As expected, Novartis felt the significant impact of generic drugs at the start of the year. Nevertheless, management confirmed its forecast for the rest of the year on Tuesday. Revenue for the first quarter came in at $13.1 billion. This represents a 1 percent decline compared to the same period last year. On a constant currency basis (cc), revenue declined by 5 percent. By comparison, revenue had risen by 1 percent in the fourth quarter of 2025 and by 8 percent in the third quarter. According to its own earlier statements, the pharmaceutical company will face the greatest impact from generic drugs in its history in the coming months, as the billion-dollar drugs Entresto, Promacta, and Tasigna have lost their patent protection. Operating profit for the Basel-based company dropped 9 percent to 4.2 billion. The bottom line was a net profit of 3.2 billion, down from 3.6 billion in the same period last year. For analysts, the key figure is the core operating profit, adjusted for various factors. At 4.9 billion, the core operating profit sank by 12 percent, falling short of the analyst consensus of 5.2 billion.

The Swiss stock market barely budged at the start of the week. The SMI closed virtually unchanged at 13,165 points. A number of key corporate earnings reports are on the agenda in Switzerland this week. Novartis presented its first-quarter results on Tuesday morning. The stock rose 0.3 percent on Monday ahead of the announcement. Shares of the other two heavyweight index, Nestlé and Roche, fell by 0.9% and 0.3%, respectively. UBS’s quarterly results will follow on Wednesday (+1.8%). Among the losers in the blue-chip segment on Monday were insurers such as Swiss Re (-1.0%), Zurich (-1.3%), and the defensive stock Swisscom (-1.8%). On the upside, Lonza and UBS each advanced 1.8 percent. Both stocks had shed value last week, with the major bank weighed down by the capital-intensive Federal Council proposal on banking regulation. Amrize will reveal its quarterly results on Wednesday and gain 1.3 percent on Monday.

Europe
The European stock markets kicked off the week on a negative note. The Stoxx Europe 600 index fell 0.3% on Monday to 608.8 points. In Paris, the CAC 40 and the SBF 120 each dropped 0.2%. In Frankfurt, the DAX 40 also slipped 0.2%, and the FTSE 100 gave up 0.6% in London. RENAULT (+2.9%): The French automaker benefited from an upward revision of the outlook by its Japanese partner Nissan. GETLINK (-0.5%): Italian highway and airport infrastructure operator Mundys announced Friday evening that it had fully exercised its option to increase its stake in the French operator of the Channel Tunnel to 25% of the capital and 29.9% of the voting rights. EXOSENS (+0.2%): The manufacturer of high-tech sensors for the defense and nuclear sectors unveiled slightly higher-than-expected revenue for the first quarter of 2026 on Monday and confirmed its financial targets for the current fiscal year. FORVIA (+0.1%): The automotive supplier is selling its interior division to private equity firm Apollo for an enterprise value of €1.82 billion. It was an expected deal, given that the group had indicated last week the sale of this division, which accounts for about 18% of its revenue and employs more than 31,000 people worldwide, was nearing completion.

United States
After wavering in early trading, major U.S. stock indexes were mixed on Monday. The S&P 500 inched 0.1% higher, while the Nasdaq composite advanced 0.2%, both adding to the record highs they set Friday. Chip stocks including Broadcom and Advanced Micro Devices fell, cooling off after a historic climb and weighing on broader benchmarks. The Dow Jones Industrial Average edged 0.1% lower, or 63 points. Rising shares of Nvidia and Alphabet nudged stocks to new records on Monday, while shares of consumer companies fell. Shares of Domino’s Pizza led declines in the S&P 500 index, after the company lowered its U.S. same-store sales growth estimates for the year and said sales softened during the first quarter. What’s dragging on the pizza-delivery business? Falling consumer sentiment, rising gas prices and the fact that cash-strapped customers are starting to cut back, Domino’s executives said. The stock tumbled 8.8% after the results to its lowest closing level since 2023. Stocks in the consumer-staples and consumer-discretionary sectors slumped Monday: Dollar Tree slid 5.5%. Ulta Beauty fell 3.4%, while Taco Bell’s parent Yum Brands dropped 3.2%. Companies that sell consumer goods like food, clothes or cleaning products are starting to feel the pinch as lower-earning consumers tighten their budgets in the face of higher energy costs and a stagnant job market. Meanwhile, food and beverage company PepsiCo said that cutting prices helped lure customers back to buying snacks like Doritos or Lay’s potato chips. Nvidia and the AI trade have been big drivers of the recent rally. The artificial-intelligence-chip giant rose 4% on Monday, with its stock price and market cap both hitting new records. Nvidia’s market value closed the day at $5.2 trillion, more than $1 trillion ahead of the next largest company, Alphabet, whose shares rose 1.7%.

Asia
Asian indexes diverged for the Tuesday trading session. While the Kospi in Seoul hits a new record high, the Nikkei 225 index in Tokyo is trading in negative territory. The Nikkei is down about 1 percent. The broader Topix index is up 0.9 percent. The Kospi is currently up 0.9 percent. In Shanghai and Hong Kong, the indices are edging lower. In the Japanese technology sector, SoftBank Group is down 9.5 percent, and NEC is down 3.1 percent. Shares of automaker Nissan Motor increased by 3 percent after the company raised its earnings forecast. In Seoul, LG Electronics jumped nearly 9 percent. Following the release of surprisingly strong first-quarter results, Samsung SDI soared 6.1 percent. Shares of steelmaker Posco surged by roughly 12 percent.

Bonds
On the U.S. bond market, the 10-year Treasury note yield increased by 3 basis points to 4.34% on Monday. Persistently higher oil prices are fueling inflation concerns and reducing the likelihood of interest rate cuts.

Analysis
Kühne+Nagel price target: Morgan Stanley raises to CHF 179 (170) – Equal Weight
ABB rating: Kepler Cheuvreux lowers to Hold (Buy) – Target CHF 80 (75)
Galderma price target: Morgan Stanley upgrades to CHF 160 (155) – Equal Weight

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