Swiss Re increased its profit in the first quarter of 2025 despite the impact of the wildfires in California. The reinsurance group is confident with regard to its annual targets. Group profit for the first three months grew to USD 1.3 billion compared to the same period of the previous year, as Swiss Re announced on Friday. However, the Group's insurance turnover fell to USD 10.4 billion after USD 11.7 billion in the previous year. The overall burden of major claims in the segment totalled USD 570 million, with the Los Angeles wildfires accounting for the lion's share. In property and casualty reinsurance (P&C Re), the combined ratio was 86.0 per cent after 84.7 per cent in the previous year. In life business (L&H Re), meanwhile, the reinsurer generated a profit of USD 439 million in the first three months of 2025 (previous year: USD 412 million). Swiss Re clearly exceeded analysts' expectations with its quarterly result. On average, the latter had estimated the quarterly profit at USD 985 million. Despite the challenging environment, the Group remains confident about its targets for 2025.

The Swiss stock market was firmer on Thursday. Support came from domestic economic data: The Swiss economy grew more vigorously than expected in the first quarter. According to observers, however, this reduces the likelihood of the Swiss National Bank (SNB) lowering interest rates into negative territory. A rate cut to 0 per cent is expected at the SNB meeting next month. The Swiss franc trended slightly firmer. The SMI gained 0.8 per cent to 12,227 points. Of the 20 SMI stocks, there were 14 price gainers and six price losers. A total of 18.1 (previously: 19.56) million shares were traded. The leading index was supported by the heavyweights Nestlé (+1.6%), Novartis (+1.1%) and Roche (+1%). Defensive stocks such as Givaudan (+2.5%) and Swisscom (+1.7%) were also in demand. Investors withdrew from Richemont shares (-0.4%) as a precaution ahead of the figures announced for Friday, according to analysts. Swatch fell by 0.5 per cent in the wake of Richemont. Reinsurer Swiss Re will also present its figures on Friday. The share closed over 1 per cent firmer.

Europe
The European stock markets closed in positive territory on Thursday, ignoring less than encouraging economic indicators as attention remained focused on Donald Trump's diplomatic and trade initiatives. The Stoxx Europe 600 index gained 0.6% to 547.0 points. In Paris, the CAC 40 and SBF 120 both pocketed 0.2%. The DAX 40 in Frankfurt added 0.7% and the FTSE in London climbed 0.6%. -THALES (+2.8%), DASSAULT (+2.5%), BAE SYSTEMS (+3.3%), LEONARDO (+4%): The European defence sector was in demand on Thursday as German Chancellor Friedrich Merz promised the day before to give Germany ‘the most powerful conventional army in Europe’ by granting it greater flexibility in its budgetary rules. -ENGIE (+3.6%): on Thursday, the gas and electricity supplier confirmed its targets for 2025, raised in February, following a slight rise in the first quarter, supported in particular by higher distribution network tariffs despite a fall in renewable energy volumes. UBISOFT (-18.2%): The video games publisher published sharply lower results for its 2024-2025 financial year on Wednesday evening and is still planning to spin off its activities by the end of the year in order to make better use of its successful franchises. ALLIANZ (-1.1% in Frankfurt): Europe's largest insurer by market capitalisation declared on Thursday to be on track to meet its targets for the year after first-quarter profit fell short of market expectations, dragged down by rising costs. SIEMENS (-1% in Frankfurt): the German technology giant reported better-than-expected sales and net profit for its second quarter, thanks to a solid performance by its industrial activities.

United States
U.S. indexes closed mixed after a midday rally faded. The Dow industrials rose about 272 points, or 0.7%, to 42322.75. The S&P 500 gained 0.4%. The Nasdaq Composite lost 0.2%. Walmart said it will raise prices in response to tariffs, a move that stands to ripple through the retail industry and the U.S. economy. The company, one of the biggest and most cost-focused U.S. retailers, reported strong results Thursday. Its plans to raise prices this month and early this summer mean Walmart will pass along some of the costs it incurs as tariffed merchandise hits store shelves. Walmart shares fell 0.5%. The company didn’t share a profit forecast for the current quarter, saying it may absorb some tariff costs to keep prices competitive. Across the broader economy, a new report showed retail sales grew just 0.1% in April, slowing from 1.7% a month earlier. Federal Reserve Chair Jerome Powell warned the world could be entering an era of more volatile inflation, with “more frequent, and potentially more persistent, supply shocks-a difficult challenge for the economy and for central banks.” Meanwhile, President Trump turned his sights on India, which he called “one of the highest-tariff nations in the world.” He claimed New Delhi had offered the U.S. a deal where “basically they’re willing to literally charge us no tariffs,” and scolded Apple’s chief executive, Tim Cook, for expanding production in India. Speaking at the same event in Qatar, the president indicated the U.S. was close to a deal in which Tehran would drop its nuclear-weapon ambitions. Such an agreement could in theory lead to higher Iranian crude exports, which are under strict U.S. sanctions. The prospect of more trade deal announcements is keeping some investors bullish on further market advances.

Asia
Asian stocks were mixed on Friday within relatively narrow limits. In Tokyo, the Nikkei 225 index is almost unchanged at 37,748 points, while Hong Kong and Shanghai are down 0.8 and 0.5 per cent respectively. The Kospi in Seoul is up 0.1 per cent and the S&P/ASX-200 in Sydney climbed 0.5 per cent, following the US lead as is often the case. Shares in the video games giant Netease jumped 13 per cent in Hong Kong. In Sydney, Monadelphous increased by 1.5 per cent. The mechanical engineering company informed on newly received orders.

Bonds
Long-dated U.S. government debt yields slipped on Thursday. The 10-year Treasury note yield eased by 9 basis points (0.9 percentage points) to 4.44%. The 2-year Treasury note yield, which is more sensitive to changes in the economy, edged down 9 basis points to 3.959%. U.S. Treasuries' spread over swap rates, an indicator of stress in the market, has tightened, meaning volatility in U.S. Treasuries has been coming down.

Analysis
Rating Forbo: Kepler Cheuvreux downgrades to Reduce (Hold) - Target CHF 790 (885)
Target price Clariant: Bernstein SG lowers to CHF 10.10 (12) - Market Perform
Target price Sonova: Goldman Sachs cuts to CHF 310 (335) - Neutral