UBS Group returned to net profit for the first quarter after posting losses for the prior two quarters, helped by lower expenses related to its takeover of rival Credit Suisse. The Swiss banking giant said Tuesday that it made a net profit of $1.755 billion for the first three months of the year, compared with $1.03 billion for the same period last year. Analysts had expected a net profit of $602 million, according to consensus estimates provided by the bank. The bank had previously indicated that it expected first-quarter net profit to improve, lifted by positive revenue trends and lower integration-related expenses of around $1 billion. Revenue for the quarter was $12.74 billion, up from $8.74 billion. Costs linked to the integration of Credit Suisse came to $1.02 billion for the quarter, the bank said. This represented a significant decline from $1.75 billion and $2.00 billion in the two preceding quarters, respectively.

The Switzerland market ended on a firm note on Monday, moving higher for a second straight session, on optimism several central banks, including the Federal Reserve and the ECB will soon start reducing interest rates. The benchmark SMI, which climbed to 11,381.81, ended the day's session with a gain of 54.71 points or 0.49% at 11,327.66. Logitech International climbed nearly 2.5%. Swiss Re ended almost 2% up. Geberit gained about 1.8%, Zurich Insurance Group added 1.59% and Swiss Life Holding gained 1.51%. Holcim, UBS Group, Kuehne & Nagel, ABB and Julius Baer gained 1 to 1.28%. Partners Group, Schindler Ps and Roche Holdings posted moderate gains. Avolta, Helvetia, ams OSRAM AG, Georg Fisher and BKW also closed higher. SIG Group drifted down 1.39%. Nestle, Swatch Group and Lonza Group ended modestly lower.

Europe
European stocks closed on a bright note on Monday, lifted by optimism about interest rate cuts by the Federal Reserve and the European Central Bank in the foreseeable future, and data showing improvement in Eurozone investor confidence and an acceleration in private sector growth. The pan European Stoxx 600 climbed 0.53%. Germany's DAX jumped 0.96%, while France's CAC 40 ended 0.49% up, while Switzerland's SMI both ended higher by 0.49%. The London Stock Exchange was closed today for a Bank Holiday. Among other markets in Europe, Austria, Belgium, Denmark, Finland, Greece, Netherlands, Norway, Poland, Spain and Sweden closed higher. Iceland, Russia and Turkiye ended weak, while Portugal closed flat. Media reports quoted European Central Bank Chief Economist Philip Lane as saying that inflation is returning to the target in a timely manner and hence there is a stronger case for June rate cut. He is one of the six members of the Executive Board of the European Central Bank, along with President Christine Lagarde and Vice President Luis de Guindos. In economic releases, Eurozone's PMI services index was finalized at 53.3 in April, marking a notable improvement from March's 51.5. The Eurozone Sentix Investor Confidence rose from -5.9 to -3.6 in May, beating expectations for a score of -4.8 and marking the seventh consecutive increase. Data from Eurostat showed Eurozone producer prices fell 7.8% year-over-year in March, slightly slower than the revised 8.5% decrease in February. Prices were expected to decline by 7.7%. The euro area private sector growth accelerated to an 11-month high in April driven by the service sector, final survey results from S&P Global showed on Monday.

United States
Stocks showed a strong move to the upside during trading on Monday, extending the rally seen to close out the previous week. With the continued advance, the major averages reached their best closing levels in almost a month. The Nasdaq and the S&P 500 reached new highs for the session going into the close of trading, The Nasdaq surged 192.92 points or 1.2 percent to 16,349.25, the S&P 500 jumped 52.95 points or 1.0 percent to 5,180.74 and the Dow climbed 176.59 points or 0.5 percent to 38,862.27. Stocks continued to benefit from the upward momentum seen over the two previous sessions, which partly reflected renewed optimism about the outlook for interest rates. Among individual stocks, shares of Bausch + Lomb moved sharply higher on the day after Morgan Stanley upgraded its rating on the eye care company's stock to Overweight from Equal Weight. Media and entertainment giant Paramount Global also surged after a report from the New York Times said the company decided to formally open negotiations with a bidding group led by Sony Pictures Entertainment and the private equity giant Apollo. Meanwhile, shares of Spirit Airlines (SAVE) plummeted after the discount carrier reported a slightly wider than expected first quarter loss and provided disappointing second quarter revenue guidance. Semiconductor stocks showed a substantial move to the upside over the course of the session, driving the Philadelphia Semiconductor Index up by 2.2 percent to its best closing level in almost a month.

Asia
With the exception of the stock exchanges in Shanghai (-0.1 per cent) and Hong Kong (-0.9 per cent), the stock markets in East Asia and Australia rose in the course of trading on Tuesday. Seoul leads the way with a gain of 1.9 per cent, followed by Tokyo, where the Nikkei-225 rises by 1.4 per cent to 38,758 points. There is pent-up demand in both places. Due to public holidays on Monday, there is a delay in reacting to the hopes of interest rate cuts, which have been rekindled by the favourable U.S. labour market data for April.

Bonds
In the U.S. bond market treasuries showed a lack of direction over the course of the session before closing roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down 1.1 basis points to 4.489 percent.

Analysis
UBS raises Prosus to 50 (46) EUR – Buy
JP Morgan raises Intesa Sanpaolo to EUR 4.10 (4) – Overweight
Jefferies raises Daimler Truck target to EUR 56 (55) – Buy

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