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Research Market strategy
by Swissquote Analysts
Morning News

Ford Expects Sales Share of Electrified Cars Above 50% in Europe by End 2022

Topic of the day

Ford Motor Co. (F) said Tuesday that it expects electrified vehicles to account for more than half of its sales in Europe by the end of 2022, surpassing the combined share of petrol and diesel models. "With electrification fast becoming the mainstream, we are substantially increasing the number of electrified models and power train options for our customers to choose from to suit their needs," Stuart Rowley, president, Ford of Europe, said. The car maker said it would showcase a line-up of plug-in hybrid vehicles at the Frankfurt Motor Show.

Swiss stocks

The SMI closed down 0.4 percent on 10,020 points, after only hitting a new all-time-high at 10,109 pointsMonday. Investors divested defensive stocks in favour of cyclicals for the second day running. Nestle, Novartis and Roche fell by between 1.6 percent and 0.3 percent. Traders said Nestle’s losses were partly profit-taking, as the stock had risen by more than 40 percent, while the index increased by only about 19percent since the start of the year. Lonza slumped 5.3 percent. Banks and insurers were sought again, buoyed by another bond yield rise. UBS, which had lost more than 5 percent since the start of the year, surged 3 percent. Credit Suisse rose 2.3 percent. Swiss Life, Swiss Re and Zurich Financial posted gains of between 0.2 percent and 1.3 percent. Lafargeholcim gained 1.9 percent, ABB 1.6 percent and Adecco 2.4 percent. Richemont slid 1.1 percent on news that the head of the fashion and accessories division willleave the company in October after only a year in office.

International markets

Europe

In Europe, closed mostly higher, with the Stoxx Europe advancing 0.1%. The index is up 0.10% to 386.44. London's FTSE 100 reversed earlier losses to close 0.4% higher. The day's biggest riser was JD Sports, up 8.8% after reporting rising profits in the first half of the fiscal year as it benefited from higher earnings. It was followed by lenders Barclays and LLoyds Bank, which finished the day up 4.9% and 4.3% each. The French CAC-40 Index was up 4.26 points, or 0.08%, to 5593.21 while the German DAX was up 42.61 points, or 0.35%, to 12268.71. Shares in Spanish banks fall after the European Court of Justice's advocate general said Tuesday that Spanish judges can decide if the use of a method to price mortgages was abusive. The opinion is in relation to the banks' past use of a benchmark called the Mortgage Loan Reference Index [IRPH in Spanish] to set mortgage interest rates. This method to price mortgages was an alternative to Euribor and was based on the average of mortgage yields sold by lenders in Spain. An advocate general's opinion is non binding and the court isn't obliged to follow it. However, this is often the case. CaixaBank falls 3%, while Banco de Sabadell and Bankia are down 1.6% and 2.3% respectively.

United States

U.S. stocks fell intraday as renewed concerns about slowing global growth weighed on technology shares. The Dow Jones Industrial Average slipped 38 points, or 0.1%, pulling back after four consecutive sessions of gains. The S&P 500 fell 0.5% as a decline in technology stocks offset gains elsewhere. The Nasdaq Composite shed 0.6%. Shares of software companies and chip makers slumped, with Microsoft and Applied Materials dropping 1.6% and 1.2%, respectively. Both groups have come under pressure recently amid anxiety about the U.S.-China trade dispute and speculation over a downturn in the global economy. Analysts were also monitoring Apple's annual showcase, where the tech giant revealed a trio of new iPhones. Apple shares ticked up 0.2%. Data released showed U.S. job openings fell for a second straight month in July, a potential indication that the recent hiring slowdown is a sign that companies are being cautious. Job openings, a closely watched measure of labor market health, dropped 3% from a year earlier in July to 7.217 million after declining 2% in June, the Labor Department said in its latest Job Openings and Labor Turnover Survey.

Asia

Hong Kong's Hang Seng Index was up in early trade, led by energy and financial stocks, with Guodu Hong Kong expecting it will stick within a narrow range this session as investors continue to fret about global and local economic growth. The HSI was recently up 0.2% at 26740.Japanese stocks opened in the green, boosted by financial companies after U.S. Treasury yields continued to advance sharply as the yen weakens. Higher bond rates make it easier for insurers to find higher-yielding assets while rising interest rates allow banks to increase lending margins. Investors and traders are watching for further signs of fiscal and monetary-policy stimulus. The Nikkei Stock Average was recently up 0.3% at 21449.38 and the 10-year Japanese government bond yield was up 1 basis point at -0.220%.

Bonds

U.S. government bond prices fell anew, with the Treasury Department and a crowded slate of corporate issuers adding to the supply of fresh debt. The yield on the benchmark 10-year Treasury note rose for a second consecutive trading session, settling at 1.706%, compared with 1.632% Monday. The yield has risen 0.25 percentage points since reaching a three-year low on Wednesday.

Analysis

BoA-ML raises Rheinmetall target to 127 (120) EUR - Buy
UBS downgrades SocGen and BNP Paribas targets - Buy
UBS raises RWE, Uniper and Enel targets - Buy
IR raises Roche target to 300 (295) CHF - Hold

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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