ABB minimally increased sales in the first quarter of 2024, but did not maintain its order intake compared to the previous year. The company has once again become more profitable. After a strong previous year, order intake fell by 5 per cent to USD 8.97 billion, partly due to the loss of major contracts, as the manufacturer of industrial robots, charging stations for electric cars and automation solutions announced on Thursday. On a comparable basis, the decline was 4 per cent. The situation looks better in terms of turnover: The latter remained unchanged in US dollars at 7.87 billion US dollars, while on a comparable basis there was an increase of 2 per cent. At the same time, profitability improved. The operating margin climbed by 1.6 percentage points to 17.9 per cent. Net profit fell by 13 per cent to 905 million US dollars, partly due to a positive tax effect in the previous year. ABB thus exceeded analysts' expectations for the most part, with only sales falling short of expectations. For the current second quarter, management is forecasting growth in comparable sales in the mid-single-digit range and a slightly higher operating EBITA margin compared to the first quarter of 2024. The share price rose 0.7 per cent on Wednesday.

Midweek, the Swiss stock market recovered slightly from the previous day's losses. After central bank policy and geopolitical tensions had recently provided the impetus, the focus is now increasingly turning to the reporting season. ABB, for example, publishes its first-quarter figures on Thursday. On Wednesday, the SMI improved by 0.3 per cent to 11,232 points. Among the 20 SMI stocks, there were ten losers and ten winners. A total of 18.54 (previously: 25.46) million shares were traded. The day's winners among the SMI were Richemont shares, which gained 3.0 per cent. Swatch shares, on the other hand, declined by 1.3 per cent. The market was also supported by the gains of index heavyweight Nestle, rising by 1.6 per cent. UBS shares recovered some of the previous day's losses and improved by 0.5 per cent.

Europe
European stocks traded slightly higher on Wednesday, steadying after recent sharp losses, with a muted reaction in markets evident after Jerome Powell's comments on the outlook for U.S. interest rates. The Stoxx Europe 600 index gained 0.1% to 498.5 points. In Paris, the CAC 40 and SBF 120 were each up 0.6%. The DAX 40 was stable at the close, while London's FTSE 100 added 0.4%. LVMH (+2.8%) was the biggest riser on the CAC 40. Hermès climbed 2.3%. Metal recycling specialist Derichebourg (-5.2%) issued a warning on its results for the financial year ending September 2024, due to the "greater than initially anticipated" financial impact of the cyber-attack suffered last November and a "deteriorated economic climate". Construction and concessions group Vinci (+0.3%) said it had reached an agreement with private equity firm Global Infrastructure Partners (GIP) to acquire a 50.01% stake in Edinburgh Airport Limited, the company that owns Edinburgh Airport in Scotland, for £1.27 billion (€1.5 billion). Semiconductor equipment manufacturer ASML (down 6.7% in Amsterdam) reported orders and sales below analysts' forecasts for the first quarter. Following a weaker interim report, Just Eat Takeaway fell by 4.4 per cent. The fact that Borussia Dortmund (+4.8 per cent) reached the semi-finals of the UEFA Champions League also benefited investors.

United States
Stocks fell Wednesday, deepening an April selloff, after investors largely abandoned their expectations of imminent interest-rate cuts. The S&P 500 fell 0.6%, marking a fourth straight session of declines. The Nasdaq Composite shed 1.1%. The Dow Jones Industrial Average dipped 0.1%, or 46 points. The S&P 500’s losing streak is its longest since the first week of 2024. And for the third consecutive session, the index rose in early trading before closing lower, the longest streak of such reversals since 2022. Stocks rallied sharply to start the year, due in part to widespread expectations that the Federal Reserve would move to lower interest rates at some point in 2024. The S&P 500 had its best first quarter since 2019. Traders in interest-rate derivatives are now pricing in a 16% chance that the Fed will lower its policy rate at its June meeting, according to CME Group’s FedWatch tool. A month ago, the likelihood of a cut was 55%. Investors have responded by pushing bond yields higher and prices lower, which has pressured stocks. All three major indexes are down 4% or more so far this month. Chip stocks fell, continuing a recent slide for a sector that has shined over the past year. The PHLX Semiconductor Index declined 3.2% and has shed 6.9% for the month. United Airlines stock rose 17%, the S&P 500’s top performer, after the carrier reported stronger-than expected quarterly results. Rivals also enjoyed a boost: American Airlines Group gained 6.6%, while Southwest Airlines advanced 2.6%. The worst performer in the S&P 500 was J.B. Hunt Transport Services, which fell 8.1% after reporting weak results.

Asia
In Asia, major indexes broadly closed with gains on Thursday. In Tokyo, the Nikkei 225 index rose by 0.5 per cent to 38,136 points. The Kospi in Seoul jumped 1.6 per cent, the HSI in Hong Kong climbed 1.3 per cent and the Shanghai Composite rose 0.6 per cent. Among the individual stocks, the chip stocks Advantest (+4.3 per cent) and Lasertec (+0.7 per cent) recovered in Tokyo. Tokyo Electron, which had fallen only moderately on Wednesday, has now lost a further 1.6 per cent. Oil stocks were among the worst performers in the region after oil prices fell more sharply the previous day and are currently holding at a reduced level. In Tokyo, Inpex dropped by 2.0 per cent and in Hong Kong, CNOOC declined by 1.3 per cent.

Bonds
Long-dated U.S. government debt yields slipped on Wednesday. The 10-year Treasury note yield eased by 7 basis points to 4.583%. The 2-year Treasury note yield fell by 3 basis points to 4.93%. On Tuesday, bond yields had risen again following statements by Fed Chairman Jerome Powell to the effect that "the lack of further progress" in the fight against inflation in the first quarter and the strength of the economy could force the central bank to be patient before cutting rates.

Analysis
Target price Zurich Insurance: Barclays upgrades to CHF 520 (515) - Overweight
Price target VAT: UBS raises to CHF 480 (380) - Neutral
Target price Sika: JPMorgan increases to CHF 260 (224) - Neutral
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