Research Market strategy
By Swissquote Analysts
Published on 22.06.2022
Morning news

Supreme Court Declines to Hear Bayer Appeal on Roundup

Topic of the day

The Supreme Court on Tuesday declined to hear a bid by Bayer AG to end thousands of lawsuits alleging its weedkiller Roundup causes cancer, potentially costing the German conglomerate billions of dollars in legal settlements. Bayer has been mired in Roundup litigation since acquiring Monsanto, the product's original owner, in 2018. The German conglomerate, which maintains that Roundup is safe, has earmarked $16 billion to deal with litigation over the herbicide. Last year, Bayer asked the high court to invalidate a $25 million jury verdict in favor of Ed Hardeman, who says decades of using Roundup on his Northern California property caused his non-Hodgkin lymphoma, a type of cancer. The 2019 jury verdict in favor of Mr. Hardeman came in the first federal trial over whether Roundup's active ingredient glyphosate causes cancer. A Supreme Court ruling for or against Bayer bears not only on that case but on thousands of similar ones against the company. Bayer has said those Roundup cases should be dismissed because the product was cleared by federal regulators.

Swiss stocks

On Tuesday, the stock exchange in Switzerland closed just under par. After the mini-recovery the day before, investors became more cautious again. Even strong reports from Wall Street were unable to draw them out of their shells. Participants warned that market-determining factors such as inflation or the threat of recession were not out of the picture and volatility was likely to remain high. The SMI lost 0.1 per cent to 10,480 points. Among the 20 SMI stocks, there were 11 gainers and 9 losers. 29.61 (previously: 24.53) million shares were traded. The market was held back by Roche and Novartis, which each fell by 1 per cent. Nestle also did not make a significant contribution to a positive balance, and its share price hardly changed. In contrast, the cyclicals advanced. ABB rose 0.9 per cent, Holcim 1.1 per cent and Sika 3.4 per cent. Good watch export figures helped luxury goods shares to gain. Exports rose by 14 per cent in May. Swatch rose 0.9 per cent and Richemont 2 per cent.

International markets


European stock indices closed higher on Tuesday, supported by bargain buying and a rebound on Wall Street, which remained closed on Monday due to a US bank holiday. The Stoxx Europe 600 index gained 0.4 percent to 408.6 points, after having already gained 1 percent on Monday. In Paris, the CAC 40 and SBF 120 rose 0.8% and 0.7%, respectively. In Frankfurt, the DAX 40 gained 0.2% and the FTSE 100 in London gained 0.4%. Airbus SE is pushing against sanctions on Russian titanium sales, amid a flurry of restrictions on the export of other Russian goods ranging from vodka to steel. Airbus, the world’s largest commercial plane maker, is still importing hefty amounts of titanium from one of the country’s biggest exporters. It has publicly called for the European Union to hold off imposing sanctions on the metal, which is used to manufacture critical components of its aircraft, from landing gear and fasteners to the pylons that connect an engine to a wing. Assicurazioni Generali SpA is seeking a compromise candidate to fill a vacant seat on its board at a meeting on Wednesday, a source close to the company told Dow Jones Newswires. Italy’s largest insurer is looking to replace industrial tycoon Francesco Gaetano Caltagirone, who quit the board in May after mounting a rival slate to oust current management led by Chief Executive Officer Philippe Donnet.

United States

U.S. stocks rallied Tuesday off their worst week since March 2020, offering investors a reprieve from a recent stretch of whipsaw trading that had sent stocks and cryptocurrencies falling . The S&P 500 gained 89.95 points, or 2.4%, to 3764.79. The Dow Jones Industrial Average added 641.47, or 2.1%, to 30530.25. The Nasdaq Composite Index jumped 270.95 points, or 2.5%, to 11069.30. The U.S. stock market was closed Monday for the Juneteenth federal holiday. Meanwhile, investors await further commentary from Federal Reserve Chairman Jerome Powell when he testifies before Congress on both Wednesday and Thursday. Still, many market watchers are bracing for an economic downturn. In a note Monday, a team of Goldman Sachs economists increased their outlook for a U.S. recession, citing concerns that the Fed will feel compelled to respond forcefully to inflation data, even if economic activity slows. The team now sees a 30% probability of entering a recession over the next year, versus 15% previously, and a 25% probability of entering a recession in the second year if one is avoided in the first. U.S. stock market gains were broad-based, with all 11 of the S&P 500's sectors rising on Tuesday. Energy stocks led their peers. Diamondback Energy rose $9.99, or 8.2%, to $132.28. Exxon Mobil climbed $5.36, or 6.2%, to $91.48.


The previous day's confidence on the East Asian stock exchanges already evaporated on Wednesday. Tokyo is still the best performer, with a very small drop to 26,215 points, along with Sydney (-0.1%). In Japan, support comes from the yen, which continues to weaken against the dollar, improving the export prospects of Japanese companies. Once again, Seoul is down sharply by 1.7 per cent. Hong Kong's drop was also larger, at 1.2 per cent, whereas Shanghai lost only 0.3 per cent.


Tuesday's bullish mood came alongside a selloff in U.S. government bonds, sending the yield on the 10-year U.S. Treasury note higher. The yield on the benchmark note traded at 3.304%, up from 3.238% Friday. Yields and bond prices move in opposite directions.


HSBC lowers thet Pernod Ricard target to EUR 192 (197) – Hold
BoA lowers the Easyjet target to 780 (800) p – Buy
JPM cuts the AB Foods to Neutral (Overweight) – Target 1,900 (1,940) p

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