Staffing and recruitment specialist Adecco has published third-quarter results below expectations and down year-on-year, against a difficult macroeconomic backdrop. Between July and September, the temporary employment agency recorded a 4% decline in sales to €5.7 billion. Organic growth was negative at -5%, according to a press release issued on Tuesday. However, this performance was considered ‘solid given market conditions and the high basis for comparison’. In terms of profitability, gross operating profit (Ebita) excluding one-off effects slumped by 21% to CHF 186 million, for a corresponding margin of 3.3%, down 70 basis points. Net profit fell by 4% to 99 million. Management notes that volumes stabilized in October and expects business in the final quarter to be similar to that of the third quarter.

On Monday, the SMI lost 0.6 per cent to 11,897 points. Among the 20 SMI stocks, there were 17 losers and three winners. A total of 13.12 (previously: 17.13) million shares were traded. Richemont and Swatch lost 1.3 and 0.3 per cent respectively. In Switzerland, stricter banking regulation may be on the horizon, UBS dropped 0.8 per cent. Clariant was unchanged on the capital market day, demonstrating relative strength after the chemical company reaffirmed its medium-term targets. Among other small caps, the price of Relief Therapeutics rose by 0.3 per cent. The biotechnology company is planning a merger with Renexxion in the USA.

Europe
The European stock markets lost ground on Monday on the eve of the event most eagerly awaited by the markets at the end of the year: the US presidential election. The Stoxx Europe 600 index fell by 0.3% to 509.2 points. In Paris, the CAC 40 and SBF 120 lost 0.5% each. The DAX 40 in Frankfurt was down 0.6%, while the FTSE 100 clawed back 0.1%. Schneider Electric fell by 2.3% after it was announced that CEO Peter Herweck would be replaced by Olivier Blum. This decision follows ‘disagreements’ with Peter Herweck at a time of ‘significant opportunities’, said the group. Emeis (formerly Orpea) and Clariane continued to rebound after the two retirement home operators published improved results at the end of October. Emeis gained 3.8% and Clariane 2.1%. Semiconductor manufacturer STMicroelectronics lost 3% to €24.11, weighed down by two brokers. Burberry gained 4.5% on the London Stock Exchange following press reports of a possible bid for the British tailor by the Italian group Moncler (-2.1% in Milan). According to the website Miss Tweed, the Italian down jacket manufacturer could make a bid for the British group with the aim of creating a giant specialising in outdoor activities.

United States
U.S. stocks edged lower, with elements of the so-called Trump trade appearing to falter ahead of Tuesday’s election. Treasury yields declined, the dollar weakened, financial stocks dropped and shares of private-prison operator GEO Group fell 1.9%. At the same time, shares of Trump Media & Technology Group, the parent company of Donald Trump’s Truth Social network, saw its price jump 12%. The S&P 500 slipped 0.3%, while the Dow Jones Industrial Average retreated 0.6%, or about 258 points. The tech-heavy Nasdaq Composite edged down 0.3%. Even if investors knew the outcome of the election, they might not be able to predict how markets will react. In 2016, Trump’s upset win sparked a sharp decline in U.S. stock futures before major indexes rallied to end the day higher. Oil prices rose, with global benchmark Brent crude gaining 2.7% to $75.08 a barrel. The Organization of the Petroleum Exporting Countries and its allies delayed a planned production increase, and traders continued to worry about the risk of an Iranian counterattack on Israel. Seven of the S&P 500’s 11 sectors fell, including the financials group, which dropped 0.7%. Some investors think banks would benefit if Trump is elected and supports lighter regulation. Among individual stocks, Berkshire Hathaway’s Class B shares declined 2.2% after the company reported that operating earnings fell from a year earlier while its cash pile grew to a record $325 billion. Warren Buffett’s company also disclosed that it continued to slash its position in Apple. The iPhone maker’s shares slipped 0.4%. Nvidia and Sherwin-Williams shares jumped 0.5% and 4.6%, respectively, after S&P Dow Jones Indices said the companies will be added to the Dow Jones Industrial Average. They will replace Intel and Dow Inc., which dropped 2.9% and 2.1%.

Asia
In Asia, major indexes broadly closed with gains on Tuesday. The Japanese Nikkei index rose by 1.3 per cent to 38,552 points after the holiday break on Monday, fuelled by hopes of good company results, according to traders. The weaker yen is also providing support. In Shanghai, the market barometer increased by 1.8 per cent, in Hong Kong by 1.2 per cent. In South Korea, however, the Kospi fell by 0.5 per cent after its rally the previous day. Among the individual stocks in Hong Kong, technology stocks such as Sunny Optical (+9.0 per cent) and the semiconductor stock SMIC (6.8 per cent) are in demand. In Seoul, NCsoft lost 1.1 per cent following business figures below expectations. Index heavyweight Samsung Electronics dropped 1.9 per cent. In Tokyo, Mitsubishi Heavy Industries lost 2.5 per cent after the presentation of its figures.

Bonds
U.S. Treasury yields broadly fell on Monday, reversing most of the previous session’s action, after a key poll gave Vice President Kamala Harris an edge over former President Donald Trump ahead of Tuesday’s election. The 10-year Treasury note yield shed 6 basis points to 4.299%. The 2-year Treasury note yield dropped 3 basis points to 4.176%.

Analysis
Stifel downgrades VAT to CHF 400 (440) - Hold
Deutsche Bank raises Sandoz to CHF 36 (33) - Hold
Stifel lowers Georg Fischer to CHF 73 (78) - Buy

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