By Swissquote Analysts
Swiss Inflation Steady At 3.0%
Topic of the day
Switzerland's consumer price inflation remained unchanged in November, data from the Federal Statistical Office showed. Consumer prices rose 3.0 percent year-on-year in November, the same as seen in October. This was in line with economists' expectations. On a monthly basis, consumer prices remained stable in November, after a 0.1 percent rise in the previous month. Economists expected prices to remain unchanged. Prices for housing rentals, gas and fuels, and foreign and Swiss wine increased in November, while those of heating oil, fruits, vegetables and hotel accommodation declined. Data also showed that core consumer prices advanced 1.9 percent yearly in November and rose 0.1 percent from a month ago. The EU measure of the harmonized index of consumer prices, or HICP increased 2.9 percent annually in November and fell 0.1 percent from the prior month.
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The SMI gained 1.0 per cent to 11,238 points on Thursday. Among the 20 SMI stocks, there were 18 price gainers and two price losers. 86.43 (previously: 116.54) million shares were traded. The main winners were interest-sensitive technology stocks. In Switzerland, AMS-Osram (+2.8%), Logitech (+4.0), VAT (+2.3%) and Temenos (+2.5%) edged higher. Among the SMI stocks, Credit Suisse plunged to the next all-time low with a discount of 4.4 per cent. More and more investors bet on falling prices and built up short positions. About $1 billion, or 8 per cent, of shares and depositary receipts were sold short, according to data from S3 Partners. Richemont (-0.8%) suffered from profit taking after the previous day's rally. The SMI table was led by Lonza (+3.8%) and Sika (+3.6%). Technology group ABB reached a settlement with authorities in South Africa regarding corruption investigations and will pay around 150 million US dollars. The share price increased by 0.8 per cent. Roche (+0.7%), meanwhile, reported positive trial data. Zur Rose surged 14.9 per cent. The German health ministry intends to finally introduce e-prescriptions by mid-2023.
European stocks were higher on Thursday as traders continued to react to Jerome Powell's confirmation that a lower pace of Federal Reserve rate hikes to combat inflation was more likely in coming months. The main gainers in equities were the interest rate-sensitive technology stocks, chip stocks such as Infineon jumped by 2.6 per cent, ASML even by 3.8 per cent. The DAX added 0.6 per cent to 14,490 points and the Euro-Stoxx-50 was up 0.5 per cent to 3,985 points. Shares in online pharmacies were in rally mood: Shop Apotheke jumped over 13 per cent with the prospect of introducing e-prescriptions in mid-2023. Adidas rose 2.2 per cent and Puma 3.1 per cent. Above all, hopes of China's abandonment of its rigid zero-covide policy were the driving force here. German car stocks proved to be a burden: Mercedes and VW each fell by 0.4 per cent, BMW by as much as 1.4 per cent. Here, a study by the Center Automotive Research (CAR), which sees the electric car boom in Germany already coming to an end, put the brakes on. Partly due to the rise in electricity prices, sales are expected to shrink or even halve. Renault and Stellantis, on the other hand, closed slightly up. Shares in online food delivery services were sought after across Europe due to consolidation in the sector. Turkish delivery service Getir, for example, is said to be close to acquiring Berlin-based Gorillas. Delivery Hero rose 3.9 per cent and Hellofresh 6 per cent. In Amsterdam, Just Eat Takeaway increased by 4.3 per cent. Deutsche Börse added 1.4 per cent and reaching an all-time high. Bet-at-Home climbed 1.9 per cent thanks to higher-than-expected betting activity during the World Cup.
Stocks ended a choppy day with mixed results as investors weighed signs of cooling inflation against fears of how a recession could drag down corporate earnings. The S&P 500 was off 0.1% on Thursday, falling 3.54 points to 4076.57. Financial stocks fell. Investors cited concerns that banks might set aside more funds to cover potential credit losses, a move that cuts into their profits. The Dow Jones Industrial Average fell 0.6%, or 194.76 points, to 34395.01. The tech-heavy Nasdaq Composite Index gained 0.1%, or 14.45 points, to 11482.45. Data released Thursday morning showed households boosted spending in October while the Fed’s preferred inflation gauge—the personal-consumption expenditures price index—offered further signs that inflation is slowing. It comes ahead of Friday’s closely watched U.S. jobs report for November. Salesforce shares shed 8.3%, or $13.25, to $147.00, a day after co-chief executive Bret Taylor said he plans to step away. The enterprise-software maker’s sales rose 19% in the third quarter, but it guided for fourth-quarter revenue in a range mostly below what analysts had been expecting. Netflix stock rose 3.7%, or $11.42, to $316.95 after The Wall Street Journal reported that the streaming-entertainment company will expand a program to test its films and series with preview audiences before broad release. Cloud services group Snowflake (+7.9%) reported a lower-than-expected revenue forecast for the current quarter, but its CFO reassured analysts that the estimates were conservative. Meta Platforms (+2%) CEO Mark Zuckerberg commented at a New York Times conference that Apple (+0.5%) has too much power over the mobile app ecosystem. Retailer Kroger lost 1.5% despite raising its guidance for the third time this year as analysts fear the group will struggle in 2023 due to the slowing economy. Johnson & Johnson (+0.4%) announced on Wednesday that its chief executive, Joaquin Duato, would also become chairman of the pharmaceutical group's board of directors from next January. Digital security specialist Okta jumped more than 26% to $67.4 as the company promised to report its first profit in fiscal 2024, which begins at the end of January, despite economic uncertainties.
Stocks in Asia mostly fell, with Japan’s Nikkei 225 down 1.7% and the Hang Seng in Hong Kong declining 0.7%. China’s Shanghai Composite slipped by 0.3%. The Kospi in Seoul shed 1.4 per cent. There, the slightly lower-than-expected rise in consumer prices in November does not support sentiment. These rose by 5.0 per cent year-on-year, while analysts had expected an increase of 5.1 per cent.
Long-dated U.S. government debt yields slipped on Thursday after the Federal Reserve’s preferred inflation gauge showed price pressures easing, prompting traders to boost the chances of a smaller interest-rate hike in less than two weeks. The 10-year Treasury note fell by 19 basis points to 3.512% while the 2-year Treasury note declined by 13 basis points to 4.244%.
UBS lifts Kion target to EUR33 (29) - Buy
JPM raises Vantage Towers to Neutral (Underweight) - EUR 32 target
Citi lowers BT Group target to GBP 1.30 (1.85) - Neutral
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