By Swissquote Analysts
Nike Sales Jump as It Works Through Inventory Glut
Topic of the day
Nike Inc. made progress working through the inventory glut that squeezed the sneaker maker last year, reporting a 14% jump in quarterly sales and raising its revenue growth target. The sportswear company said its inventory increased 16% in the quarter ended Feb. 28 compared with the same period a year ago. Inventories had swelled by more than 40% in each of the prior two quarters. The company ended February with $8.9 billion of inventories, down from $9.3 billion at the end of November. “We are increasingly confident that we will exit the year with healthy inventories across the marketplace,” Nike finance chief Matthew Friend said Tuesday on a conference call with analysts. Higher markdowns once again hurt profit margins, though Nike’s quarterly earnings came in above Wall Street’s expectations. The company said net income in the quarter fell 11% to $1.24 billion. Recent unrest in the banking sector, along with elevated inflation and rising interest rates, has weighed on U.S. consumer spending. Spending at retailers declined in February, according to the Commerce Department, and consumer sentiment fell in March for the first time in four months, according to a University of Michigan survey.
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The Swiss stock market ended on a strong note on Tuesday, in line with European markets, as investors continued to cheer the steps taken by governments and central banks to rescue troubled U.S. and European banks. Investors also digested Swiss exports data. The benchmark SMI ended with a gain of 148.94 points or 1.4% at 10,792.58, off the day's high of 10,814.48. UBS Group shares soared 12.1% and Credit Suisse surged 7.3%. On Sunday, UBS agreed to take over the Credit Suisse in an all-share deal worth $3.25 billion under pressure from the Swiss authorities. Credit Suisse, the second largest in Switzerland, had been facing issues due to scandals, irregularities and management troubles for a long time. Partners Group gained nearly 7%. Swiss Life Holding and Swiss Re both ended higher by about 4%. Richemont, Zurich Insurance Group, Holcim and ABB gained 1.8 to 3%. Alcon and Sika also ended sharply higher. Givaudan drifted down 2.86% and Nestle shed nearly 1%. In the Mid Price Index, Helvetia and Swatch Group gained 4.5% and 4.05%, respectively. Temenos Group surged 3.4% and Julius Baer gained 3.15%. Baloise Holding climbed 3.5% and Georg Fischer gained 2.2%, while Dufry surged nearly 2%. AMS, VAT Group, Zur Rose and Kuehne & Nagel also ended with notable gains.
European stocks closed sharply higher on Tuesday amid easing concerns about the health of the banking sector following the efforts by governments and central banks to rescue distressed banks in the U.S. and Europe. Assurances by ECB President Christine Lagarde and U.S. Treasury Secretary Janet Yellen about capital and liquidty levels of the banks helped as well. Investors looked ahead to the Federal Reserve's monetary policy announcement. The Fed is widely expected to raise interest rate by 25 basis points on Wednesday. The pan European Stoxx 600 climbed 1.36%. The U.K.'s FTSE 100 gained 1.82%, Germany's DAX surged 1.75% and France's CAC 40 gained 1.42%, while Switzerland's SMI advanced 1.4%. Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Greece, Iceland, Ireland, Netherlands, Norway, Poland, Portugal, Spain and Sweden closed with strong gains. Turkiye ended sharply lower, while Russia settled flat. Bank stocks were among the prominent gainers as fears of a widespread contagion risk eased after the takeover of Credit Suisse. Shares of automakers were in demand after data showed an increase in car registrations in February. In the UK market, Rolls-Royce Holdings rallied nearly 6.5%. Natwest Group, Prudential, Ashtead Group, Barclays, Standard Chartered, Lloyds Banking Group, Flutter Entertainment and Sainsbury (J) gained 4 to 6%. Schrodders, Burberry Group, Melrose Industries, ABRDN, Weir Group, Next, Whitbread, BP, Shell, JD Sports Fashion, Beazley, IAG, 3i Group, M&G and Legal & General surged 3 to 4%. In the German market, Commerzbank climbed more than 7%. Deutsche Bank surged nearly 6%.
Increased investor optimism about the banking system helped lift U.S. stocks Tuesday, with shares of regional banks including First Republic Bank at the forefront of a broad market rally. Buoyed in part by reassuring comments by global financial authorities, both the S&P 500 and the Dow Jones Industrial Average posted their second consecutive day of gains for the first time since Silicon Valley Bank and Signature Bank collapsed less than two weeks ago. The S&P 500 gained 51.30 points, or 1.3% to 4002.87. The Dow Jones Industrial Average rose 316.02 points, or 1%, to 32560.60 and the technology-focused Nasdaq Composite climbed 184.57 points, or 1.6%, to 11860.11. The KBW Bank index rose 5%. Shares in big U.S. banks such as JPMorgan Chase posted strong gains, while some smaller lenders surged. Shares in big U.S. banks such as JPMorgan Chase posted strong gains, while some smaller lenders surged. First Republic stock jumped $3.59, or 29%, to $15.77 after shedding nearly half of its value Monday. Western Alliance and PacWest, two other midsize banks that have come under pressure, each climbed more than 14%.
Fading fears of a banking crisis buoy stock markets in East Asia and Australia for the second day in a row. In Tokyo, the Nikkei 225 index advances by 2.0 per cent. The Japanese stock market was closed on Tuesday for a holiday, so there is pent-up demand there. The Hang Seng Index (+1.7%) in Hong Kong also rallied strongly. In Shanghai, meanwhile, investors are holding back a little; the Composite Index is trading well.
The yield on the two-year U.S. Treasury note, which is especially sensitive to changes in the near-term interest-rate outlook, settled at 4.175%, according to Tradeweb, up from 3.922% Monday. The yield on the 10-year note also climbed, to 3.603% from 3.477% Monday. Yields on both bonds, however, remain well below their levels from two weeks ago.
JP Morgan lowers Swisscom target to CHF 670 (702) – Neutral
JP Morgan lowers Deliveroo target to 88 (91) p – Underweight
JP Morgan raises Safran target to EUR 170 (165) – Overweight
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