The Swiss stock market opened slightly lower on Friday as investors digested the European Central Bank’s announcements from the previous day. In the United States, momentum in the election campaign is increasingly shifting towards Republican candidate Donald Trump, who is in good form, while Democratic incumbent Joe Biden is losing support.
The New York Stock Exchange closed sharply lower on Thursday evening, with investors fleeing mega-cap stocks for the second consecutive session as uncertainties in U.S. politics begin to weigh.
Donald Trump on Thursday promised an “incredible victory” for Republicans in the November presidential election, closing a convention of a party uniting behind his candidacy. He stated his acceptance of the Republican Party’s nomination for the election.
In the Democratic camp, former President Barack Obama, still very influential, has, according to the American press, expressed doubts regarding the “viability” of Joe Biden’s candidacy. At 81 years old, Biden is campaigning for his political survival and was forced to put his campaign on hold due to Covid-19.
In Frankfurt, the European Central Bank (ECB) unsurprisingly left its key rates unchanged on Thursday, awaiting reassuring figures on inflation, leaving all options on the table for the next meeting.
“The current level of policy rates is acting as a drag on the economy and should continue to do so in the event of one or two further rate cuts,” LBBW analysts stated in a market commentary. They added that there is still room for further monetary easing, with a 25 basis point cut at the ECB’s September meeting being conceivable.
At around 09:08 on the Swiss Stock Exchange, the leading SMI index was down just 0.10% at 12,235.40 points, following closing down 0.70% the previous day. The SLI was down 0.27% at 1,968.31 points and the SPI was down 0.20% at 16,228.56 points.
The majority of leading stocks were in the red, with the biggest declines being recorded by VAT Group (-2.2%), Lonza (-2.0%) and Kühne+Nagel (-1.5%). Berenberg analysts lowered VAT’s target price, while maintaining their recommendation on the stock at “hold”.
Logitech (-1.1%) also lost ground. Seized by Daniel Borel, the company’s co-founder, the District Court of La Côte in Nyon considered the issue of the chairmanship of the board of directors on Thursday. The decision is expected to be made on Monday.
ABB (-0.5%) was also among the losers, following revealing its financial performance the day before. The engineering group barely maintained its growth path in the second quarter, while significantly improving its profitability.
Novartis (+0.5%) was in demand. Also on the corporate results agenda on Thursday, the pharmaceutical giant boosted both its revenues and profitability between April and the end of June. Management raised its operating surplus ambition for the full year.
Roche (up +0.5%, good +0.3%) also rose, while Nestlé (-0.04%) floated. On Thursday, the French media outlet Mediapart, citing an investigation report by the fraud prevention services, claimed that Nestlé Waters had used prohibited treatments for its three Vosges mineral waters for at least fifteen years.
Schindler (+0.3%) reported on Friday a decline in order intake and revenues in the first six months of the year. Profitability nevertheless improved, thanks in particular to an increase in operational efficiency, pricing effects and changes in the product offering.
On the broader market, Sulzer (-0.6%) reversed the positive pre-market trend. The Winterthur-based industrial conglomerate revised upwards its targets for its order book and sales on Thursday.
Mikron (-1.3%), Bystronic (-1.8%) and V-Zug (+1.6%) also revealed their quarterly performance.
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Swiss Stock Market Opens Lower as Investors Digest ECB Announcement and US Election Uncertainty
The Swiss stock market opened slightly lower on Friday, with investors reacting to the European Central Bank’s (ECB) announcements from the previous day and the ongoing uncertainty surrounding the US presidential election.
US Election Uncertainty weighs on sentiment
The New York Stock Exchange closed sharply lower on Thursday, with investors fleeing mega-cap stocks for the second straight session. Uncertainty surrounding the US presidential election continues to weigh on market sentiment.
Donald Trump, the Republican candidate, has been gaining momentum in recent polls. At the Republican National Convention, he promised an “incredible victory” for his party in the November election. In contrast, Democratic incumbent Joe Biden has seen his support decline in recent weeks, with former President Barack Obama expressing concerns regarding the “viability” of his candidacy. Biden’s campaign has been disrupted by the COVID-19 pandemic.
ECB Unchanged, Leaving Future Options Open
In Frankfurt, the ECB left its key rates unchanged on Thursday, as expected. The bank is awaiting further data on inflation before making any decisions on future monetary policy.
“The current level of policy rates is acting as a drag on the economy and should continue to do so in the event of one or two further rate cuts,” LBBW analysts stated in a market commentary. They added that there is still room for further monetary easing, with a 25 basis point cut at the ECB’s September meeting possible.
Swiss Stock Market Performance
At around 09:08, the Swiss Market Index (SMI) was down just 0.10% at 12,235.40 points following closing down 0.70% the previous day. The SLI was down 0.27% at 1,968.31 points, and the SPI was down 0.20% at 16,228.56 points.
Leading Stocks
Most leading stocks were trading in the red, with the biggest declines seen in:
- VAT Group (-2.2%): Berenberg analysts lowered the target price for VAT Group while maintaining their “hold” recommendation on the stock.
- Lonza (-2.0%)
- Kühne+Nagel (-1.5%)
- Logitech (-1.1%): The District Court of La Côte in Nyon is considering the issue of the company’s board chairmanship, with a decision expected on Monday.
- ABB (-0.5%): The engineering group reported a slight slowdown in growth in the second quarter but saw a significant improvement in profitability.
Novartis (+0.5%) was in demand following reporting an increase in both revenue and profitability in the second quarter. The pharmaceutical giant also raised its full-year operating surplus goal.
Roche (+0.5%) and Good (+0.3%) also rose, while Nestlé (-0.04%) traded flat. Nestlé Waters has been accused of using prohibited treatments for its three Vosges mineral waters for at least 15 years, according to an investigation by French media outlet Mediapart.
Schindler (+0.3%) reported a decline in order intake and revenue in the first six months of the year, but profitability improved due to higher operational efficiency, pricing adjustments, and changes in product offerings.
Broader Market
Sulzer (-0.6%) reversed its positive pre-market trend. The Winterthur-based industrial conglomerate revised its targets for order book and sales upwards on Thursday.
Other companies reporting quarterly performance included:
- Mikron (-1.3%)
- Bystronic (-1.8%)
- V-Zug (+1.6%)
Overall, the Swiss stock market started the day slightly lower, with investors digesting the ECB’s latest announcements and the evolving political landscape in the United States.
