Research Market strategy
By Swissquote Analysts
Published on 06.12.2022
Morning news

Credit Suisse’s Investment Bank Spinoff Attracts Saudi Crown Prince

Topic of the day

Saudi Arabia’s crown prince and a U.S. private-equity firm run by Barclays PLC’s former chief executive are among investors preparing to invest $1 billion or more into Credit Suisse’s new investment bank, people familiar with the matter said. Crown Prince Mohammed bin Salman is considering an investment of around $500 million to back the new unit, CS First Boston, and its CEO-designate, Michael Klein, some of the people said. Additional financial backing could come from U.S. investors including veteran banker Bob Diamond ‘s Atlas Merchant Capital, people familiar with that potential investment said. Credit Suisse previously said it had $500 million committed from an additional investor it hasn’t named. Credit Suisse has received a number of proposals from investors interested in CS First Boston. Credit Suisse Chairman Axel Lehmann at a conference on Thursday said it has other firm commitments in addition to the $500 million from the unnamed investor. The bank hasn’t received a formal proposal from any Saudi entity, some of the people familiar with the matter said.

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Swiss stocks

The Switzerland stock market ended flat on Monday after swinging between gains and losses in cautious trade. Worries about economic slowdown and uncertainty about the outlook for Federal Reserve's interest rate weighed on sentiment. The benchmark SMI ended with a loss of 3.46 points or 0.03% at 11,194.67. The index moved in a tight band, scaling a low of 11,170.93 and a high of 11,239.76 intraday. Logitech, Sonova, Givaudan, Sika and Geberit lost 1.42 to 1.83%. Nestle ended 1.6% down after the Swiss FMCG company announced that it will restrict its marketing of high sugary products to kids under the age of 16. Alcon, Lonza Group and Partners Group ended lower by 1.1 to 1.22%. Credit Suisse rallied 2.85%. Novartis advanced nearly 2% after the pharmaceutical company said a prostate treatment that delivers radiation to specifically targeted cancer cells helped patients in a study that will be used for U.S. regulatory approval. UBS Group climbed 1.68%, while Swiss Re ended nearly 1% up. Roche Holding and Swiss Life Holding posted modest gains. In the Mid Price Index, Barry Callebaut ended more than 3% down. AMS, Straumann Holding, Lindt & Spruentli, Temenos Group and Georg Fischer lost 2 to 2.7%. Adecco, Bachem Holding, Schindler PS and Schindler Holding also ended notably lower. VAT Group ended stronger by about 2.4%. Zur Rose climbed nearly 2%, while Tecan Group and PSP Swiss Property gained 0.73% and 0.66%, respectively.

International markets


European stocks closed broadly lower on Monday with investors turning cautious after data showed the euro zone economy is slipping into a recession. Investors also reacted to news about the Chinese government's decision to relax some Covid restrictions. Uncertainty about the outlook for U.S. interest rates following last week's strong non-farm payrolls data also contributed to the weak sentiment. The pan European Stoxx 600 drifted down 0.41%. Germany's DAX dropped 0.56% and France's CAC 40 fell 0.67%, while the U.K.'s FTSE 100 advanced 0.15%. Switzerland's SMI edged down 0.03%. Among other markets in Europe, Belgium, Ireland, Netherlands and Turkiye closed weak. Austria, Czech Republic, Denmark, Iceland, Norway, Poland, Portugal and Sweden ended higher, while Finland, Greece and Spain settled flat. In the UK market, Entain, Hargreaves Lansdown, M&G, Burberry Group, WPP, Sage Group, Persimmon, Pearson, Halma, Kingfisher, Ocado Group and Melrose Industries lost 1 to 2.5%. Prudential rallied 5.3%. Rio Tinto, Anglo American Plc, Frasers Group and Compass Group gained 1 to 1.6%. Glencore shares moved higher after the company entered into a $180 million corruption settlement with DRC. In Paris, Teleperformance, Orange, Bouygues, Capgemini, WorldLine, Kering and Dassault Systemes lost 2 to 3.1%. Alstom gained about 1%, while Unibail Rodamco and Saint Gobain posted modest gains. In the German market, Bayer declined nearly 3%. Symrise, Deutsche Boerse, Covestro, Qiagen, Adidas, Sartorius, BASF, Fresenius and Henkel ended lower by 1 to 2.3%.

United States

Stocks tied closely to the health of the U.S. economy dropped sharply Monday despite strong data, a sign of the intense market fixation with the risk that the Federal Reserve will continue to raise interest rates throughout the next year. Shares of big regional banks, which are particularly sensitive to the economic outlook, were among the biggest decliners. PNC Financial Services dropped 6.8%, Citizens Financial Group fell 5.3% and Regions Financial declined 5.1%. Fed officials have signaled plans to raise their benchmark interest rate by 0.5 percentage point at their meeting next week, which would mark a slowdown from recent meetings. But elevated wage pressures could lead them to continue lifting it to higher levels than investors currently expect, The Wall Street Journal reported Monday. The S&P 500 dropped 72.86 points, or 1.8%, to 3998.84, pulling back after a November rally that was driven by hopes that the Fed would slow down its pace of rate increases. The Dow Jones Industrial Average declined 482.78 points, or 1.4%, to 33947.10 and the Nasdaq Composite lost 221.56 points, or 1.9%, closing at 11239.94. The Institute for Supply Management's reading on the services sector in November came in at 56.5, up from 54.4 in October and above expectations of 53.7. Factory orders in October were up 1%, according to the Commerce Department, above market expectations for a rise of 0.7%. Those data points followed Friday's relatively strong jobs report. In corporate news, shares of Tesla fell $12.41, or 6.4%, to $182.45 after Bloomberg and Reuters reported the electric-vehicle maker plans to cut production at its Shanghai plant in December.


The Asian stock exchanges are mostly down moderately across the board on Tuesday and are generally reacting rather calmly to the significant losses on Wall Street the previous day. While the Shanghai Composite lost 0.2 per cent, the HSI in Hong Kong fell 1.2 per cent. However, the HSI had also gained more the previous day.


In the U.S. bond market, the yield on the 10-year U.S. Treasury note rose to 3.598%, from 3.502% Friday. Yields, which move inversely to prices, had fallen for four straight weeks.


Citi raises Vitesco target to EUR 71 (70) – Buy

HSBC raises Volkswagen target (preferred shares) to EUR 203 (188) – Buy

HSBC lowers Burberry to Reduce (Hold)

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