Research Market strategy
By Swissquote Analysts
Published on 05.12.2022
Morning news

United Airlines Close to Deal for Dozens of Boeing 787 Dreamliners

Topic of the day

United Airlines Holdings Inc. is close to a deal to order dozens of Boeing Co. 787 Dreamliners, people familiar with the matter said. An agreement between the Chicago-based carrier and Boeing could be completed as soon as this month, some of these people said. If completed, the deal would be worth billions of dollars in revenue and mark a victory for the U.S. plane maker over its European rival Airbus SE, which had competed for the deal, people familiar with the matter said. Boeing has resumed deliveries of the Dreamliner after a nearly two-year freeze following a string of manufacturing and regulatory issues. Airbus has been dominating the market for smaller, narrow-body aircraft with its A320 family and expanding its lead over the rival 737 MAX since the latter’s previous grounding following two fatal crashes of that jet in 2018 and 2019. But Boeing has retained a larger share of the market for wide-body jets, which hold more passengers and are generally used for long-haul international routes. Dreamliners are popular among airlines for their fuel-efficiency and ability to make new direct routes profitable, bypassing the need to connect cities via a central hub. Each carries a list price of about $300 million before typical discounts, according to Boeing’s latest publicly available list prices.

Swiss stocks

The Swiss stock market on Friday wrote a finish to the two-day winning streak in which it had picked up more than 160 points or 1.5 percent. The SMI opened modestly lower on Friday and remained in the red throughout the session. The decline was in line with the rest of Europe as London and France also saw mild losses, while Germany posted slight gains. The markets got a lift from eagerly awaited employment data from the United States, which came in better than expected and allayed fears of a global economic slowdown. On Friday, the SMI slumped 40.07 points or 0.36 percent to finish at 11,198.13 after trading between 11,122.68 and 11,234.25. Among the actives, Credit Suisse skyrocketed 9.30 percent, while Sika stumbled 1.75 percent, Lonza Group retreated 0.98 percent, Zurich Insurance declined 0.82 percent, Nestlé dropped 0.63 percent, UBS Group shed 0.52 percent, ABB added 0.30 percent and Novartis rose 0.05 percent. On the corporate front, BorgWarner Inc. (BWA) said that it has acquired Swiss company Drivetek AG. The transaction has an enterprise value of up to 35 million Swiss francs, of which 25 million francs was delivered at closing. An additional 10 million francs could be paid in the form of contingent payments over the next three years.

International markets


The major European markets wound up mixed and little changed on Friday, shrugging off early profit taking after the markets hit six-month trading highs a day earlier. The markets got a lift from eagerly awaited employment data from the United States, which came in better than expected and allayed fears of a global economic slowdown. However, the data also tempered optimism for the outlook of interest rates; many pundits were expecting the FOMC to slow its pace of interest rate hikes, but this jobs report may allow them to continue raising rates at their current trajectory. For the day, Germany's DAX rose 39.09 points or 0.27 percent to finish at 14,529.39, while London's FTSE eased 2.26 points or 0.03 percent to close at 7,556.23 and the CAC 40 in France fell 11.72 points or 0.17 percent to end at 6,742.25. In Germany, Fresenius Medical Care jumped 2.47 percent, while Deutsche Post rallied 1.85 percent, Siemens Energy climbed 1.56 percent, Deutsche Bank collected 1.20 percent, Infineon Technologies sank 0.70 percent, Daimler Truck Holding dropped 0.62 percent, Heidelberg Cement added 0.31 percent, Deutsche Borse perked 0.17 percent and Deutsche Telekom eased 0.11 percent. In London, Associated British Foods surged 5.04 percent, while Rolls-Royce Holdings soared 3.92 percent, St. James Place spiked 1.50 percent, Prudential rallied 1.43 percent, Airtel Africa tumbled 1.38 percent, Scottish Mortgage Investment Trust skidded 1.08 percent, Frasers Group slumped 0.84 percent, Shell sank 0.69 percent, Centrica lost 0.57 percent, Haleon fell 0.51 percent and Vodafone was down 0.42 percent.

United States

U.S. stocks wobbled around the flatline Friday, retracing early losses after a stronger-than-expected jobs report cast doubt on how quickly the Federal Reserve will be able to slow down its pace of interest-rate increases. Stocks dropped and Treasury yields jumped early Friday on what seemed like a surprisingly strong jobs report. But investors picked up on some mixed signals in the report as they digested it, such as a decline in the average workweek for private-sector employees. The 10-year yield ended the day down. By Friday afternoon, the S&P 500 fell 4.87 points, or 0.1%, to 4071.70, after dropping more than 1% earlier in the day. The Dow Jones Industrial Average rose 34.87 points, or 0.1 %, to 34429.88 and the Nasdaq Composite fell 20.95 points, or 0.2%, to 11461.50. Normally, strong economic data should be good news for investors. But this year, money managers have seen a tight labor market as proof that the Fed will have to keep raising rates to slow down the economy. That, in turn, has weighed on markets. PayPal Holdings Inc. was the index's worst performer Friday, with shares falling 4.9%, or $3.87, to $74.66. Enphase Energy Inc. led gains, adding 7%, or $22, to close at $336.


While the Asian stock markets did not show a consistent trend across the board on Monday, the Chinese stock markets pushed ahead. Things have been much more volatile there for some time. In Shanghai and Hong Kong, the leading indices rose by 1.6 and 3.5 per cent respectively. The Shanghai Composite climbed above 3,200 points for the first time in over two months. Even extremely weak economic data from China do not dampen the good mood. The purchasing managers' index for the service sector, compiled by Caixin Media Co and S&P Global, fell to its lowest level since May and is now even deeper in contraction territory.


The yield on the benchmark 10-year Treasury ended the day lower at 3.517%, from Thursday's 3.525%. Bond yields rose earlier in the day after the jobs report before retracing.


UBS lowers Erste Bank target to EUR 42.50 (43) – Buy
Citi lowers Rio Tinto to Neutral (Buy) – Target 5,800 (6,000) p
JP Morgan raises IAG target to EUR1.70 (1.45) – Neutral

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