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Research Market strategy
by Swissquote Analysts
Morning News

Bayer, BASF Ordered to Pay $265 Million in Weedkiller Crop-Damage Suit

Topic of the day

A jury ruled against Bayer AG and BASF SE in a crop-damage case, awarding $265 million to a Missouri peach farmer who claimed the companies encouraged farmers to irresponsibly spray a hard-to-control weedkiller. Peach farmer Bill Bader sued the pesticide-and-seed makers after he said thousands of his fruit trees sustained damage in 2015 and 2016. The damage, he alleged, was caused by a herbicide called dicamba that drifted from neighboring cotton fields, planted with dicamba-resistant biotech seeds developed by Bayer and BASF. The legal battle over dicamba deepens Bayer’s legal troubles over its top-selling herbicides. The Bader Farms Inc. case was the first involving dicamba to go to trial and a bellwether for about 35 similar lawsuits filed by farmers seeking damages in Illinois, Arkansas, Missouri and other states. The ruling in a federal court in Missouri on Saturday comes as the Environmental Protection Agency is set to decide by the end of this year whether farmers will continue to be allowed to spray the companies’ dicamba-based herbicides on crops.

Swiss stocks

The SMI closed up 0.3 percent on 11,129 points Friday and thus on a new all-time high, buoyed by heavyweight Nestle as the other stocks moved little. Reports that the numbers of new coronavirus infections have declined compared to the previous day’s figures were met with cautious optimism. However, scepticism still reigned on the market about the statistics out of China. Nestle gained 2.7 percent, recovering from the previous day’s losses after reporting figures and outlook had put the stock under pressure. Some traders evidently deemed the losses to be exaggerated and used the lower prices to buy the stock. Roche slid 1.2 percent on profit-taking after strong gains Thursday. Zurich Insurance gained a further 1 percent after rising almost 2 percent Thursday on good financials. China-reliant luxury goods stocks Swatch and Richemont closed with slight losses. They have declined 5 percent and 2 percent respectively since the start of the year, while the SMI has gained almost 5 percent.

International markets

Europe

European stocks were mostly lower as weak German economic growth data and concerns about the spread of China's coronavirus hit risk appetite. The Stoxx Europe 600 fell 0.1%, the FTSE 100 declined 0.6%, the CAC-40 shed 0.4% while the DAX was broadly flat. Official data on Friday showed that Germany's gross domestic product was flat in the fourth quarter, missing expectations for a 0.1% rise, based on a WSJ survey. Royal Bank of Scotland shares fall 6.8% after the U.K.-focused bank reported higher fourth-quarter profit, but trimmed its medium-term returns target. Electricite de France SA's shares jump 9.9% as the French utility's full-year results beat expectations. Volkswagen AG's global deliveries declined sharply in January, furthered by a fall in Chinese sales, the German car maker said Friday. January group sales fell 5.2% to 836,800 vehicles, Volkswagen said. In China, vehicle sales fell more than 11% to 343,400. Sales in Western Europe were largely stable while those in North America rose 4.7%. The Volkswagen group includes a number of brands, including Audi, Skoda, Porsche and the company's namesake Volkswagen passenger cars.

United States

U.S. stocks paused but ended the week with gains as investors' concerns about a sharp rise in coronavirus cases from earlier in the week faded. The S&P 500 and Nasdaq Composite were both up 0.2% each as of 4 p.m. Eastern time. The Dow Jones Industrial Average fell 25.23 points, or 0.1%, to 29398.08. All three indexes capped off the week with gains. Investors grew concerned this week about when the coronavirus outbreak might peak after Chinese authorities changed the criteria for diagnosis, leading to a dramatic increase in the number of new cases. But stocks in the U.S. and Europe largely continued rallying on faith that central banks and governments will take steps to shield the global economy from the impact of the outbreak. "The market wants to believe this is a one-quarter blip and we're back to the races," said Neil Dwane, global strategist at Allianz Global Investors. The technology sector rose as momentum buyers continued flocking to the sector, spurred by strong earnings. Shares of graphics chip maker Nvidia rose after forecasting earnings growth ahead of Wall Street expectations, bringing gains since its 52-week low last February to about 85%.

Asia

in Asia, Japan's Nikkei tumbled after the country's economy shrank at a faster-than-expected annualized pace of 6.3% in the October-December quarter. It was the first contraction in more than a year, as a sales-tax increase at the beginning of the quarter cooled consumption.

Bonds

U.S. Treasury yields fell after a weaker-than-expected retail sales number pointed to potential cracks in a longstanding pillar of the economy. Investors also eyed the spread of COVID-19, the viral outbreak that originated in Wuhan, China. The 10-year Treasury note yield slid to 1.587%, while the 2-year note yield was down to 1.424%. The 30-year bond yield slipped to 2.043%.

Analysis

Citi rises the Commerzbank target to 6,80 (5,60) EUR – Neutral
IR lowers the Metro target to 13,50 (14,50) EUR – Hold
MS rises the Credit Suisse target to 15 (14) CHF – Equal-weight


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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