Research Market strategy
By Swissquote Analysts
Published on 22.11.2022
Morning news

Walt Disney Names Bob Iger CEO, Replacing Bob Chapek

Topic of the day

Walt Disney Co.'s board of directors replaced Chief Executive Bob Chapek with Robert Iger, the company's former chairman and CEO who left the company at the end of last year. "The board has concluded that as Disney embarks on an increasingly complex period of industry transformation, Bob Iger is uniquely situated to lead the company through this pivotal period," said Susan Arnold, chairman of Disney's board, in a statement. "We thank Bob Chapek for his service to Disney over his long career, including navigating the company through the unprecedented challenges of the pandemic," she added. The surprise change comes at a tumultuous time for Disney. This month, the company reported weaker-than-expected fourth quarter financial results, killing the momentum built up over a strong year that saw record revenue and profits in multiple divisions, especially the one that includes theme parks.

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Swiss stocks

The Swiss market, which recovered a bit after a weak start and moved across the flat line till well past noon on Monday, climbed higher in late afternoon trade and eventually ended the session modestly higher. The benchmark SMI ended with a gain of 39.55 points or 0.36% at 11,085.04. The index, which dropped to 11,019.98 at the start, climbed to a high of 11,101.92. Worries about geopolitical tensions and a surge in Covid-19 cases in China weighed on sentiment and limited market's upside. Novartis climbed about 1.75% and Swisscom gained 1.62%, while Alcon and Nestle advanced 1.3% and 1.15%, respectively. Zurich Insurance Group and Lonza Group gained 0.81% and 0.71%, respectively. ABB advanced 0.4%. The company announced that its unit ABB E-mobility has signed a pre-IPO private placement of around 200 million Swiss francs for newly issued shares. Credit Suisse drifted down 2.5% and Givaudan ended 2.22% down. Sonova ended nearly 2% down, while Partners Group, Richemont and Geberit lost 1.2 to 1.7%. Among the stocks in the Swiss Mid Price Index, Bachem Holding climbed 7.2% and Tecan Group surged 3.3%. Julius Baer and Barry Callebaut gained 1.56% and 1.4%, respectively.

International markets

Europe

European stocks closed on a weak note on Monday as investors stayed wary of making significant moves due to concerns over a surge in Covid-19 cases in China, and rising geopolitical tensions. Lingering worries about inflation and possibility of central banks continuing with their aggressive rate hikes weighed as well. The pan European Stoxx 600 edged down 0.06%. Germany's DAX drifted down 0.36%, while the U.K.'s FTSE 100 and France's CAC 40 ended lower by 0.12% and 0.15%, respectively. Switzerland's SMI gained 0.36%. Among other markets in Europe, Austria, Belgium, Finland, Netherlands, Norway, Poland, Russia and Sweden closed weak. Denmark, Greece, Ireland and Turkiye closed higher, while Czech Republic, Iceland, Portugal and Spain ended flat. Fears of a potential escalation in the Russia-Ukraine conflict following recent shelling around the Zaporizhzhia nuclear power plant hurt sentiment. The International Atomic Energy Agency has called for 'urgent measures to help prevent a nuclear accident' in the Russian-occupied facility, of which it said parts were damaged but showed no signs of a radiation leak. Mining and oil stocks fell sharply on weak commodity prices amid worries about outlook for demand due to rising Covid cases in China and imposition of stringent restrictions in several cities in the country. In the UK market, Harbour Energy tumbled more than 8%. Ocado Group ended nearly 5% down. BP, M&G, Entain, CP, Shell, Prudential, Anglo American Plc and Rio Tinto lost 2 to 4%.

United States

U.S. stocks fell Monday as investors worried about a rise in Covid-19 infections overseas and the state of the economy at home heading into the key holiday season. The Dow Jones Industrial Average slipped 45.41 points, or 0.1%, to 33700.28, while the S&P 500 dropped 15.40 points, or 0.4%, to 3949.94. The Nasdaq Composite lost 121.55 points, or 1.1%, to 11024.51. Investors had hoped that signs of easing Covid-19 containment measures in China would allow for economic growth to pick up, also benefiting the global economy. Several Chinese cities had said they would no longer carry out mandatory mass testing and lifted the requirement for residents to show proof of a recent negative test to enter public places. On the data front, investors were anticipating a quiet week with the Thanksgiving holiday on Thursday. The biggest event on the economic calendar is Wednesday's release of the minutes of last Federal Reserve meeting. In corporate news, shares of Walt Disney's jumped $5.78, or 6.3%, to $97.58 after the entertainment giant replaced Chief Executive Bob Chapek with Robert Iger, the company's former chairman and CEO. Shares of Imago BioSciences more than doubled, rising $18.19 to $35.59 after Merck agreed to acquire the developer of bone-marrow disease drugs for $1.35 billion. Carvana stock fell $1.01, or 13%, to $7.05. The used-car dealer was a pandemic winner but is now rushing to conserve cash as once-plentiful financing options dry up and its business deteriorates

Asia

The stock markets in East Asia and Australia are showing a mixed trend on Tuesday. Among other things, participants point to the slightly negative signals from Wall Street. The Shanghai Composite is volatile. After initial declines, it is currently up 0.8 per cent. Here, the focus continues to be on the development of the Corona infections. Beijing closed parks and museums on Tuesday, while Corona mass tests are being carried out again in other Chinese cities.

Bonds

In U.S. bond markets, the yield on the benchmark 10-year Treasury note rose to 3.825% from 3.817% Friday. Yields and prices move inversely.

Analysis

Deutsche Bank raises Richemont target to CHF 150 (145) – Buy

Citi raises Julius Baer target to CHF 64.50 (64) – Buy

CS raises RWE target to EUR 49 (47) – Outperform

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