What you need to know about today’s trading day
Pre-IPO news on Novartis, Lem and Partners Group and other companies, the pre-IPO prices and the development of the markets in Asia and the USA.
The dispute over raising the debt ceiling in the US put another damper on Wall Street on Wednesday (learn more about the debt dispute here). The publication of the minutes of the US Federal Reserve’s (Fed) most recent meeting, on the other hand, had little effect on prices (more on the Fed Minutes here).
The Dow Jones Industrial closes 0.77% lower at 32,799.92 points. The market breadth S&P 500 loses 0.73% to 4115.24 points. For the tech-heavy Nasdaq 100 is down 0.5% to 13,604.48 points.
The titles of the fashion companies Abercrombie & Fitch (+31.1%) and Urban Outfitters (+17.6%) are among Wednesday’s winners following better-than-expected quarterly figures. Abercrombie’s sales and gross margin are praised. Urban Outfitters also shines with strong proceeds.
The semiconductor manufacturer Analog Devices beats expectations with second quarter earnings growth. The fact that the share still loses 7.8% is probably due to the strong performance since the end of April.
The losers include the papers of the US financial group Citigroup (-3.1%). He plans to buy back shares later this quarter given the failed sale of his Mexico business and will list the entity known as Banamex in 2025.
The fear about the US debt also weighed on the Asian stock exchanges on Thursday, they tend to be in the red. With the exception of Nikkei 225, which is up 0.2% in Tokyo. The broader one Topix recorded a minus of 0.3%.
In mainland China, the CSI 300 0.5% lower, also the Shanghai Composite corrected by 0.6%. In Hong Kong the Hang Seng a decrease of 2.6%. The South Korean Kospi trades at a discount of 0.5%. In Australia he loses S&P/ASX 200 1,1%.
The forward contract (future) on the S&P 500 is trading up 0.3% on Thursday morning, the futures on the Euro Stoxx 50 is practically unchanged compared to the previous day. The contract on the SMI is available for a discount of 1%, the Dax nonetheless, costs 0.1% more.
News Pre-Exchange Switzerland
Novartis: Novartis’ Sandoz division is one step further with the planned approval of a biosimilar in the EU. The European Medicines Agency (EMA) has accepted the marketing authorization applications for the proposed biosimilar denosumab for review. The applications show that the generic drug denosumab is as effective as Amgen’s original drugs Xgeva and Prolia. The biosimilar is to be used like the original for the treatment of a number of diseases, including osteoporosis in women after menopause. (Read more here.)
Lem: The electronics component manufacturer Lem increased sales by 8.8% to CHF 406.4 million in the 2022/23 financial year (as of the end of March). Operating profit (EBIT) improved 4.3% to CHF 92.2 million. The profit margin fell 1 percentage point to 22.7%. The dividend should be 52 (previous year 50) Fr. With the figures, the component manufacturer has slightly exceeded the estimates of analysts at all levels. (Read more here.)
Sounds: The federal prosecutor’s office has launched an investigation into the medical technician Skan. It relates to transactions in BV Holding shares prior to Skan Group’s IPO. (Read more here.)
Partners Group: There are two departures from the management of the private market specialist Partners Group. Hans Ploos van Amstel is stepping down as Chief Financial Officer, and Head of Customer Service Marlis Morin is also resigning from her position. nonetheless, Ploos van Amstel will remain with the company as an advisory partner and Morin as a partner. The investigation for a new chief financial officer is already at an advanced stage (more here).
Peach Property: The real estate company Peach Property confirmed the goals for the current year at its general meeting. They would apply despite the current market uncertainties. Total net rental income is expected to be between €121m and €123m and the operating result is expected to be between €21m and €23m. Efforts to achieve additional efficiency gains and cost reductions would continue. (Read more here.)
Julius Baer pre-market prices
Important events of May 25, 2023
7:00 a.m. Lem: Result 2022/23 (MK 10:30 a.m., Zurich)
07:00 DEU: Südzucker, annual figures (detailed)
07:00 LUX: Adler Group, Q1 figures
07:30 ITA: General Insurance, Q1-Zahlen
09:00 LUX: ArcelorMittal, Annual General Meeting
10:00 DEU: Patrizia, Annual General Meeting (online)
10:00 DEU: Bechtle, Annual General Meeting, Heilbronn
11:00 DEU: Salzgitter, Annual General Meeting, Wolfsburg
11:30 DEU: Fresenius, Capital Markets Day
2:00 p.m. DEU: Biontech, Annual General Meeting
16:00 USA: McDonald’s AGM
22:15 US: Costco Wholesale Q3 numbers
08:00 DEU: BIP Q1/23 (2nd release)
08:00 DEU: Construction (Incoming Orders and Sales Index) 03/23
08:00 DEU: GfK consumer confidence 06/23
08:45 FRA: Business climate 05/23
08:45 FRA: Producer trust 05/23
10:00 POL: Unemployment rate 04/23
13:00 TRK: Central bank interest rate decision
14:30 US: Initial Jobless Claims (Week)
14:30 US: BIP Q1/23 (2nd release)
14:30 USA: Private consumption Q1/23 (2nd release)
14:30 USA: CFNA-Index 04/23
16:00 USA: Pending home sales 04/23
Outlook – interest rates and foreign exchange
Remarkable divergences are currently emerging on the bond and currency markets: The yields on two- and ten-year German government bonds have been moving slightly upwards since the beginning of May – but are still within the trading range that has widened since the turbulence surrounding some banks in the USA and the United States Switzerland formed in March. Since then, two-year and ten-year yields in Switzerland have been at about the same level of around 1%, albeit without major fluctuations.
This is different for German government bonds, which are considered trend-setting for the euro zone: Here, the fluctuation range has been around 0.5 percentage points since March – without it being apparent that the yields would leave this range: for two-year paper between 2.5 and 3%, for ten-year-olds between 2 and 2.5%.
The interest rate differential between Switzerland and the euro area, which has recently been growing again, can also be explained by investors’ outlook on the key interest rates of the central banks: In the euro area, the probability is slowly growing that the European Central Bank would be more likely to stop its interest rate hikes at 4% in the summer than at the 3.75% previously anticipated as safe. In Switzerland, on the other hand, hardly anything is happening on the futures markets. Here, the expected final interest rate for the Swiss National Bank is hovering around 2%, recently rather lower.
But only the Swiss franc can benefit from this on the foreign exchange market: it has risen 1.7% against the euro since mid-March. €1 costs just over CHF 0.97 this week. A similar picture emerges for the euro against the dollar, which has recently strengthened again. The real interest rate differential (after deducting expected inflation) based on two-year overnight swaps (OIS) suggests that €1 should cost between $1.10 and $1.11 rather than $1,077 as it currently is. It would therefore not come as a surprise if there were stronger movements on the foreign exchange markets again after the end of the dispute over the US debt ceiling.
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