Moderna shares climbed 2.4% (-0.7% after-hours trading) on Thursday after a report that the U.S. government is near a deal to fund a late-stage trial of the drugmaker’s experimental mRNA bird-flu vaccine. The funding from the Biomedical Advanced Research and Development Authority, an office within the U.S. Department of Health and Human Services, could total several tens of millions of dollars and include a commitment to purchase vaccine doses if the trial is successful, the Financial Times reported. Within that vaccine stockpile program, the agency already has antigens that are well-matched to the currently circulating strain of H5N1 bird flu, the agency spokesperson said last week. Starting in the middle of this month, the spokesperson said, the agency started the fill and finish process for about 4.8 million doses of vaccine that could be used against the current bird-flu strain. The efforts to step up vaccine research and production come as new human bird-flu cases were reported last week in the U.S. and Australia. Moderna said in the statement that the H5 vaccines in its trial cover the same virus family as the variant circulating in the U.S. The Centers for Disease Control and Prevention said late last week that the risk of bird flu to people in the U.S. remains low but that it is “preparing for the possibility of increased risk to human health.” The H5N1 viruses now circulating don’t easily spread between people, the agency said, but they “could change in ways that allow them to easily infect people and to efficiently spread between people, potentially causing a pandemic.” Moderna shares MRNA have jumped 48.7% in the year to date, while the S&P 500 SPX has climbed 10.4%.

Thursday, the SMI gained 0.6 per cent to 11,870 points. Among the 20 SMI stocks, there were 13 price gainers and seven price losers. A total of 18.32 (previously: 18.95) million shares were traded. After the losses of the previous days, SMI heavyweight Nestle now gained 3.2 per cent and thus played a significant role in the rise of the leading index. Traders cited optimistic statements issued by CEO Mark Schneider during an event organised by investment bank JP Morgan as the reason for the rise in the share price. Analysts' comments moved the share prices of the two pharmaceutical heavyweights Novartis (+0.8%) and Roche (-0.6%). Goldman Sachs had initiated coverage of Novartis with a ‘buy’ rating. However, the analysts recommended selling Roche shares. Lonza (+1.2%) recovered slightly from its recent sell-off. There was also strong demand for Logitech, trading up 2.2 per cent. Richemont (+0.4%) was not affected by the fact that fewer Swiss watches were exported to China in April. Swatch gained 0.7 per cent. Meanwhile, UBS (+0.7%) has put forward candidates for the race to succeed the incumbent CEO Sergio Ermotti. The two leading candidates for Ermotti's successor are Iqbal Khan and Rob Karofsky. Khan, previously the sole head of Global Wealth Management (GWM), will now take over the management of the flagship division together with Karofsky, who previously headed UBS's investment bank. Both were promoted to regional presidents on Thursday.

Europe
European stocks nudged into positive territory on Thursday after the publication of several indicators showing a cooling of the US economy, while investors await new data revealing inflation in the eurozone and the United States to be published on Friday. The Stoxx Europe 600 index rose by 0.6% to 516.5 points. The CAC 40 and SBF 120 in Paris also gained 0.6%, as did the FTSE 100 in London. In Frankfurt, the DAX 40 advanced by 0.1%. The Canadian asset management company Brookfield has entered into exclusive negotiations with Neoen's main shareholders with a view to acquiring 53.32% of the renewable energy producer's capital, at a price of €39.85 per share. This represents a premium of 26.9% on Wednesday's closing price. Trading in Neoen shares was suspended on Thursday. Derichebourg (+6.2%) published lower results for the first half of its 2023-2024 financial year, as the industrial metals recycling specialist suffered from weak demand from its steelmaking customers. Outdoor advertising specialist JCDecaux (+3.1%) announced that it had reached an agreement to sell a 13.56% stake in its Swiss counterpart APG|SGA to the Zurich press group NZZ, for €90.3 million before transaction costs. Anglo-Australian mining group BHP (-1.6% in London) abandoned its plan to take over its British rival Anglo American (+1.2% to 25.10 pounds in London). Late on Thursday afternoon, the European Commission announced that it had given an ‘unconditional’ green light to the takeover of the fixed-line network of telecoms operator Telecom Italia (up 1.6% in Milan) by US investment firm KKR (up 0.7% in New York), paving the way for the completion of a deal worth up to €22 billion.

United States
A big decline in Salesforce shares helped drag stock indexes lower Thursday, masking a broad rally outside of the tech sector. Despite gains in nine out of its 11 sectors, the S&P 500 fell 0.6%. The Dow Jones Industrial Average dropped 0.9%, or around 330 points, while the tech-heavy Nasdaq Composite lost 1.1%. Salesforce alone subtracted 352 points from the Dow. The business-software provider fell 20% after it cut its outlook for subscription and support revenue, citing cooling demand from its customers. That set the tone for other tech stocks, such as Microsoft, which fell 3.4%, and Adobe, which slid 6.6%. Salesforce’s results showed a downside of the recent surge in artificial-intelligence investment. The AI boom has lifted indexes and powered outsize gains in the stocks of several companies, most notably the chip maker Nvidia. But it also means that businesses have less money left over to spend on other expenses, such as enterprise software, analysts said. Thursday’s tech-led decline added to a rough few sessions for the Dow, which fell 411 points Wednesday and is down 2.5% for the week. There were, though, encouraging signs beyond the tech sector. The retailer Best Buy was among the top performers in the S&P 500, advancing 13% after it reported better-than-expected earnings. Real estate led all sectors, climbing 1.5%. Overall, the S&P 500 remains up 9.8% for the year. Investors and officials will gain more clarity about the pace of price increases today, when the Commerce Department releases its latest report on the personal-consumption expenditures price index, the central bank’s preferred measure of inflation. The same report will also include data on consumer income and spending, shaping estimates of how fast the economy is growing this quarter.

Asia
In Asia, major indexes broadly closed with gains. The Shanghai Composite climbed by 0.3 per cent. Hong Kong’s Hang Seng Index gained 0.9 per cent, the strongest performance in the region. Japan’s Nikkei 225 rises by 0.8 per cent after the previous day's losses, while the Kospi in Seoul advances by 0.4 per cent.

Bonds
U.S. government debt yields slipped on Thursday as a revised reading of first-quarter U.S. GDP growth came in below a previous estimate and showed the economy grew at the smallest rate in almost two years. The 10-year Treasury note yield fell by 6 basis points on Thursday to 4.555%. The 2-year Treasury note yield shed 5 basis points to 4.935%.

Analysis
Rating Roche: Goldman Sachs resumes with Sell and target CHF 236
Target price Zurich Insurance: Julius Baer upgrades to CHF 465 (450) - Hold
Rating Novartis: Goldman Sachs resumes with Buy and target CHF 109

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