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Research Market strategy
by Swissquote Analysts
Morning News

Uber plans an additional 3,000 layoffs

Topic of the day

Uber Technologies Inc. (UBER), which announced 3,700 job cuts less than two weeks ago, isn't done. The struggling ride-hailing service is cutting deeper to the bone with an additional 3,000 layoffs, according to a Wall Street Journal report, citing a memo from Uber Chief Executive Dara Khosrowshahi to staff on Monday. News of the cuts sent Uber shares soaring 7% in early-afternoon trading Monday. The job reductions of 6,700 represents about 25% of the San Francisco-based company's workforce. Uber, which has seen a precipitous plunge in rides since the coronavirus pandemic, also plans to shutter 45 offices in its latest downsizing, the Journal reported (https://www.wsj.com/articles/uber-cuts-3-000-more-jobs-shuts-45-offices-...). Uber shares are down 16% over the past year. The broader S&P 500 index is up 4% in the past year.

Swiss stocks

The SMI closed up 2.7 percent on 9,741 points Monday, buoyed by hopes of an imminent return to normality, with declining new coronavirus infection numbers, more lockdown easing, and news that US company Moderna’s vaccine candidate showed promise in clinical trials. Furthermore, US Federal Reserve President Jerome Powell had assured the Fed still had a lot of ammunition to battle a recession. With many European politicians optimistic about summer holidays around Europe, second-tier airport operator Flughafen Zurich surged 10.6 percent and duty-free shop operator Dufry 11.3 percent. CS Group leaped 10.1 percent, UBS 6.9 percent, ABB 6.0 percent, Adecco 8.6 percent, Geberit 4.4 percent and Alcon 6.7 percent. Defensive stocks lagged the SMI. Nestle rose 1.2 percent and Novartis 1.7 percent. Roche, the only stock to fall, slid 0.7 percent. Traders pointed to profit-taking, as the Roche participating certificate had risen 16 percent since the start of the year, the SMI only 10 percent.

International markets

Europe

European stocks gained as oil prices rebounded and as investors cheered the gradual easing of coronavirus lockdowns. The Stoxx Europe 600 jumped 4.1%, the FTSE 100 advanced 4.3%, the DAX added 5.7% and the CAC-40 increased 5.2%.F rance and Germany on Monday proposed establishing a EUR500 billion Europe-wide recovery fund to support European regions worst hit by the coronavirus pandemic. The new financial support would come on top of a EUR540 billion coronavirus response plan already agreed upon by European Union member states and would form a key part of a European recovery fund EU leaders have pledged to support to lift the region's economy once the immediate crisis is over.Airlines rallied after Ryanair reported a rise in full-year pretax profit and revenue. A pickup in oil prices boosted energy shares while higher copper prices lifted miners.Occidental Petroleum Corp. (OXY) said Monday it informed Total S.A. (FP.FR) (+7,4%) that it would not be in position to sell its Anadarko assets in Algeria, as part of an understanding with Algerian authorities on the transfer of Anadarko's interests to Occidental. The energy company had completed its acquisition of Anadarko Petroleum Corp. in August 2019. Thyssenkrupp AG shares are trading higher on Monday, +12,5%, supported by press reports that it may seek a tie-up for its steel operations. The German industrial company was in talks with peers like Baosteel, SSAB and Tata Steel Ltd. about a potential combination of its steel business, German newspaper Handelsblatt reported. Thyssenkrupp declined to comment. This comes as the company "is fighting to survive," says a trader.

United States

U.S. stocks rallied on hopeful developments about a potential coronavirus vaccine, recovering ground following the biggest weekly percentage drop in nearly two months. Markets have rebounded sharply from their late March lows and have been particularly sensitive to any developments suggesting progress towards a vaccine for the virus. Investors cheered after drugmaker Moderna said its experimental coronavirus vaccine induced immune responses in some of the healthy volunteers who were vaccinated in a clinical study. The results offer a positive sign about its capabilities to protect people against the new coronavirus. Still, the results are preliminary. Many vaccines fail to pass muster, even after showing positive signs in early testing. Moderna shares jumped 25% to $83.12, on course for a new high, pulling up the broader market. "The idea that there has been progress in Moderna's trials but also the more positive news that it looks like coronavirus could be tackled with a vaccine, has helped boost sentiment," said Edward Park, deputy chief investment officer at Brooks Macdonald. The Dow Jones Industrial Average jumped 920 points, or 3.9%. The S&P 500 rose 3.3%, erasing last week's 2.3% loss. The Nasdaq Composite added 2.6%. The S&P 500's energy, real estate, industrials, materials and financial sectors all rose at least 4%. The energy group climbed 7.2%, driven by a 6.8% jump in oil prices.

Asia

In Asia, markets gained on hopes for a coronavirus vaccine after U.S. drugmaker Moderna's early-stage trial boosted Wall Street, with the Dow closing 900 points higher.

Bonds

U.S. Treasury yields rose intraday, following global equity markets higher, after Federal Reserve Chairman Jerome Powell said the central bank still had tools to fight the recession. Reports of early success from an experimental coronavirus vaccine also added to selling in haven bonds and buying of stocks. The 10-year Treasury note yield was up to 0.727%.

Analysis

CS lowers the Hugo Boss target to 25 (33) EUR – Neutral
Citi lowers the Commerzbank target to 3,30 (3,50) EUR – Neutral
UBS rises the Linde target to 200 (190) EUR – Buy


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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