The Swiss luxury brands conglomerate Richemont, known for brands such as Cartier and IWC, continued to grow during the Christmas quarter. However, the pace of growth slowed slightly, as anticipated. The jewellery business continues to perform well. In the third quarter of the 2023/24 financial year, i.e. from October to December, sales rose by 4 per cent to 5.59 billion euros, as Richemont announced on Thursday. In local currencies, sales increased by 8 per cent. Analysts had anticipated an average increase of 6.8 per cent. Compared to the first half of the year, growth was therefore less strong: From April to September, currency-adjusted sales had still risen by 12 per cent. Richemont grew particularly strongly in the jewellery business with its flagship brand Cartier. Currency-adjusted sales there increased by 12 per cent. The watch division with brands such as IWC grew by 3 per cent. Richemont does not publish profit data for the third quarter. As usual, Richemont also did not provide a concrete outlook for the rest of the 2023/24 financial year.

The Swiss stock market saw a marked decline in the middle of the week. The SMI dropped by 0.7 per cent to 11,149 points. Among the 20 SMI stocks, there were 17 losers and three gainers. A total of 17.97 (previously: 16.11) million shares were traded. Shares in solar cell manufacturer Meyer Burger lost almost a third of their value. Jefferies analysts categorised the company's move announced this morning to focus on US production and prepare for the closure of module production in Germany as a "worst case scenario" other than bankruptcy. Without regulation, it is now "goodbye Germany". The decision by the Swiss to close the plant for good or not still depends on the official position of the German government on the resilience bonus, which is expected to crystallise in the second half of February with the publication of Solar Package I. Geberit shares fell by 4.9 per cent. The sales figures for the fourth quarter and the increase in the EBITDA margin came as no surprise, yet it remains to be seen whether the underlying market momentum has actually increased, according to Jefferies analysts. The sanitary appliance manufacturer's sales figures were 1.5 per cent above consensus. The Baloise share price improved by 1.1 per cent following an upgrade by UBS. The analysts raised their rating to "buy" from "neutral". Bank of America now recommends buying Straumann shares (+1.2 per cent).

Europe
European stocks were lower on Wednesday after U.K. inflation picked up speed and as central bankers kept pushing back against expectations of big interest-rate cuts this year. The Stoxx Europe 600 index fell by 1.1% to 467.7 points. In Paris, the CAC 40 and the SBF 120 each lost 1.1%. The DAX 40 in Frankfurt was down 0.8% on Wednesday, while the FTSE 100 in London decreased by 1.5%. CGG shares fell by 9.9% to €0.45. Kepler Cheuvreux lowered its recommendation on the oilfield services group from "buy" to "hold" and reduced its target price from €1.50 to €0.70. Carmaker shares declined after Tesla announced price cuts in several European markets. Renault shed 2.1%, while Stellantis was down 1.4%. In Frankfurt, Volkswagen slipped 2.4%, Mercedes-Benz lost 3.2% and BMW dropped 3.1%. Renault also announced on Wednesday that its worldwide sales had rebounded by 9% in 2023 compared to 2022, putting an end to a series of four consecutive years of falling volumes. Airport operator Groupe ADP (-2.1%) welcomed 336.4 million passengers to its airport network in 2023, coming close to its level of traffic before the health crisis. Traffic in the Vinci Group's network of airports (-0.8%) rebounded by 26.4% in 2023, to more than 267 million passengers. British oil company BP (-0.8% in London) announced that Murray Auchincloss had been appointed to the post of Chief Executive Officer on a permanent basis with immediate effect.

United States
U.S. stock indexes fell deeper into negative territory for 2024 as investors dialed back their expectations for how quickly the Federal Reserve might start cutting interest rates. Retail sales rose a seasonally adjusted 0.6% in December from a month earlier, according to data released on Wednesday, a larger increase than economists expected. The sign of economic strength could lessen the chance that central bank officials will cut interest rates as much as markets had previously expected, some investors said. The S&P 500 fell 0.6% while the Dow Jones Industrial Average slipped 0.3%, or about 94 points. The tech-heavy Nasdaq Composite declined 0.6%. The S&P 500 is down 0.6% in 2024, while the Dow and Nasdaq are off 1.1% and 1%, respectively. The declines were broad-based, with all 11 sectors of the S&P 500 trading lower. All but one of the so-called Magnificent Seven tech stocks retreated, with Tesla shares falling 2%, Amazon.com shares dropping 0.9% and Class A shares of Google parent Alphabet losing 0.7%. Shares of Meta Platforms added 0.2%. Shares of Spirit Airlines slumped 22%, after a 47% decline Tuesday. A federal judge blocked a plan by JetBlue Airways to buy Spirit for $3.8 billion. Investors turned to the safety of some traditionally defensive stocks, including food makers and healthcare companies. J.M. Smucker shares rose 2%, Campbell Soup gained 1.3% and Humana added 2%.

Asia
Asian stocks were mixed on Thursday. In Tokyo, the Nikkei-225 was little changed at 35,495 points, while the Kospi in Seoul traded slightly lower. The decline in Shanghai was more pronounced at 2.1 per cent. Traders in Shanghai reported weak prices for commodities and coal. In Hong Kong, the HSI at least managed to recover from its 3.7 per cent slump the previous day, rising by 0.2 per cent.

Bonds
Long-dated U.S. government debt yields finished at their highest levels since early December again on Wednesday, after robust U.S. retail sales and a pickup in U.K. inflation dampened enthusiasm over interest-rate cuts this year. The 10-year Treasury note yield aimed 4 basis points to 4.102%, following a jump of 12 basis points on Tuesday which took it back above 4%. The 2-year Treasury note yield, which is more sensitive to the outlook for monetary policy, gained 12 basis points to 4.346%, following a rise of almost 10 basis points the previous day.

Analysis
Baader upgrades Lindt & Sprüngli target to CHF 10,400 (10,000) - Reduce
BoA raises Straumann to Buy (Neutral) - Target CHF 153 (142)
UBS lowers Swiss Life to Neutral (Buy)/target CHF 620 (605) - Trader

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