Nike posted a surprise sales increase in its latest quarter on strength in North America but cautioned that weakness in China may stymie some turnaround progress going forward. The sportswear brand said Tuesday revenue rose 1% in its latest quarter, reversing several quarters of declines and beating prior guidance for a mid-single-digit decrease. It expects revenue down at a low-single-digit rate in the current quarter, noting that its turnaround may not follow a straight path as parts of its business recover on different timelines. The region’s wholesale business also returned to growth, helped in part by expanded distribution, the company said, noting stronger-than-expected sales from the relaunch of its store on Amazon.com. The stock rose 4.48% to $72.85 in late trading. Shares are down 7.9% year-to-date through the market close. Margins in the recent quarter fell due to lower average selling price, reflecting higher discounts, as well as higher tariffs in North America, the company said.

On Tuesday, the SMI edged up 0.9 percent to 12,109 points. Of the 20 SMI stocks, 16 gained and 4 lost ground. Trading volume was 20.83 (previous: 16.15) million shares. Among individual stocks, Roche shares jumped 1.4 percent. Clinical data has shown that the sixth-generation troponin T test offers a new level of accuracy that is crucial for the diagnosis of heart attacks, the company informed. Novartis shares climbed 1.0 percent, while Nestle closed 1.3 percent higher. In contrast, UBS lost 0.4 percent. The bank sees risks for its location and business model against the backdrop of planned new capital requirements in Switzerland. Kuehne & Nagel dropped 1.8 percent. An oversupply of ships and weak US consumer demand have caught up with container shipping, pushing freight rates to their lowest level in two years.

Europe
European stock markets closed higher on Tuesday. The Stoxx Europe 600 index gained 0.5% to 558.1 points. In Paris, the CAC 40 and SBF 120 each nudged up 0.2%. In Frankfurt, the DAX 40 climbed 0.6%, while the FTSE 100 in London added 0.5%. SANOFI (+0.3%): The European Commission announced on Tuesday that it had conducted unannounced inspections at the premises of a company active in the vaccine sector and suspected of “abuse of a dominant market position.” Sanofi confirmed to the Agefi-Dow Jones agency that representatives of the European Commission had visited its premises in France and Germany on Monday, September 29, as part of an investigation into practices related to the seasonal flu vaccine. STELLANTIS (-1.6%): Car manufacturer Stellantis announced on Tuesday that it would halt assembly operations at its Mulhouse and Sochaux plants for several days in October as part of a broader effort by the group to adjust its production in Europe to market realities. VALNEVA (+8.3%): The vaccine manufacturer released positive data on Tuesday showing that antibodies remained four years after vaccination with a single dose of its Ixchiq vaccine against chikungunya.

United States
A rally in pharmaceutical stocks helped lift major indexes Tuesday, overcoming worries about a government shutdown and new data pointing to a decline in consumer confidence. Overall, the S&P 500 rose 0.4%. The Dow Jones Industrial Average ticked up 0.2% to a new all-time high, while the Nasdaq composite gained 0.3%. In a relatively quiet trading session, stocks opened lower but rallied in the afternoon after President Trump unveiled a direct-to-consumer website for Americans to buy drugs. Trump said that Pfizer would offer some of its drugs on the site and would introduce new drugs to the U.S. market at reduced prices. In return, the company will get a three-year exemption from national-security-related tariffs, as long as it invests in domestic manufacturing, Pfizer said. Trump also said his administration is working with other companies, including Eli Lilly, to secure “similar agreements.” Pharmaceutical stocks jumped on the news, with Pfizer shares surging 6.8%, Eli Lilly stock climbing 5% and Johnson & Johnson shares adding 2.1%. Before the healthcare-led rebound, stocks had been weighed down by the imminent threat of a government shutdown, with federal agencies set to partially close at 12:01 a.m. Wednesday. Economic data also dragged on indexes, particularly a report from The Conference Board that showed its consumer-confidence index fell more than expected in September. The shutdown would delay the release of major economic data. But the Federal Reserve will still have access to its own reports and private-sector data, and most investors expect the central bank will cut interest rates at its next meeting in about a month, regardless of whether the government has reopened.

Asia
Asian stocks were mixed on Wednesday. Stock exchanges in Hong Kong and mainland China were closed for National Day celebrations. In Tokyo, interest rate hike fears pushed the Nikkei 225 index down 1.0 percent to 44,503 points. On the Seoul stock market, the Kospi is up 0.8 percent, led by technology stocks, which in turn are following their US counterparts upwards.

Bonds
Long-dated U.S. government debt yields edged higher on Tuesday. The 10-year Treasury note yield added 1 bp to 4.15%. Political pressure on the Federal Reserve, cooling jobs and sticky inflation supported Treasuries and pushed yields down for the third consecutive quarter.

Analysis
Morgan Stanley raises ABB to CHF 52 (48) – Equalweight
Sonova target price: Barclays lowers to CHF 215 (225) – Underweight
CFT target price: Octavian upgrades to CHF 261 (249) – Hold

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