Telefonica said that it had reached a collective bargaining agreement with unions to lay off up to 3,421 employees in Spain, following the company’s restructuring plan. The layoffs, which will cost around 1.3 billion euros ($1.42 billion) before taxes, will run until December 31, 2026, and can be extended for one additional year, the Spanish telecommunications company said on Wednesday. Employee departures are estimated to take place in the first quarter of this year and those turning 56 years or older in 2024 who have been with the company for more than 15 years will be able to participate in the agreement, Telefonica said. The layoffs will enable the company to reach average annual savings from direct expenses of some EUR285 million from 2025, although the impact on cash generation will be positive from this year. Telefonica said that it and the unions have been negotiating the labor force adjustment plan, which follows the company’s organizational, technical and production needs. According to its 2022 annual report, Telefonica employed 20,947 people in its home market. In December, the company proposed a workforce restructuring affecting 5,124 jobs in Spain, but the unions claimed that the number of jobs affected had to be significantly lower.

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The Swiss stock market closed to the upside again on Thursday, extending its winning streak to three sessions and gathering almost 160 points or 1.5 percent along the way. The SMI bounced back and forth across the unchanged line before late support pushed it firmly into the green, benefitting from a batch of European economic data that strengthened an optimistic outlook for interest rates. For the day, the index gained 54.11 points or 0.48 percent to finish at the daily high of 11,224.37 after trading as low as 11,139.16. Among the actives, SGS surged 3.57 percent, while UBS Group jumped 1.72 percent, Novartis rallied 1.37 percent, Zurich Insurance sank 1.06 percent, Roche Holding climbed 0.99 percent, ABB advanced 0.97 percent, Swiss Re added 0.86 percent, Swiss Life gained 0.62 percent, Nestle lost 0.53 percent and Swisscom rose 0.39 percent. The market responded positively to higher inflation figures from France and Germany, as well as Eurozone private sector data that investors hope will encourage central banks to pare back interest rates.

Europe
The major European markets endured a choppy trading day on Thursday, bouncing back and forth across the unchanged line before finally settling with mild gains. Investors were peppered throughout the session with economic data that was mixed to weak but strengthened a positive outlook for interest rates. The DAX in Germany added 78.90 points or 0.48 percent to finish at 16,617.29, while London's FTSE gained 40.4 points or 0.53 percent to close at 7,723.07 and the CAC 40 in France rose 38.77 points or 0.52 percent to end at 7,450.63. In Germany, Zalando plunged 4.13 percent, while Siemens Energy soared 2.47 percent, Bayer spiked 2.41 percent, Deutsche Bank rallied 2.20 percent, Infineon Technologies stumbled 2.05 percent, Deutsche Telekom advanced 0.81 percent, Daimler Truck sank 0.72 percent, Deutsche Post lost 0.39 percent and Vonovia eased 0.07 percent. In London, Frasers Group plummeted 3.56 percent, while BAE Systems jumped 1.90 percent, Tesco rallied 1.54 percent, British American Tobacco strengthened 1.44 percent, Vodafone and M&G both climbed 1.35 percent, Entain dropped 1.20 percent, St. James Place added 1.11 percent, Rolls-Royce gained 1.02 percent, Prudential rose 0.55 percent and Haleon was up 0.46 percent. In France, Engie surged 2.16 peent, while Atos tumbled 3.55 percent, BNP Paribas accelerated 2.01 percent, Societe Generale jumped 1.71 percent, Credit Agricole improved 1.45 percent, Carrefour gained 0.93 percent, Sanofi added 0.92 percent, Worldline shed 0.83 percent, Orange rose 0.32 percent and Vivendi perked 0.19 percent.

United States
Tech stocks continued to limp through the first week of January. The Nasdaq Composite notched its fifth consecutive day of losses, following its worst two-day start to the year since 2005. Shares of Amazon.com and Apple weighed on the tech-heavy index, dragging it 0.6% lower with their respective declines of 2.6% and 1.3%. The benchmark S&P 500 slipped 0.3% after pulling back over the first two trading days of the year. The blue-chip Dow industrials edged up 10 points, or less than 0.1%, on Thursday. Investors often watch stocks’ performance in January as a sign of what’s to come in the year ahead, but some say the rocky start to 2024 is expected after the rally over the past few months. Shares of Walgreens Boots Alliance fell 5.1% after the drugstore chain cut its next dividend by nearly half to 25 cents a share. Conagra Brands, the maker of Slim Jim and Healthy Choice products, slid 1.9% after saying it expects organic sales to decline rather than grow. The Magnificent Seven propelled the market last year, boosted by enthusiasm over artificial intelligence. Apple also gained $927 billion in market cap in 2023, but its valuation shrank $165 billion over the first three trading days of 2024, according to Dow Jones Market Data. Conger’s base case is for stocks to perform well as economic growth chugs along and inflation moderates. But a scenario where the economy overheats and bond yields surge back to 5%, or one where growth slows dramatically, could hit the Magnificent Seven particularly hard, he said. On Friday, investors will look to the nonfarm payrolls report, arguably Wall Street’s most closely watched labor indicator.

Asia
Overall, there was little activity on the stock markets in East Asia on Friday. The trend is predominantly close to stable after the US stock markets also fell slightly. Tokyo is an exception. The Nikkei index advanced by 0.6 per cent to 33,505 points. In Seoul (-0.5 per cent), the renewed rise in tensions with North Korea also caused caution. South Korea has called on residents of Yeonpyeong Island to seek safety after North Korea fired around 200 shells off its west coast.

Bonds
The U.S. 10-year Treasury yield climbed to 3.990%. The persistently tight job market gives the Federal Reserve less reason to cut interest rates, easing some of the downward pressure on yields.

Analysis
JP Morgan downgrades Moeller-Maersk to Neutral (Overweight)

UBS raises the ASML target to EUR 785 (770) – Buy

Barclays raises SAP to EUR 156 (154) – Overweight