Boeing has been awarded a contract from Lockheed Martin worth approximately $14.7 billion to increase production of PAC-3 Missile Segment Enhancement (MSE) seeker heads. Boeing stated that this non-binding contract will enable the company to triple production of PAC-3 MSE seeker heads under its existing seven-year master agreement with the Department of Defense. The company said it has invested in the plant that manufactures the seeker heads and strengthened its relationships with its suppliers. The ramp-up in production and associated hiring began earlier this year, Boeing noted. “Early investment and a constant focus on quality and execution have enabled us to deliver seeker heads today at unprecedented short-term rates, and we are committed to maintaining this momentum,” declared Steve Parker, president of Boeing Defense, Space & Security.

The Swiss stock market posted slight gains again on Monday. The SMI added 0.3 percent to 13,704 points. Across Europe, financial stocks outperformed the broader market; UBS rose 1.3 percent in Switzerland, while Partners Group gained 0.7 percent. Among the defensive pharmaceutical heavyweights, Novartis increased by 0.1 percent and Roche climbed 0.9 percent. Nestlé (-0.4%), another heavyweight, lagged behind the market. Buoyed by a positive analyst comment from Barclays, Givaudan rose 0.6 percent. According to UBS, expectations of a recovery in the luxury sector this year have proven to be premature. Among others, UBS favours Richemont in the sector; its stock price rose 1 percent.

Europe
With the exception of the Paris market, European stock markets started the week with slight gains. According to MarketWatch data, the Stoxx Europe 600 index rose 0.4% on Monday to 633.6 points. In Frankfurt, the DAX 40 edged up 0.1%, and the FTSE 100 gained 0.3% in London. In contrast, the CAC 40 and the SBF 120 declined by 0.8% and 0.7%, respectively, in Paris. SCHNEIDER ELECTRIC (-10%): The electrical equipment manufacturer announced on Monday that it had reached a definitive agreement to acquire the U.S. engineering software company PTC for an enterprise value of $23.7 billion, or approximately 21.1 billion euros. HERMES (-1%, to 1,286 euros): On Monday, UBS downgraded its recommendation on the luxury group’s stock from “neutral” to “sell” and lowered its price target from 1,695 euros to 1,168 euros. AIR LIQUIDE (+0.4%): the industrial gas specialist unveiled a massive investment and shareholder return plan through 2030. The group plans to deploy 40 billion euros in growth investments and shareholder returns by 2030. This figure includes the acquisition of DIG Airgas, which was completed earlier this year for 2.9 billion euros.

United States
The Nasdaq finished Monday at 27,477, about 1% above its previous record in September. The S&P 500 rose 0.7%, less than 1% from an all-time high. The Dow industrials advanced 0.2%, or 91 points. Meanwhile, one of the most prevalent themes of the bull market prevailed again Monday: tech stocks leading the market higher, with AI giant Nvidia NVDA closing at a new all-time high for the first time since May. Memory plays like Western Digital WDC and Seagate Technology STX were among the biggest gainers in the S&P 500, and the Magnificent Seven stocks closed at a new market cap high, with a combined market value of $24.8 trillion. Monday’s equity gains were broad-based: All but one S&P 500 sector closed in the green. Reportedly, GE Healthcare is on the verge of acquiring Sofie Biosciences, a manufacturer of medical imaging materials, for $945 million. Vaxcyte shares surged 31 percent to $73.82 after the drugmaker’s experimental pneumonia vaccine performed well in a late-stage clinical trial compared to two currently available vaccines.

Asia
Asian stock markets showed a predominantly positive trend on Tuesday. The Shanghai Stock Exchange remains closed through Wednesday due to a holiday. On the Hong Kong stock market, the Hang Seng Index is up 0.8 percent. In Seoul, the KOSPI is down 1.4 percent following the long holiday weekend, bucking the positive regional trend. The index is being weighed down by heavyweights Samsung Electronics (-1.7%) and SK Hynix (-3.3%). LG Electronics rose 7.4 percent. The company secured a multi-year contract to supply cooling systems for data centers in the U.S. On the Tokyo Stock Exchange, the Nikkei 225 Index climbed 0.7 percent. The broader Topix rose 0.8 percent.

Bonds
On Monday, the 10-year Treasury note yield advanced to 5.310%, after touching a new two-decade high above 5.34% in afternoon trading. Just a few weeks ago, yields were rising much faster on short-term Treasuries than long-term Treasuries, reflecting escalating expectations for how high the Federal Reserve will raise short-term interest rates. But that has shifted in recent days: Since Sept. 23, the yield on the 10-year note has climbed around 0.2 percentage point while the 2-year Treasury note yield has actually dropped—causing what is known on Wall Street as a steepening yield curve.

Analysis
UBS lowers EssilorLuxottica target to 247 (282) EUR - Buy
UBS cuts Richemont target to 210 (221) CHF - Buy
UBS reduces Burberry target to 1,320 (1,425) GBp - Buy


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