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Research Market strategy
by Swissquote Analysts
Morning News

Facebook to Boost Consumer Advertising

Topic of the day

Facebook Inc. said it is ramping up its global advertising spending as it aims to rebuild trust after a series of privacy missteps and other controversies dented the social-networking giant’s reputation. The push, which Facebook marketing chief Antonio Lucio said could more than double the company’s advertising spending, will involve working with a revamped roster of creative agencies on campaigns for brands including WhatsApp and Instagram. Mr. Lucio said the Menlo Park, Calif., firm has been tarred by election interference and misinformation on Facebook as well criticism of its privacy and data management. “There’s no question we made mistakes and we’re in the process of addressing them one after the other, but we have to tell that story to the world on the trust side as well as on the value side,” Mr. Lucio said. Facebook has already begun its effort to rebuild trust with consumers, according to Mr. Lucio. The company recently redesigned its mobile app and website to shift from an open public forum to a more private network with encrypted communication in closed groups. Last year it aired an expensive apology ad campaign to repair its image among people upset about the proliferation of fake news on Facebook and Russia’s use of the platform as it tried to influence the U.S. election.

Swiss stocks

The SMI slipped 0.1 percent to 9,848 points Friday, faring better than most markets. A new geopolitical crisis in the Far East threatened to escalate after the US blamed Iran for attacks on two oil tankers Thursday. New market support could come this week from the US Federal Reserve interest rate decision.Swatch slid 1.5 percent despite an analyst rating as cheap, as the analysts also said it lacked investor appeal, with margins under pressure from investment costs. Cyclical stocks, viewed as more risky, were not in demand. ABB slumped 2.1 percent and Lafargeholcim 0.8 percent. Adecco bucked the trend, rising 1.8 percent after an analyst upgrade to “overweight”. Bank stocks slid gain, with UBS down 1.2 percent and Credit Suisse 0.9 percent lower. Defensive heavyweights Nestle rose 0.2 percent and Novartis 0.5 percent. Roche slipped 0.1 percent to CHF 276 although technical analysts view the stock as attractive, seeing a run up to the stock’s all-time high of CHF 296.

International markets

Europe

The Stoxx Europe 600 dropped 0.5%. The DAX dropped also 0.6% and the CAC-40 was off 0.2%. Semiconductor stocks and cyclical commodity stocks came under pressure. The Stoxx Technology subindex fell by 1.8 percent. This was due to a weak interim report by Broadcom. In Europe, Infineon fell by 5.3 percent, Dialog by 2.5 percent, Aixtron by 3.1 percent, ASML by 2.3 percent and STMicro by 3.2 percent. For the steel sector, there were disturbance fires from China. The Chinese Ministry of Commerce has extended its anti-dumping tariffs on steel pipes from the USA and the EU and increased them sharply to 57.9 to 147.8 percent. China had imposed tariffs of 13 to 14 percent on these products in 2014, and by 10 May they had expired. Salzgitter lost 2.3 percent, Thyssenkrupp 2.5 percent, Arcelormittal 2.4 percent and Outokumpu 4.7 percent.

United States

U.S. stocks meandered lower in quiet trading as tepid economic data and rising tensions in the Middle East added to concerns over growth and trade. The Dow Jones Industrial Average slipped 17.16 points, or 0.1%, to 26089.61 in recent trading, while the S&P 500 lost 4.66 points, or 0.2%, to 2886.98 and Nasdaq Composite fell 40.47, or 0.5%, to 7796.66. The declines mark a pause in what has otherwise been a strong start to June, and all three indexes are on track for weekly gains. The Dow industrials were up 0.4% last week, while the S&P 500 was up 0.5% last week and the Nasdaq was up 0.7%. After a bruising May during which major indexes lost more than 6%, U.S. stocks have clawed back much of those losses. The recent rally was sparked, when Federal Reserve officials signaled in interviews and speeches that they are watching the risks of a sharper-than-expected economic slowdown, a sign the central bank might consider lowering interest rates in coming meetings. Last week, gains in shares of energy companies and a batch of soaring initial public offerings also helped boost stock prices. On Friday, shares of online pet-products retailer Chewy Inc. soared $12.99, or 59%, to $34.99 in its stock-market debut.

Asia

Asian markets were mostly higher, with Hong Kong's Hang Seng bouncing at the open as investors welcomed the suspension of an unpopular extradition bill after protests.

Bonds

Prices of Treasurys tend to rise in response to soft inflation data, because rising consumer prices are a major threat to bonds, chipping away at the purchasing power of their fixed payments. Recent declines in inflation expectations have also increased bets the Federal Reserve will lower interest rates -another action that would increase the value of outstanding bonds.

Analysis

Warburg downgrades Nanogate target to 58,30 (60,20) EUR - Buy
Warburg downgrades Hella target to 53 (60) EUR - Buy
Warburg downgrades Hawesko target to 43 (46) EUR - Hold
Oddo downgrades Rheinmetall to Reduce (Neutral) – Target 89 (105) EUR


Produced by MBI Martin Brückner Infosource GmbH & Co. KG on behalf of Swissquote. All news is acquired with journalistic accuracy. No liability is assumed for delays or errors.

 
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