Research Market strategy
By Swissquote Analysts
Published on 12.09.2022
Morning news

Tesla Looking Into Building Lithium Refinery

Topic of the day

Tesla Inc. is looking into constructing a battery-grade lithium hydroxide refining facility that could support its electric-vehicle battery production. The car maker said in a form to the Texas Comptroller’s Office that it is looking to construct a plant with access to the Gulf Coast shipping channel, and is considering potential sites in Texas and Louisiana. Tesla said that it was still evaluating the feasibility of the project, but that construction on one potential site in Texas could begin as early as the fourth quarter of this year, with commercial operations up and running by the fourth quarter of 2024. The price of lithium has exploded in the past year amid a surge in demand for electric-vehicle batteries, of which the metal is a key component. Supply, meanwhile, has been pinched by a dearth of investments in new projects in the wake of a bear market and supply-chain bottlenecks. Chief Executive Elon Musk said earlier this year that constraints in the refining of materials in lithium-ion batteries had raised costs. In an April earnings call, he encouraged entrepreneurs to get into the lithium business, and said at the time that “Tesla will take action on those limiting factors.” In July, he reiterated his call for others to get into lithium refining, saying that the business has a high margin. “You can’t lose,” Mr. Musk said. “It’s a license to print money.” The company said it intends to use a more environmentally friendly process for making raw ore material usable for battery production, and ship its lithium hydroxide by truck or rail to Tesla’s various battery-manufacturing sites.

Swiss stocks

The Switzerland stock market closed on a firm note on Friday, in line with markets across Europe, as investors indulged in some hectic buying at several counters from across various sectors. The benchmark SMI ended with a gain of 109.92 points or 1.02% at 10,900.24, after hitting a high of 10,940.52 intraday. Logitech surged 4.15%, Richemont climbed 3.03% and Credit Suisse gained 2.82%. UBS Group, Lonza Group and SGS advanced 1.6 to 1.8%, while Nestle, Swiss Life Holding and Sika ended higher by about 1.3%. Among pharmaceutical companies, Novartis advanced by 0.7 per cent. Reports on the cancer drug Kisqali were positively received. According to new studies, the drug has a life-prolonging effect of one year, among others against breast cancer. This could raise hopes for a broader application base and thus increasing product sales. The share of competitor Roche lagged behind with a meagre gain of 0.1 per cent. In the Mid Price Index, AMS rallied nearly 7%. Tecan Group ended almost 4% up. Bachem Holding, VAT Group, Georg Fischer, Straumann Holding, Adecco and Temenos Group gained 2.4 to 3.2%.

International markets


European shares made solid gains on Friday with investor attention still focused on inflation and central bank monetary policy. The pan European Stoxx 600 climbed 1.52%. The U.K.'s FTSE 100 surged 1.23%, Germany's DAX and France's CAC 40 gained 1.43% and 1.41%, respectively. Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Greece, Iceland, Ireland, Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden and Turkiye all ended higher, posting sharp to moderate gains. Banks, miners and energy firms were among the prominent gainers. While the hike in interest rates lifted bank stocks, shares from mining and energy sectors climbed on firm commodity prices. In the UK market, Centrica, Anglo American Plc, Antofagasta, Glencore, Standard Chartered, Croda International Group, WPP, DCC, Scottish Mortgage, Fresnillo and Hargreaves Lansdown gained 3 to 5%. In Paris, Faurecia soared more than 7%. Atos gained about 5.5% and WorldLine climbed nearly 5%. Schneider Electric, Valeo, Accor, Societe General, BNP Paribas, Credit Agricole, Unibail Rodamco, STMicroElectronics, AXA and Capgemini advanced 2 to 5%. In the German market, HelloFresh surged more than 4.5%. Fresenius, Fresenius Medical Care, Deutsche Telekom, Deutsche Bank, Zalando, Infineon Technologies, Continental, Covestro, Daimler, Deutsche Post, Puma, BASF, E.ON and Adidas gained 2 to 4%. On the economic front, France industrial production fell for the first time in three months in July, data published by the statistical office Insee showed. Industrial production declined 1.6% from June, when output was up 1.2%. Likewise, manufacturing output decreased 1.6% on month, in contrast to the 0.9% increase in June.

United States

U.S. stocks rose Friday and posted their first weekly gain in a month, offering a reprieve to a market that had been weighed down by fears of tightening monetary policy. Stocks began the week lower but then made up ground over the following days, with shares of banks, manufacturers and consumer-discretionary companies helping lead the charge. Analysts said at least some of the recovery seemed to be fueled by investors looking for bargains after three consecutive weekly losses that had wiped out much of the market’s summer rally. Moreover, earnings results have largely pointed to resilience among U.S. corporations. The Dow Jones Industrial Average added 377.19 points, or 1.2%, to 32151.71. The S&P 500 gained 61.18 points, or 1.5%, to 4067.36 and the Nasdaq Composite rose 250.18 points, or 2.1%, to 12112.31. For the week, the Dow rose 2.7%, while the S&P 500 climbed 3.6% and the Nasdaq gained 4.1%. Earnings drove some of the Friday’s bigger moves. Shares of RH, formerly known as Restoration Hardware, jumped $11.85, or 4.5%, to $273.56 after the upscale home retailer reported better-than-expected results for the second quarter. Grocery-chain Kroger added $3.58, or 7.4%, to $51.94 after raising its guidance for full-year earnings. Steel stocks showed a substantial move to the upside over the course of the session, resulting in a 5 percent spike by the NYSE Arca Steel Index. Significant strength was also visible among oil service stocks, as reflected by the 4.4 percent surge by the Philadelphia Oil Service Index. The rally by oil service stocks came amid a sharp increase by the price of crude oil, with crude for October delivery jumping $3.25 to $86.79 a barrel. Gold stocks also saw considerable strength amid an increase by the price of the precious metal, driving the NYSE Arca Gold Bugs Index up by 2.9 percent. Computer hardware, airline and semiconductor stocks also showed notable moves to the upside amid broad based buying interest.


In Asia, major indexes broadly closed with gains. However, several markets are closed for public holidays, such as China (mainland and Hong Kong) and South Korea. In Tokyo, the Nikkei-225 added 1.0 per cent - driven by stocks from the electronics and airline sectors. Japan Airlines and ANA Holdings rose by 3.1 and 2.8 per cent respectively.


U.S. government debt yields rose on Friday, with the two-year yield rising to its highest level since 2007 as Federal Reserve officials suggested the central bank would likely hike its benchmark rate by another 75 basis points at its meeting later this month. The 10-year Treasury note was yielding 3.331%, up from 3.317% on Thursday night. The 2-year Treasury note, which is more sensitive to changes in Fed policy in the short term, also rose to 3.561% from 3.504% on Thursday evening.


Barclays lowers Swiss Re target to CHF 83 (85)/Equalw. - Trader
Jefferies lifts Reckitt Benckiser target to 5,600 (5,425) p - Underp.
Liberum lowers Asos target to 700 (900) p - Hold

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