids were spurred by an inquiry into allegations of greenwashing - when firms and funds give misleading claims about their products or environmental, social and governance credentials - at DWS Group. Last year DWS was being investigated by U.S. authorities for disclosures around funds that say they use environmental, social or governance, or ESG, criteria to make investments. The investigation by the U.S. Securities and Exchange Commission and U.S. federal prosecutors started after the firm’s former head of sustainability said claims about the funds were overstated. Regulators have been increasing scrutiny of ESG funds as investors pour cash into the category. Last week, the SEC fined Bank of New York Mellon Corp. $1.5 million for misleading claims about ESG funds.

Swiss stocks

On Wednesday, the SMI lost 1.0 per cent to 11,494 points. Among the 20 SMI stocks, there were 17 price losers and 3 price winners. 29.52 (previously: 70.62) million shares were traded. ABB was the day's winner with a gain of 0.6 per cent. Among the financial stocks, UBS recorded a plus of 0.3 per cent. The share of competitor Credit Suisse, meanwhile, lagged behind with a minus of 1.0 per cent, after it had already slumped by around 5 per cent the previous day. Among the insurance stocks, Zurich Insurance lost 0.4 per cent and Swiss Life 0.3 per cent. The share of reinsurer Swiss Re fell by 1.0 per cent. The SMI was also dragged down by the index heavyweights. Nestle, for example, declined by 1.6 per cent. The shares of the two pharmaceutical companies Roche and Novartis slipped 1.1 and 0.8 per cent respectively. In the broader market, the share of the online pharmacy Zur Rose decreased by 2.4 per cent. In Germany, the e-prescription is only to be introduced gradually from the second half of the year.

International markets


European benchmarks suffered modest losses Wednesday, as worries about a possible recession, surging inflation and rising interest rates continue to hamper markets. The Stoxx Europe 600 index lost 1% to 438.7 points. In Paris, the CAC 40 and SBF 120 closed down 0.8% each. In Frankfurt, the DAX 40 gave up 0.3%, while in London the FTSE 100 gave up 1%. In the eurozone, the manufacturing PMI came in above expectations, although it fell to 54.6 in May from 55.5 in April. Specialist retailer Fnac Darty lost 4.7%, the biggest fall in the SBF 120. Bryan, Garnier & Co. lowered its recommendation on the stock from "buy" to "neutral" and its price target from 60 to 45 euros. Renault (+2.5%) and Stellantis (+1.6%) saw their sales in France fall by 7.5% and 9.8% respectively in May, in a market down 10.1%. Volkswagen (+2% in Frankfurt), the third largest player in the French market, saw its registrations fall by 29.35% last month. SAP gained 0.5 per cent after good figures from US competitor Salesforce. Saint Gobain was down 0.7 per cent following an acquisition: the takeover of the Canadian building products company Kaycan for 928 million dollars in cash was viewed positively by Davy analysts. The French construction group thus strengthened its position in North America. Rheinmetall climbed 2.0 per cent. The new major order in the automotive sector shows that not only the defence sector is promising, they said.

United States

U.S. stock indexes declined on the first day of June, after capping a volatile trading month. All three major U.S. indexes handed back morning gains. The S&P 500 lost 30.92 points, or 0.7%, to close at 4101.23. The Dow Jones Industrial Average fell 176.89 points, or 0.5%, to 32813.23, while the technology-focused Nasdaq Composite declined 86.93 points, or 0.7%, to 11994.46. Clear signaling from the Fed on the need for half-percentage-point interest-rate increases at the Fed’s June and July policy meetings has offered reassurance to traders recently. What happens after that, however, is less clear. Canada’s central bank increased its policy interest rate by a half-percentage point on Wednesday. More lightly staffed trading desks during the summer months could also spur volatility in the weeks ahead. Summer trading tends to have lower trading volumes and less liquidity, leading to more dramatic moves in stocks. In economic data, the Institute for Supply Management’s index of U.S. manufacturing activity rose to 56.1 in May from 55.4 in April. Economists surveyed by The Wall Street Journal had expected a decline to 54.5. A reading above 50 indicates expansion. Hiring demand in the U.S. remains strong as Americans continued to leave jobs at an elevated level. The Labor Department on Wednesday released figures showing that seasonally adjusted job openings fell to 11.4 million in April from an upwardly revised 11.9 million in March. The tight jobs market has driven up wages and contributed to historically high inflation. Salesforce surged $15.83, or 9.9%, to $176.07 after reporting revenue that outpaced analyst expectations, easing concerns about demand for its business software. The stock was the best performer in both the Dow and S&P on Wednesday, according to Dow Jones Market Data. Shares of Victoria’s Secret rose $3.68, or 8.9%, to $44.89 after recording a profit that exceeded analyst expectations. Shares of energy companies swung between gains and losses in volatile intraday trading. Occidental Petroleum gained $1.11, or 1.6%, to $70.42.


In Asia, major indexes broadly closed with losses. In Hong Kong, the index fell by 1.6 per cent, in Seoul by 1.1 per cent after the holiday break. In contrast, little is happening in Shanghai (+0.1%) and Tokyo. There, the Nikkei index lost 0.1 per cent to 27,436 points. In Hong Kong, shares from the interest-sensitive real estate sector are under increased pressure as interest rates continue to rise. Hang Lung Properties and New World Development slip over 5 per cent, Country Garden just under 3 per cent.


Yields on 2- through 10-year Treasury notes moved sharply higher on Wednesday, as traders priced in a 59% chance that the Federal Reserve will deliver yet another 50-basis-point rate hike in September. The 10-year US Treasury yield rose 8 basis points to 2.924%. The 2-year bond jumped 12 basis points to 2.662%.


Jefferies lifts target Rolls Royce to 100 (95) p - Hold
Jefferies reduces SLM Solutions to EUR 17 (22) - Buy
Berenberg cuts MBB target to EUR 170 (176) - Buy

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