Rexel shares rose Monday after it rejected an offer from QXO, the U.S. company led by billionaire entrepreneur Brad Jacobs, saying the bid was well below its value. The French electrical-supplies distributor said Sunday that it refused an offer of up to 28.40 euros a share, which values the bid at 8.62 billion euros ($9.55 billion), according to a share count provided by the company. “Rexel’s board of directors has reviewed the proposal in detail and has unanimously decided not to pursue it, considering that it significantly undervalues the company and does not reflect its value-creation potential through its Power Up 25 strategic plan,” the company said. Berenberg analysts agreed with the sentiment, citing the stock’s strong gains over the past five years on organic growth and expanded margins.

The Swiss stock market got off to a cautious start this week and ended on a slightly negative note. Caution is the order of the day on the markets, as the US Federal Reserve (Fed) Monetary Committee holds its traditional two-day meeting on Tuesday and Wednesday, at the end of which the Fed is expected to cut its key rates for the first time since 2020. The SMI ended down 0.26% at 12,005.47 points, with a low of 11,976.92 and a high of 12,057.68. The SLI lost 0.29% to 1954.28 points and the SPI 0.30% to 15,957.58 points. Of the 30 leading stocks, 19 fell and 11 rose. Financials Zurich Insurance (+0.8%), Swiss Life (+0.4%) and Swiss Re (+0.3%) occupied the day's podium, along with Novartis (+0.3%). The pharma heavyweight repeated the success of a phase III study with its drug Kisqali against recurrence of breast cancer. Roche (good -0.6%, bearer -0.5%) and Nestlé (-1.0%) were among the day's losers. Roche's US subsidiary Genentech received approval from the US Food and Drug Administration (FDA) for its subcutaneous drug Ocrevus for the treatment of patients suffering from multiple sclerosis. Analysts at Morgan Stanley have lowered their recommendation for the Vevey-based giant's shares to ‘underweight’ from ‘equal weight’. Their target price was reduced from CHF 97 to CHF 84. Chocolate maker Lindt (good -0.4%) has issued two bonds for 425 million maturing in 2030 and 2034.

Europe
European stocks closed broadly lower on Monday after a cautious session as investors awaited the monetary policy announcements from the Bank of England and the U.S. Federal Reserve. The Bank of England is scheduled to announce its monetary policy on Thursday. The pan European Stoxx 600 ended down 0.16%. The U.K.'s FTSE 100 edged up 0.06%, Germany's DAX and France's CAC 40 closed lower by 0.35% and 0.21%, respectively, and Switzerland's SMI ended down 0.26%. In the UK market, Phoenix Group Holdings dropped more than 5%. Melrose Industries ended 2.57% down, and Spirax Group closed down 2%. Scottish Mortgage, Prudential, Sage Group, Entain, Beazley, Croad International and Rolls-Royce Holdings closed lower by 1 to 1.5%. JD Sports Fashion climbed 3.6%. Marks & Spencer ended nearly 3% up, while Kingfisher, Associated British Foods, Tesco, Sainsbury (J), Diploma, IG, 3i Group, Hargreaves Lansdown, Fresnillo, Vodafone Group, Compass Group and Next ended up 1 to 2.2%. In the German market, Sartorius and Infineon, both ended lower by about 2.5%. Brenntag, Volkswagen, Fresenius, Covestro, Merck, Fresenius Medical Care, BMW, RWE, MTU Aero Engines and Bayer closed down 1 to 2%. Zalando climbe nearly 2%. E.ON, HeidelbergCement, Hannover Rueck, Qiagen and Porsche posted moderate gains. In the French market, STMicroElectronics ended down by about 3.6%. Dassault Systemes, Capgemini, Kering, Edenred, Teleperformance and Hermes International lost 1 to 2%. Bouygues, Veolia, Unibail Rodamco, Carrefour, Engie, Societe Generale, Legrand and Pernod Ricard closed higher. In economic news, the euro area trade surplus increased notably in July due to the sharp rebound in exports, Eurostat reported Monday. On an unadjusted basis, the trade surplus rose sharply to EUR 21.2 billion in July from EUR 6.7 billion in the same period last year. In June, the surplus was EUR 21.7 billion.

United States
U.S. stocks ended on a mixed note on Monday as investors looked ahead to the Federal Reserve's monetary policy announcement later this week, and stayed largely cautious and selective with regard to their moves. Among the major averages, the Dow hit a new record high and ended up 228.30 points or 0.55 percent at 41,622.08, and the Nasdaq closed lower by 91.85 points or 0.52 percent at 17,592.13, while the S&P 500 settled at 5,633.09 with a small gain of 7.07 points or 0.13 percent. The Fed is widely expected to lower interest rates, but there remains some debate about the size of the rate cut. CME Group's FedWatch Tool is currently indicating a 65.0 percent chance of a half point rate cut and a 35.0 percent chance of a quarter point rate cut. Whether the Fed decides to cut rates by 25 or 50 basis points, the central bank is still expected to continue lowering rates over the remainder of the year. Oracle Corporation climbed more than 5 percent. Meta Platforms, Accenture, Cisco Systems and IBM also closed notably higher. Bank of America, Wells Fargo, Goldman Sachs, JP Morgan Chase, Citigroup, Bank of America and Morgan Stanley posted strong gains. Visa Inc. and Mastercard also ended on a firm note. Exxon Mobil Corporation and Chevron Corporation recorded impressive gains. Procter & Gamble, Merck, Abbot Laboratories and Pfizer moved up sharply. T.Mobile, Linde, GE Aerospace, Verizon Communications, Blackstone, AT&T, Nike and Walt Disney also moved notably higher. Tesla, Broadcom, Adobe Inc., Amazon, Nvidia Corporation, Apple Inc. and Intuit Inc. ended with sharp to moderate losses.

Asia
The East Asian stock markets showed no uniform trend in trading on Tuesday. In Tokyo, on the other hand, the markets fell sharply after the holiday break on Monday, weighed down above all by the persistently strong yen. However, participants are also focussing on the Bank of Japan's (BoJ) interest rate decision later in the week. In contrast, trading in South Korea and mainland China is suspended due to national holidays. Hong Kong is taking a one-day public holiday break in the middle of the week.

Bonds
U.S. treasury yields edged lower. The two-year yield inched down, while the benchmark 10-year yield also declined to 3.622%, the lowest since June 2023.

Analysis
Dt. Bank raises Siemens Energy to EUR 31 (29) – Buy
UBS raises Roche to CHF 270 (238)/Neutral – Trader
Citi lowers MTU to Sell (Neutral)/250 (228) EUR – Trader

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