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Research Market strategy
by Swissquote Analysts
Morning News

Eli Lilly Stock Gains as Drug Slows Decline in Alzheimer's Patients

Topic of the day

The pharma firm Eli Lilly said Monday that its experimental Alzheimer's drug slowed the decline of early-stage Alzheimer's patients in a Phase 2 trial, scrambling the race to bring the first drugs to slow progression of the deadly disease. Lilly (ticker: LLY) said that its experimental antibody therapy donanemab showed a "significant slowing of decline" of cognition and daily function in early symptomatic Alzheimer's disease patients. Patients receiving the therapy, which clears amyloid plaque in the brain by targeting a protein called the N3pG beta amyloid, lost function 32% more slowly than patients receiving a placebo. Shares of Lilly, which has a market value of $159.2 billion, were up 12% in trading on Monday. Shares of the biotech Biogen (BIIB), which is waiting for a Food and Drug Administration ruling on its own Alzheimer's antibody therapy, aducanumab, climbed 5.7%.

Swiss stocks

While its fellow European markets took a downturn, the SMI closed up 0.7 percent on 10,870 points Monday. While profit-taking in morning trading initially pushed the index into negative territory, it recovered quickly later, buoyed particularly by its pharmaceutical heavyweights. The day’s top gainer was Roche, which climbed 3.7 percent after receiving approval from the EU Commission for its flu drug Xofluza. Competitor Novartis rose 1.0 percent. Flavour and fragrance manufacturer Givaudan surged 1.5 percent. Stocks hit predominantly by profit-taking were those which had recently performed well. Lafargeholcim fell 1.5 percent and Alcon 1.4 percent. Among second-tier stocks, online chemist Zur Rose climbed 5.5 percent, profiting from competitor Shop Apotheke’s strong financials. In addition, Zur Rose plans to collaborate with Danish pharmaceutical firm Novo Nordisk in the area of obesity therapy with the aim of improving access to information, diagnosis and care for obesity patients.

International markets

Europe

European stocks fall as worries about surging coronavirus cases across the region drag on market sentiment. The Stoxx Europe 600 drops 0.7%, the FTSE 100 slides 1.1%, the DAX declines 0.8% and the CAC-40 sheds 0.8%. Renewed health concerns have encouraged dealers to book profits following last week's "very bullish" moves in equities on expectations the Biden administration will implement greater fiscal stimulus, CMC Markets analyst David Madden says. TUI shares fall 7.7%, extending last week's declines after the travel company announced a capital raise. Swedish telecom operator Tele2 gains 4.4% after announcing a partnership with Finland's Nokia for a new 5G core network in Sweden. JD Sports Fashion advances 3.8% after a strong trading update. Sanofi SA said Monday that it has entered into an agreement to acquire U.K.-based biopharmaceutical company Kymab for an upfront payment of about $1.1 billion. The French pharmaceutical major said the deal also includes the payment of up to $350 million upon achievement of certain milestones. The acquisition of Kymab – which focuses on the development of fully human monoclonal antibodies – would give Sanofi full global rights to the KY1005 monoclonal antibody, it said. The antibody can be used in the treatment of a range of immune and inflammatory diseases, according to Sanofi.

United States

A slide in shares of technology giants weighed on the broader market as investors grew wary of heightened regulation tied to the market's most enduring winners. The S&P 500 declined 0.7%, after hitting a record on Friday. The tech-heavy Nasdaq dropped 1.3%. The Dow Jones Industrial Average shed 0.3%. Tech heavyweights underperformed the broader market as they slashed access to some of President Trump's favorite megaphones after the storming of the Capitol by his supporters. The riot, planned and discussed on social media, is expected to spur Congressional efforts to regulate big tech. Facebook has indefinitely suspended President Trump, while Apple, Amazon.com and Alphabet's Google retracted support for the social-media app Parler. Shares of Twitter (TWTR) fell 6% on Monday, following an announcement by the microblogger late last week that it has permanently suspended the account of President Donald Trump. "After close review of recent Tweets from the @realDonaldTrump account and the context around them – specifically how they are being received and interpreted on and off Twitter – we have permanently suspended the account due to the risk of further incitement of violence," Twitter said in a blog post Friday. The ban followed Wednesday's events, when Trump spoke at a rally of supporters, who later stormed the Capitol as Congress was voting to confirm the results of the election. Five people have died as a result of the riots. Facebook (FB) banned Trump on Thursday. Shares of Boeing Co. (BA) dropped 3.7% in premarket trading Monday, enough to pace the Dow Jones Industrial Average's decliners ahead of the open, after a Boeing 737-500 jet operated by Sriwijaya Air, carrying 62 people, crashed over the weekend.

Asia

Stock markets in East Asia and Australia showed a mixed trend on Tuesday. The Kospi in Seoul recorded a strong minus of 2.3 per cent, which participants explained with profit-taking after the recent significant price increases. This development had already been indicated on the previous day, when the index slipped slightly into the red after gains at the start.

Bonds

The selloff in bonds continued in Asia with U.S. Treasury yields adding to recent gains. The yield on the benchmark 10-year note finished Monday's trading session at 1.131%, despite a decline in stocks, Driving yields higher in recent sessions: increased investor expectations for new stimulus measures later this year after Democrats won control of the Senate during last week's runoff elections.

Analysis

UBS rises the Erste Bank target to 29 (23) EUR – Buy
CS rises the ASML target to 450 (370) EUR – Outperform
UBS rises Santander to Buy (Neutral) – Target 3,30 (2) 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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