Reinsurer Swiss Re improved its profitability in the first half of the year thanks to investment income. Net profit came to 1.1 billion dollars. Premium income totaled 11.67 billion dollars, the world's second-largest reinsurer reported on Thursday. A comparison with the results for the first quarter of 2023 is not indicated, as Swiss Re has changed its accounting standards. Life reinsurance generated a profit of 412 million. The combined ratio, i.e. the ratio between premiums collected and benefits paid, for property-casualty reinsurance (P&C) was 84.7%. For business insurance (CorSo), this indicator reached 89.9%. Swiss Re is still forecasting a net profit of ‘more than 3.6 billion dollars’ for 2024. At the beginning of April, the group announced the departure of its long-standing CEO, Christian Mumenthaler, who headed the company for eight years after 25 years at the company. Andreas Berger will succeed him on 1 July.

Favourable US consumer prices drove the leading Swiss index to a new high for the year on Wednesday. The SMI climbed 1 per cent to 11,899 points. Among the 20 SMI stocks, there were 19 price gainers and one loser. A total of 20.36 (previously: 23.13) million shares were traded. Richemont (+0.1%) and, outside the SMI, Swatch (-0.8%) lagged the buoyant market. In the luxury segment, traders pointed to Burberry's mixed outlook, which put the brakes on sector stocks across Europe. Pharmaceutical heavyweight Roche, on the other hand, was in demand with a 1.3 per cent premium. The Group had received approval from the US Food and Drug Administration (FDA) in the HPV field. Novartis (-0.2%) was unable to keep pace, even though the competitor announced new trial data. Lonza topped the table with gains of 4.9 per cent, more than making up for the previous day's losses. According to traders, this was a positive reassessment of the pharmaceutical manufacturer's first-quarter results from the previous day. Among the second-line stocks, Logitech (+0.1%) did not benefit from a planned dividend increase of 9.4 per cent. VAT climbed 4.8 per cent following an improved credit rating from the rating agency Moody's. Softwareone kicked off 2024 on a solid note and confirmed its forecast for the year, with the share price rising by 7.3 per cent.

Europe
European equity markets hit new all-time highs on Wednesday, following news of a slight slowdown in US inflation in April. The Stoxx Europe 600 index gained 0.6% to 524.7 points. In Paris, the CAC 40 climbed 0.2% to 8,239.99 points, a new record. The London (+0.2%), Frankfurt (+0.8%) and Milan (+1%) stock exchanges also closed at all-time highs. CGG (+19.6%) was the best performer within the SBF 120 index. The parapetroleum services group confirmed its financial outlook for 2024 and recorded revenue growth ahead of analysts' expectations for the first three months of the year. Euronext (+3.2%) published higher results for the first quarter, generally exceeding expectations. Trigano (-6.8%) warned that it expected its business to return to normal in the second half of the financial year ending August 2024. Carrefour lost 4.1% to €16.11, the biggest decline within the CAC 40 index. British luxury goods group Burberry (down 7.3% in London) published lower results for its 2023-2024 financial year. In its wake, LVMH shed 0.4%, while Hermès and Kering lost 0.6%. Commerzbank (+5.1% in Frankfurt) raised its net interest income forecast for 2024, after posting its best net profit for ten years in the first quarter thanks to high interest rates and strong customer activity.

United States
All three major U.S. stock indexes closed at records after the latest inflation report showed price pressures moderating, bucking a trend of hotter-than-expected readings. The S&P 500, Dow Jones Industrial Average and Nasdaq Composite logged all-time highs on the same day for the first time since March 21. The S&P 500 gained 1.2% on Wednesday, while the Dow industrials climbed 0.9%, adding roughly 350 points. The index is fewer than 100 points away from hitting 40,000. The tech-heavy Nasdaq Composite rose 1.4% U.S. inflation eased slightly in April, fresh data showed. Three previous Labor Department readings had suggested persistent inflation across much of the U.S. economy this year, casting doubt on if and when the Federal Reserve might lower interest rates. Softer retail sales data supported investor optimism that the Fed’s goal of taming inflation is progressing. Fresh figures showed American shoppers are showing signs of spending fatigue, with retail sales data for April coming in sharply below expectations. A wild two-day run for meme stocks sputtered Wednesday. GameStop and AMC Entertainment surged this week in a manner reminiscent of the 2021 retail-trading frenzy, fuelled by social-media posts. Those shares crashed 18.9% and 20%, respectively, though they are still up more than 125% and 88% for the week. Gains in the S&P 500 were led by the technology sector. Shares of Super Micro Computer rallied 15.8%, while Advanced Micro Devices gained more than 4%. Bitcoin rose 7.4%, trading above $66,000 apiece.

Asia
In Asia and Australia, major indexes broadly closed with gains on Thursday. The sharpest rise was in Hong Kong. The Hang Seng Index climbed by 1.6 per cent. Longfor Group then shot up by 13.2 per cent, while China Overseas Land jumped by 5.6 per cent and China Resources Land by 3.6 per cent. Alibaba, meanwhile, fell by 2.4 per cent. The group presented its quarterly figures on Tuesday after the close of trading. Due to the public holiday in Hong Kong on Wednesday, investors are only now able to react. The situation is similar for Tencent. The share gained 4.2 per cent. On the Chinese mainland, the Shanghai Composite advances by 0.5 per cent. In Tokyo, the Nikkei index rises 0.8 per cent to 38,704 points. In Seoul, where trading was also suspended on Wednesday due to the public holiday, the index was up 0.8 per cent. In Sydney, the S&P/ASX 200 increased by 1.5 per cent, supported by Wall Street.

Bonds
U.S. Treasuries rallied on Wednesday, sending yields to their lowest levels in more than a month, after inflation as measured by the consumer-price index came in below expectations for April. The 10-year Treasury note yield fell by 8 basis points to 4.359%. The 2-year Treasury note yield dropped 7 basis points to 4.745%.

Analysis
LBBW raises UBS target to CHF 28.50 (26) - Hold
Jefferies upgrades Nestle target to CHF 86 (84.50) - Underperform
Alcon target price: JP Morgan upgrades to CHF 88.90 (85.10) - Overweight

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