Research Market strategy
By Swissquote Analysts
Published on 16.06.2023
Morning news

H&M 2Q Sales Increased 6% on Year, Shy of Forecasts

Topic of the day

Sweden’s H&M Hennes & Mauritz on Thursday reported fiscal second-quarter sales that were slightly below expectations. The fashion retailer said sales for the quarter ended May 31 increased by 6% on year to 57.62 billion Swedish kronor ($5.38 billion), while net sales in local currencies were “flattish”. Analysts polled by FactSet had expected quarterly sales at SEK58.3 billion. H&M said sales in the second quarter were affected by unfavorable weather conditions compared to the corresponding period last year in several of its large markets but added, that June has got off to a good start. The figures are provisional and could deviate slightly when full second-quarter earnings are published on June 29, it said.

Swiss stocks

The Switzerland stock market ended modestly higher on Thursday after a choppy session. Stocks swung between gains and losses as investors largely stayed cautious and uncertainty about the near term direction after the Federal Reserve sounded hawkish with regard to its future policy stance, and the European Central Bank raised rates and hinted at another hike in July. The benchmark SMI ended with a gain of 24.53 points or 0.22% at 11,302.83. The index touched a low of 11,249.85 and a high of 11,305.93 in the session. Nestle and Logitech gained about 1.3% and 1.2%, respectively. Novartis ended 0.7% up and Swisscom gained 0.69%. UBS Group ended lower by about 1.25%. Partners Group, Holcim, Lonza Group, Richemont, Swiss Life Holding, Geberit and Sika lost 0.6 to 0.8%. Among the stocks in the Mid Price index, Schindler Ps, Flughafen Zurich and Schindler Holding gained 1.71%, 1.52% and 1.25%, respectively. Georg Fischer ended nearly 1% up. Tecan Group, SGS and PSP Swiss Property posted modest gains. VAT Group ended 4.2% down. Temenos Group, DocMorris, SIG Combibloc and Meyer Burger Tech lost 2.2 to 3.4%.

International markets


European stocks closed broadly lower on Thursday after the European Central Bank raised rates by 25 basis points and signaled another hike in July. The ECB lowered the growth projections for the euro area and revised up their projections for core inflation. Hawkish remarks from the Federal Reserve, hinting at further monetary tightening later this year hurt as well. The pan European Stoxx 600 edged down 0.13%. France's CAC 40 shed 0.51%, Germany's DAX ended 0.13% down, and the U.K.'s FTSE 100 climbed 0.34%. Switzerland's SMI gained 0.22%. Among other markets in Europe, Austria, Belgium, Czech Republic, Finland, Greece and Norway ended weak. Denmark, Netherlands, Poland, Portugal, Russia and Turkiye closed higher, while Iceland, Ireland, Spain and Sweden settled flat. The ECB raised the three key interest rates by a quarter basis points today, in line with expectations, as policymakers assessed that despite some slowing, inflation is likely to remain 'too high for too long' and economists' are looking forward to one more hike in July.
The Governing Council, led by ECB President Christine Lagarde, increased the main refinancing rate, or refi, by 25 basis points at 4%. The previous change in the interest rates was a similar hike in May. The ECB has raised rates in every policy session since July last year, by a cumulative 350 basis points. Core inflation, excluding energy and food, is now projected to reach 5.1% in 2023, before easing to 3% next year, and further down to 2.3% in 2025. Eurozone economy is now projected to grow by 0.9% this year, 1.5% next year and 1.6% in 2025. In the UK market, Polymetal International rallied more than 4%. Informa surged nearly 3.5%. Royal Mail gained 2.75%, while Reckitt Benckiser, TUI, AstraZeneca, Relx, Vodafone, Unilever, Standard Chartered and Hikma Pharmaceuticals closed higher by 1.3 to 2%.

United States

U.S. stocks rose Thursday, lifted by gains in everything from shares of manufacturers to oil producers. Markets have been buoyant in recent weeks. The S&P 500 on Thursday scored its sixth straight session of gains, its longest winning streak since an eight-session run in November 2021, according to Dow Jones Market Data. The S&P 500 added 1.2% Thursday. The Nasdaq Composite picked up 1.1%, and the Dow Jones Industrial Average jumped 1.3%, or 429 points, to 34408. Money managers said markets also seemed to be largely looking past the Fed's signaling from Wednesday. The central bank's dot plot, a chart showing officials' projections for rates in the coming years, showed a majority of officials expect the Fed to push through two more quarter-percentage-point rate increases this year. Stock gains were broad Thursday, with all of the S&P 500's 11 sectors closing higher. Seven sectors rose by at least 1%. Shares of Mediterranean-style restaurant chain Cava Group, which made their stock market debut Thursday, jumped 99% to $43.78. The company had priced its initial public offering at $22 per share Wednesday. Consumer staples shares rose, with Target and Estée Lauder among the sector's biggest gainers.


The stock markets in East Asia and Australia are showing premiums at the end of the week. The stock markets are thus following the positive trend on Wall Street. New 14-month highs were reached here. The focus is on the Bank of Japan's (BoJ) interest rate decision. It left the upper limit for the yield of 10-year Japanese government bonds at 0.5 per cent and also kept the deposit rate unchanged at minus 0.1 per cent. It is thus sticking to its ultra-loose monetary policy.


U.S. bond prices rose Thursday. The yield on the two-year U.S. Treasury note, which is particularly sensitive to traders' expectations for monetary policy, fell to 4.648% from 4.707% Wednesday. The yield on the 10-year U.S. Treasury note settled at 3.727% from 3.796% late Wednesday. Bond yields rise as prices fall.


UBS lowers Lonza to CHF 650 (680) – Buy
Deutsche Bank raises X-Fab to EUR 11 (9.50) – Buy
Citi lowers Deutsche Bank target to EUR 12.80 (13.50) – Buy

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