Citigroup (-1.7%) reported a 27% drop in its first-quarter profit as expenses, including from the banks restructuring plans, offset revenue gains by some of its biggest businesses. Citi reported net income of $3.37 billion, or $1.58 a share, compared with net income of $4.61 billion, or $2.19 a share, a year earlier. Analysts expected $1.18 per share, according to FactSet. Revenue fell 2% to $21.1 billion from $21.45 billion. Wall Street was looking for $20.46 billion, according to FactSet. Citis revenue tally a year ago included a $1 billion gain on the sale of its consumer-banking arm in India. Citis Services business, which provides a range of banking and treasury services for companies and investment managers, posted revenue of $4.8 billion, up 8%. Total trading revenue fell 7% to $5.4 billion. Trading on bonds and other fixed-income securities dropped 10%, as markets turned less volatile. Revenue from Citis stock-trading desks rose 5%. In banking, which includes merger advice, stock-and-debt underwriting and corporate loans, revenue rose 49% to $1.7 billion. Citi saw a pickup in both stock and debt offerings. Revenue from the U.S. consumer-banking arm increased by 10% to $5.2 billion on gains from credit cards. Citis wealth-management business reported revenues of $1.7 billion, down 4% from a year ago.

The Swiss stock market recorded higher losses than the other stock markets on Friday - after initial gains. The Swiss franc strengthened against the euro for the second day in a row, which traders considered critical in view of the competitive situation of the Swiss export industry. The SMI lost 0.8 per cent to 11,380 points. Among the 20 SMI stocks, there were 13 losers and seven gainers. A total of 19.69 (previously: 20.94) million shares were traded. Swisscom (+0.1%) extended its strategic partnership with Swedish telecoms equipment supplier Ericsson. Zurich Insurance fell only visually by 3.8 per cent; without the dividend deduction, the share price would have finished on a positive note. The weakness of Richemont (-3%), which traders linked to the sluggish economy in China, was conspicuous. Among the second-line stocks, Swatch fell by 2.5 per cent. Zurich Airport dropped by 1.1 per cent - in line with the weakness of European aviation stocks due to the threat of escalation in the Middle East. Leonteq extended its cooperation with Raiffeisen while the share price of the financial company slipped by 1.4 per cent.

Europe
The European stock markets ended Friday's session on a hesitant note, weighed down by concerns about an escalation of the conflict in the Near and Middle East, while investors analysed the disappointing quarterly results of major US banks. The Stoxx Europe 600 index ended slightly up, by 0.1%, at 505.3 points. In Paris, the CAC 40 and the SBF 120 each lost 0.2%. The DAX 40 shed 0.1% in Frankfurt. In London, the FTSE 100 gained 0.9%, helped by a slightly stronger than expected rise in UK gross domestic product (GDP) in the three months to the end of February. Over the week as a whole, the Stoxx Europe 600 dropped 0.3%. Energy stocks climbed in the wake of oil and gas prices. In Paris, Neoen and Maurel & Prom gained 3.4% each, Vallourec advanced 2.2%, TotalEnergies added 2.1% and Technip Energies gained 1.6%. The troubled digital services group Atos (+4.2%) tried to erase some of its losses on Friday, but was still down 8% on the week. The stock has lost more than 74% since the start of the year. On Thursday evening, S&P Global Ratings downgraded Atos' credit rating from "CCC" to "CCC-", with a negative outlook. The Société Générale banking group (+2.1%) has signed two agreements with Saham concerning the sale of Société Générale Marocaine de Banques and La Marocaine Vie, for a total of 745 million euros.

United States
Inflation worries and geopolitical uncertainty weighed on markets, capping off a losing week for everything from bank shares to energy and real-estate stocks. The Dow Jones Industrial Average shed about 476 points, or 1.2%, on Friday. For the week, the blue-chip index lost about 921 points, or 2.4%, its biggest weekly loss since March 2023. The S&P 500 fell 1.5%, while the Nasdaq Composite pulled back 1.6%, both also finishing with weekly losses. Stocks sold off broadly. On Friday, 460 stocks in the S&P 500 closed lower. All 11 sectors of the benchmark index declined this week for the first time since September, with financial shares sliding 3.6% to lead the way downward. Some of the country’s largest banks on Friday reported better-than-expected first-quarter earnings, but issued muted forecasts, saying they are starting to feel the pinch of higher-for-longer interest rates. JPMorgan shares declined 6.5%, the stock’s worst day since June 2020, while Citigroup fell 1.7% and Wells Fargo ticked down 0.4%. Shares of BlackRock fell 2.9% despite the company’s better-than-expected earnings and revenue for the first quarter. The world’s largest money manager reported about $10.5 trillion in assets under management. Investors will watch the first-quarter earnings season closely to assess whether corporate profits are backing up the S&P 500’s 7.4% rally this year. Analysts expected companies in the S&P 500 to report earnings about 1% higher than in the same period a year ago, according to FactSet’s aggregate of reported results and consensus estimates. For the year, Wall Street is looking for 10% earnings growth among index constituents. If quarterly results or projections of future profits fall short of expectations, that could put stocks at risk of looking expensive relative to companies’ earnings. Companies in the S&P 500 are trading at around 20.6 times their projected earnings over the next 12 months, above the five-year average of 19.1, according to FactSet. Gold futures gained 1.3% this week to hit a new record on Friday.

Asia
Stocks in Asia mostly fell following the first direct attack on Israel by Iran. In Tokyo, the Nikkei index dropped by 1.1 per cent to 39,102 points. Seoul is down 0.8 per cent, while Hong Kong posts a decline of 0.7 per cent. Shanghai is the outlier on the upside. The index there rose by 1.2 per cent after the Chinese central bank left the interest rate for its one-year credit facility unchanged at 2.5 per cent.

Bonds
Long-term yields on U.S. government debt saw their biggest two-week jump in six months on signs of persistent inflation, even though they finished lower on Friday amid escalating Middle East tensions. The 10-year Treasury note yield fell by 7 basis points on Friday to 4.529%, but posted a gain of more than 9 basis points over the week. The 2-year Treasury note yield dropped by 6 basis points to 4.911%, after jumping 15 basis points over the last four sessions.

Analysis
Jefferies upgrades Docmorris to CHF 110 (90)/Buy - Trader
Berenberg raises VAT to CHF 539 (450) - Hold
Target price AMS Osram: UBS lowers to CHF 1.20 (2.50) - Neutral

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