Merck is making a big bet that its new drug, approved Tuesday in the U.S. for a potentially fatal lung disease, will take the company a long way toward heading off a massive revenue decline later this decade. The drug, which will sell under the name Winrevair, treats a condition called pulmonary arterial hypertension that affects nearly 40,000 people in the U.S. In 2021, Merck paid $11.5 billion for the company developing the medicine. Some analysts estimate sales as high as $7.5 billion a year.
Merck is counting on the blockbuster performance. More than 40% of the drug company’s revenue, some $25 billion last year, comes from cancer treatment Keytruda. The immunotherapy is the world’s top-selling drug. Merck’s main U.S. patent for it expires in 2028, opening the door for lower-cost versions to eat into sales. In electronic trading after the close on Wall Street, Merck shares gained almost 5%.

Tuesday, the SMI gained 0.4 per cent to 11,680 points. Among the 20 SMI stocks, there were 15 price gainers and five price losers. A total of 18.73 (previously: 18.63) million shares were traded. The SMI was supported by the heavyweights Nestle (+0.8%) and Roche (+0.8%). Lonza (+1.5%) and Swisscom (+2%) were in high demand. Kühne + Nagel improved by 1.8 per cent. Reallocations stemming from the shares of Danish Moeller Maersk may have played a role here. Its share price had come under pressure on Tuesday after a container ship chartered by the Danish logistics company rammed into a bridge in Baltimore and caused it to collapse. Docmorris lost 5.6 per cent to 82.15 francs among second-tier stocks. The shares did not benefit from the fact that Baader Helvea raised its price target to 100 from 60 francs and reiterated its "Add" rating.

Europe
European stocks made progress on Tuesday in cautious trading, as investors looked ahead to some key U.S. inflation data at the end of the week. The Stoxx Europe 600 index gained 0.2% to 511.09 points, setting a new closing record. In Paris, the CAC 40 and SBF 120 indexes advanced by 0.4%, also setting new highs. In Frankfurt, the DAX 40 gained 0.7%, beating its record of the previous day, while the FTSE 100 climbed 0.2%. Oil products distributor Rubis jumped 12.5% to €31.60. The digital services company Atos (+0.7%) announced on Tuesday that it had entered into an amicable conciliation procedure with its financial creditors aimed at renegotiating its debt. Atos also published on Tuesday a higher-than-expected net loss of €3.44 billion in 2023. Retail group Carrefour (-0.8%) confirmed on Tuesday that it had reached an agreement to buy 3.5% of its capital from the Moulin family, owners of Galeries Lafayette. Berenberg lowered its recommendation for the shares of car manufacturer Stellantis (-2.1% to €26.59) from "buy" to "hold", while raising its target price from €21 to €29. At the same time, the financial intermediary reiterated its "buy" recommendation for Renault (up 2.7% at €46.80) and raised its target price for the stock from €47 to €52. Goldman Sachs upgraded its recommendation for BNP Paribas (+2.9% to €64.31) from "neutral" to "buy" and lifted its target price from €74.70 to €82.60.

United States
Stocks fell on Tuesday, continuing to fall from recent all-time highs. The S&P 500 lost 0.3%, while the tech-heavy Nasdaq slid 0.4%. The blue-chip Dow industrials dropped 0.1%, or about 31 points. Micron Technology added 1.4%, after hitting an all-time high a day earlier. The memory-chip maker is on pace for its best month since December 2009, when it rose 40%. Other top performers included data-storage company Seagate Technology, rising 7.4%, and Tesla, which climbed 2.9%. International Paper shares sank 6.5% after the cardboard-box maker revealed an all-stock takeover offer for DS Smith. The deal values its U.K. rival at more than $7 billion. Shares of GameStop, meanwhile, dropped in after-hours trading after rising 2.5% during the regular session. The videogame retailer’s fourth-quarter sales fell year-over-year. Donald Trump is primed for a financial boost now that the parent company of his social-media platform, Truth Social, is trading on the Nasdaq. Lifted by supporters of the former president, shares of the company soared 16% from the SPAC’s last closing price. It rose as much as 59% during volatile trading. Krispy Kreme shares jumped 39% on Tuesday after the company said it has reached a deal to sell its doughnuts at McDonald’s restaurants across the U.S. Elsewhere in sugary investments, most-active cocoa futures topped $10,000 a metric ton for the first time, continuing a recent surge.

Asia
Asian stocks were mixed on Wednesday. Tokyo saw the sharpest rise, up 1.3 per cent to 40,936 points. Seoul was little changed. Market participants in South Korea reported that gains from the previous day, such as Samsung Electronics (-0.6 per cent) and Hanmi Semiconductor (-1.6 per cent) in particular, were capitalised on. In Hong Kong (-1.1%), the previous day's gains were lost again. China Mengniu Dairy fell by around 7 per cent. The producer of dairy products reported a lower net profit for 2023. Alibaba shed 2.3 per cent in the wake of the plan to float its logistics subsidiary Cainiao on the stock exchange being dropped.

Bonds
U.S. Bond prices fell as yields rose after the durable-goods and home-price data. In the afternoon, strong investor demand for a record $67 billion U.S. Treasury Department auction of 5-year notes relieved the upward pressure on bond yields. The 10-year U.S. Treasury note yield finished Tuesday at 4.233% from 4.252% the prior day, halting its recent climb. The 2-year Treasury note was yielding 4.589%, virtually unchanged.

Analysis
Price target Lindt&Sprüngli: Julius Baer upgrades to CHF 127,000 (126,000) - Buy
Rating Givaudan: GS resumes with Buy and target 4600 CHF
Rating Clariant: GS resumes with Neutral and target CHF 13

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