Luxury giant LVMH, the owner of Louis Vuitton, reported an improvement in sales growth, a welcome sign the sector could be reaching a turning point from a protracted slump in demand that has taken a toll on most high-end brands. The French luxury-goods conglomerate, which is considered a bellwether for the sector, on Tuesday logged revenue of 18.28 billion euros ($21.15 billion) for the third quarter, 1% higher organically than in the same period a year earlier. In the prior quarter, the group recorded a 4% drop in sales. The result was slightly ahead of analysts’ forecast of €18.24 billion, according to a poll of estimates compiled by Visible Alpha, which also anticipated a 0.6% decline in group revenue. The company’s core fashion and leather goods business, home to brands such as Louis Vuitton and Dior, booked a 2% on-year decrease in quarterly revenue to €8.5 billion. This compares with analysts’ expectations of €8.47 billion, according to the same consensus, and with the 9% decline seen in the second quarter.

Tuesday, the SMI lost 0.4 percent to 12,435 points. Of the 20 SMI stocks, eleven lost ground and nine gained. A total of 19.86 (previously: 14.67) million shares were traded. Despite the uncertainty, investors once again sold off defensive heavyweights Nestlé (-0.4%), Novartis (-0.4%) and Roche (-1.3%). Meanwhile, UBS shares led the list of underperformers, tumbling 2.1 percent. The Swiss Federal Administrative Court (BVGer) ruled that the write-off of AT1 capital instruments worth CHF 16.5 billion ordered by the Financial Market Supervisory Authority (Finma) during the emergency takeover of Credit Suisse was unlawful. However, the court has not yet ruled on a possible reversal of the write-off. Givaudan, on the other hand, improved by 0.4 percent. The fragrance and flavor manufacturer's figures for the first nine months of the financial year were convincing. Insurers, which had been shunned the previous day, registered gains. Swiss Life, Swiss Re, and Zurich posted increases of up to 1.8 percent. A buy recommendation from UBS helped Holcim shares climb 2 percent. Amrize shares, which were spun off from Holcim, advanced by 0.4 percent. UBS analysts reaffirmed their buy recommendation for Sika (0.4%), albeit lowering their price target.

Europe
European stock markets dipped on Tuesday as investors worried about trade tensions between the US and China, which announced sanctions against the US subsidiaries of a South Korean shipyard. The Stoxx Europe 600 index fell 0.4% to 564.54 points. In Paris, CAC 40 and SBF 120 each lost 0.2%. In Frankfurt, the DAX 40 dropped 0.6%, while the FTSE 100 gained 0.1% in London. MICHELIN (-8.9%): The tire manufacturer issued a severe warning about its 2025 results after being penalized in the third quarter by the decline in the US market. KLEPIERRE (+2.1% to €32.80): JPMorgan raised its recommendation on the shopping center operator's stock from “underweight” to “overweight” on Tuesday, while lifting its target price from €31 to €38. PUBLICIS (-1.8%): On Tuesday, the advertising group revised its organic net revenue growth forecast for 2025 upward for the second time this year, as this indicator, equivalent to sales, increased sharply in the third quarter. Shares from so-called defensive sectors such as utilities, real estate, and telecommunications were in demand across Europe. ERICSSON was the top performer in the telecommunications sector, gaining nearly 18 percent. The telecommunications equipment supplier reported sales that were 1 percent above consensus expectations, according to JP Morgan. NOKIA, TELEFONICA, and VODAFONE also posted significant gains, in addition to DEUTSCHE TELEKOM, holding its own. In London, EASYJET surged by a solid 8 percent. Temporarily, the share price had risen even more sharply on takeover speculation.

United States
Trade tensions between the U.S. and China sent stocks on another roller-coaster ride Tuesday, with the Dow Jones Industrial Average cinching its biggest intraday comeback since April. The Dow industrials closed 0.4% higher, up 203 points, while the S&P 500 fell 0.2%. The Russell 2000, a benchmark for smaller U.S. stocks, marched 1.4% higher to close at a record. For the Russell 2000, it was the biggest intraday comeback - as measured by the percentage change from its intraday low to any closing gains - since September 2024. Nasdaq dropped 0.8% on Tuesday, and shares of Nvidia and Intel were among the biggest losers in the S&P 500. Investors also digested a flurry of third-quarter earnings from Wall Street. Goldman Sachs, JPMorgan Chase and Wells Fargo posted better-than-expected results, while BlackRock’s assets under management topped $13 trillion for the first time. Shares of JPMorgan and Goldman Sachs dipped, a sign of the high bar investors having set heading into this earnings season. Corporate earnings reports may be especially crucial in the coming weeks, given that regularly scheduled economic-data releases on inflation and the labor market have been delayed due to the government shutdown. MP MATERIALS (+3.8%), USA RARE EARTH (+2.9%), RAMACO RESOURCES (+4.1%): Rare earth producers continued to rise on Tuesday after two sessions of sharp gains in response to the trade dispute between China and the United States. As a reaction to Beijing's announcement of new restrictions on rare earth exports, Donald Trump threatened on Friday to impose additional tariffs of 100% on products imported from China starting November 1. However, the US president adopted a more conciliatory tone toward Beijing over the weekend.

Asia
After a three-day slump, Asian stock markets are on the road to recovery on Wednesday. The Nikkei 225 rose 1.3 percent to 47,465 points after its previous day's drop. Stock markets in China also picked up: the Shanghai Composite added a modest 0.1 percent, while the HSI in Hong Kong climbed 1.2 percent after significant losses the previous day. Meanwhile, South Korea's Kospi advanced 2 percent.

Bonds
Long-dated U.S. government debt yields slipped on Tuesday. The 10-year Treasury note yield declined by 4 basis points to 4.02%. Treasury yields kept falling as the U.S. bond market reopened following Columbus Day and trade tensions with China continue, fueling demand for safe havens.

Analysis
ABB target price: Royal Bank of Canada upgrades to CHF 55 (51) – Sector Perform
Sonova target price: Goldman Sachs downgrades to CHF 250 (310) – Neutral
Sika target price: UBS downgrades to CHF 225 (285) – Buy

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