By Swissquote Analysts
Walgreens Sales Fall as Demand for Covid Vaccines Wanes
Topic of the day
Walgreens Boots Alliance Inc., faced with shrinking demand for Covid-19 tests and vaccines, is racing to hire more pharmacists and build up its burgeoning healthcare business in an effort to replace lost revenue. The nation’s second-largest U.S. pharmacy chain by locations said sales fell 1.5% in the recently ended quarter, as it vaccinated roughly half as many people in the U.S. as a year prior. Fewer people sought in-store Covid tests, as well, opting instead for take-home test kits, which have smaller profit margins, the company said. Walgreens Chief Executive Roz Brewer, in a call with analysts, said she is confident the company can make up for the declines by improving sales at U.S. drugstores and through recent acquisitions of primary- and urgent-care clinics. Thousands of the company’s drugstores have been operating with reduced hours amid a shortage of pharmacists. “We’re moving in the right direction,” she said Thursday. Walgreens raised full-year sales guidance to a range of $133.5 billion to $137.5 billion and maintained its earnings outlook.
The Switzerland stock market ended notably lower on Thursday after languishing in negative territory right through the day's session. Hawkish Fed minutes and concerns about the impact of higher interest rates on global economic growth weighed on the market. The benchmark SMI ended with a loss of 82.88 points or 0.74% at 11,057.39. The index moved in a tight range between 11,048.09 and 11,112.50. Roche Holding ended lower by 2.3%. Zurich Insurance Group and Sika both drifted down by about 1.75%. Givaudan and Novartis both lost around 1%. Nestle, Richemont and Swiss Re edged down marginally. Sonova climbed 1.63% and Alcon gained 1.32%. Partners Group, Geberit and Swisscom posted moderate gains. In the Mid Price Index, Zur Rose ended 4.3% down. Galenica Sante lost 1.6%, while Bachem Holding, Clariant, Baloise Holding, Helvetia and Swiss Prime Site ended lower by 1 to 1.3%. Adecco, VAT Group, SIG Combibloc, Georg Fischer, Flughafen Zurich and Schindler Ps gained 1 to 1.75%.
European stocks closed lower on Thursday, weighed down by strong U.S. jobs data and hawkish Federal Reserve minutes. The pan European Stoxx 600 ended down 0.2%. Germany's DAX drifted down 0.38% and France's CAC 40 dropped 0.22%, while the U.K.'s FTSE 100 climbed 0.64%. Among other markets in Europe, Belgium, Denmark, Netherlands, Russia and Turkiye ended weak. Austria, Czech Republic, Greece, Ireland, Norway, Portugal, Spain and Sweden closed higher, while Iceland and Poland ended flat. In the UK market, Next surged nearly 7% after the clothing retailer raised its pre-tax profit forecast for the current year, defying gloom about weakening consumption and the U.K.'s cost-of-living crisis. Standard Chartered climbed 6.8%. Anglo American Plc, Associated British Foods, HSBC Holdings, Antofagasta, Frasers Group and JD Sports Fashion rallied 3 to 4.5%. IAG, Kingfisher, BT Group, Barclays, Whitbread, Lloyds Banking Group, Natwest Group, Sainsbury (J) and IHG gained 1.7 to 3%. Pearson tumbled nearly 6%. Croda International dropped 3.3% and Haleon ended nearly 3% down. Segro, Fresnillo, Rentokil Initial, Prudential, Aviva, Unite Group and Experian also ended notably lower. In Paris, Eurofins Scientific, Sanofi, Carrefour, Vivendi, LVMH, Teleperformance and AXA lost 1 to 2.5%. ArcelorMittal climbed nearly 3%. Saint Gobain gained about 2.3%, while Stellantis, Kering, Renault, STMicroElectronics and Bouygues gained 1 to 1.5%. In the German market, Linde ended nearly 4% down. Merck lost about 2.5% and E.ON dropped 1.82%. Vonovia, Symrise, Deutsche Bank and Deutsche Wohnen also ended notably lower. Zalando gained nearly 3%. BASF, Puma, Porsche Automobil, Volkswagen, Deutsche Telekom, Continental, BMW, MTU Aero Engines, Sartorius, Henkel and HelloFresh advanced 1 to 2%.
U.S. stocks fell Thursday, after strong labor-market data bolstered the case for the Federal Reserve to remain tough. The S&P 500 dropped 44.87 points or 1.2% to 3808.10. The Dow Jones Industrial Average declined 339.69 points, or 1%, to 32930.08. The Nasdaq Composite fell 153.52 points, or 1.5%, to 10305.24. All the indexes had notched gains on Wednesday. Of the S&P 500's 11 sectors, only energy stocks ended the day higher, gaining 2%. Real estate, utilities and information technology stocks were the biggest losers. Both inflation and economic growth have shown signs of slowing, lifting hopes that the Fed and other central banks could soon moderate or end their programs of lifting interest rates. Some investors, however, worry that inflation won't be returning to the Fed's target of 2% soon. Consumer prices rose by 7.1% in November from the year before, down sharply from 7.7% in October. U.S. weekly jobless claims fell by 19,000 to 204,000 in the final week of 2022. Economists surveyed by The Wall Street Journal had expected 223,000 claims. Meanwhile, ADP data showed private-sector hiring accelerated in December. Shares of Silvergate Capital fell $9.38, or 43%, to $12.57 after the Journal reported that the collapse of crypto exchange FTX forced the bank to sell assets at a steep loss to cover about $8.1 billion in withdrawals. Conagra's stock rose $1.32, or 3.4%, to $39.97. The food company said it expects higher sales and earnings this year while reporting a revenue increase.
The stock markets in East Asia and Australia are unimpressed by the weak trend on Wall Street at the end of the week and continue to rise for the most part. In Tokyo, the Nikkei 225 index gains 0.5 percent to 25,961 points, Seoul is up 1.5 percent and China's stock markets are showing resilience. Sydney went into the weekend with a 0.7 per cent gain.
Yields on U.S. Treasury bonds climbed after trending lower in recent days. The yield on the benchmark 10-year Treasury note rose to 3.720% from 3.709% on Wednesday.
JP Morgan raises Swisscom target to CHF 702 (674) – Neutral
JP Morgan lowers Telefonica target to 2.50 (2.70) – Underweight
UBS raises target for Air Liquide to EUR 155 (148) – Buy
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