LVMH Beats Consensus with Strong 1Q Sales
Topic of the day
LVMH Moet Hennessy Louis Vuitton SE said Tuesday that sales returned to strong growth in its first quarter, boosted by its core soft-luxury division and by the integration of jeweler Tiffany. Sales at the French luxury-goods conglomerate grew by 30% organically on year to 13.96 billion euros ($16.63 billion). The figure represents an 8% rise compared with the same period in 2019. Analysts had forecast quarterly sales of EUR12.58 billion, according to a FactSet-compiled consensus of seven estimates. The core fashion & leather goods division booked the largest increase at 52%, while the watches & jewelry division, with Tiffany integrated for the first time, posted growth of 35%.
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On the Swiss stock exchange, investors were predominantly on the sell side for the second day in a row on Tuesday. The SMI lost 0.5 percent to 11,122 points. Among the 20 SMI stocks, there were 14 price losers and six price gainers. 41.52 (previously: 36.32) million shares were traded. Givaudan (+2.1%) were far ahead in the SMI. Traders described the sales figures of the flavorings manufacturer from Vernier in the canton of Geneva as "really strong". Especially the business in Asia had developed very well. Financial stocks such as Zurich Insurance (-1.2%) or Swiss Re (-2.9%) suffered from slightly lower yields. At UBS, on the other hand, it was mainly the dividend discount of 37 centimes that brought the share down by 2.8 percent, or 41 centimes. Sika shares, which had been doing well, fell 2.7 percent. Year-to-date, it is up about 10 percent, while the SMI has only gained about 4.5 percent. It was the other way around for Lonza, which has now recovered 2.2 percent after falling more than 5 percent since the beginning of the year.
European stocks mostly edge higher amid stronger-than-expected US inflation and downbeat news on coronavirus vaccines. The Stoxx Europe 600 gains 0.1%, the CAC-40 rises 0.3% and the DAX is up 0.1% but the FTSE 100 is flat. "Rising US inflation has served to dampen sentiment, as tech outperforms other sectors," Joshua Mahony at IG says. "Meanwhile, all-too-familiar blood clot problems appear to be plaguing the single-dose jab from Johnson & Johnson." Dermapharm gained 11.6 percent. The drugmaker had delivered a strong sales outlook. Very high growth is expected, mainly thanks to the cooperation with Biontech on Corona vaccines. The share price of London-listed defense and engineering company Babcock International jumped 32 percent. The British company will have to revaluate balance sheet items and write off around 1.7 billion pounds. However, the fact that this does not require any capital measures is being rewarded, according to traders.
On Tuesday, U.S. stocks closed mixed. The tech-heavy Nasdaq 100 jumped 167 points or 1.2% to a record close of 13,986. The S&P 500 climbed 13 points or 0.3% to 4,141, also an all-time high. Meanwhile, the Dow Jones Industrial Average slipped a further 68 points to 33,677. The U.S. Labor Department reported that consumer prices increased 0.6% on month (vs +0.5% expected) and 2.6% on year (vs +2.5% expected) in March. Meanwhile, the U.S. Food and Drug Administration requested a halt in administering Johnson & Johnson's (JNJ) Covid-19 vaccine after six people in the country developed a rare blood-clotting disorder. The utilities, consumer discretionary and information technology sectors performed the best. Tesla (TSLA) jumped 8.6% becoming the top gainer in the S&P 500. The stock closed above its 50-day moving average for the first time since February. Chip-maker NVIDIA Corp (NVDA) gained a further 3.1%. Apple (AAPL), PayPal (PYPL) and Twitter (TWTR) were all up over 2%. Johnson & Johnson (JNJ) closed 1.3% lower. Nasdaq set the reference price for the highly anticipated public listing of Coinbase Global Inc. at $250, which would give the cryptocurrency exchange a valuation of about $65 billion.
The stock exchanges in East Asia are showing predominantly positive signs at midweek. In Shanghai, prices are up by an average of 0.2 percent. In Hong Kong, the Hang Seng Index gains 1.2 percent. However, the firmer yen pulls the Tokyo Stock Exchange slightly down on Wednesday, where the Nikkei 225 index lost 0.5 percent closing at 29,615 points. In Seoul (+0.2%) Samsung drags down the index with a minus of 0.5 percent.
U.S. Treasury prices rallied after a 30-year bond auction showed strong demand. The 10-year Treasury yield dropped 5.3 basis points to 1.622%, the lowest level since March 25.
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