2024-01-17 17:16:17
Zurich (awp) – The Swiss stock market ended on a negative note on Wednesday. The mood was dampened by an unprecedented bout of weakness in the last 30 years of Chinese growth last year. The SMI moved sideways in the red, around a hundred points below its closing level the day before, posting a low below 11,100 points before recovering a little and finishing at its highest of the day.
In New York, Wall Street lost ground in the morning. Investors seem to realize that the expected rate cuts from the US Federal Reserve (Fed) might come later than expected.
Art Hogan, analyst for B. Riley Wealth Management, pointed out that the consensus in favor of a rate cut by the Federal Reserve (Fed) starting in March fell to less than 60% at the opening “compared to 80 % at the end of last week, according to the CME FedWatch tool.
This decline in bets on a rate cut promised to accelerate during the session following the publication of new consumption data, more dynamic than expected. Indeed, retail sales in December increased by 0.6% instead of the expected +0.4%.
“End-of-year purchases exceeded the most optimistic forecasts,” commented Robert Frick, economist for Navy Federal Credit Union.
In Davos, the World Trade Organization (WTO) declared itself “less optimistic” for world trade this year. Secretary General Ngozi Okonjo-Iweala listed “the worsening of geopolitical tensions, the disruptions that we see in the Red Sea, on the Suez Canal, the Panama Canal”.
The SMI ended down 0.72% to 11,148.56 points, with a low of 11,088.87 points and a high of 11,148.56 points. The SLI lost 0.95% to 1752.76 points and the SPI 0.71% to 14,523.78 points. Of the 30 star stocks, 23 fell and seven advanced.
Straumann (+1.2%) precedes Novartis (+0.9%), as well as Sandoz and Sonova (each +0.7%) on the small podium of the day. Bank of America raised its recommendation for Straumann to “buy” from “neutral” and increased the price target. Thanks to strong demand in China and the recovery in orthodontics, the group should post organic growth of 12% for the 2023 financial year.
The two other heavyweights Nestlé (-0.2%) and Roche (good -1.1%, buoyant -1.1%) did not escape the general negative trend.
Geberit (-4.9%) finished bottom, behind Julius Bär (-3.1%) and Lonza (-3.0%).
The St. Gallen specialist in sanitary equipment, affected by the strength of the franc, achieved a turnover of 3.08 billion Swiss francs last year, down 9.1% over one year. The operating margin (Ebitda) is expected at 30%. He expects the economic situation in the construction sector to continue to weaken.
Morgan Stanley lowered the Zurich private bank’s price target and confirmed it as “underweight”. The trend of weak revenue is expected to continue and the analyst expects a reduction in 2024 guidance from management.
The Geneva luxury specialist Richemont (-2.4%) will publish its turnover on Thursday for the third quarter of its staggered 2023/24 financial year (October to December). Analysts surveyed by the AWP agency expect sales between 5.4 and 5.7 billion euros.
Givaudan (-1.4%) also suffered. The British authorities have broadened their investigation into alleged anti-competitive practices in the perfume sector, targeting in particular the two groups Givaudan and Firmenich, since merged with the Dutch DSM.
On the broader market, DKSH (-1.9%) has started a “strategic partnership” with Lipton Teas in order to develop the presence in the Australian market of the famous tea brand sold in 2022 by Unilever to the CVC Capital fund for 4, 5 billion euros.
The St. Gallen producer of measuring instruments Inficon (+2.1%) claims to have largely achieved its ambitions last year, both in terms of revenue and profitability.
Meyer Burger (-31.5%) has issued a profit warning for the 2023 financial year. The manufacturer of solar modules and panels is now banking on the United States and announces the abandonment of module production in Germany and plans to closure of the Freiberg site, which employs around 500 employees.
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