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Samsung Electronics Under Pressure Despite Record Profits

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Samsung Electronics reported its fourth consecutive quarter of record earnings as its core semiconductor business continued to ride the AI-driven demand wave, though the results fell short of lofty expectations amid growing calls for higher shareholder returns. The South Korean company’s quarterly operating profit topped 100 trillion won, equivalent to $74.52 billion, making it the first major global technology company to cross that threshold. It also reiterated that tight memory supply is expected to continue for the next few years, keeping chip prices elevated. “The tight supply-demand balance is expected to persist through 2028,” Jaejune Kim, executive vice president of Samsung’s memory business, said during Thursday’s conference call. The stock still fell 5 percent, disappointing analysts' expectations.

Swiss stocks

The Swiss stock market, which opened on a weak note on Wednesday, languished in negative territory except for a few minutes a little past mid-afternoon, as investors largely made cautious moves, reacting to earnings and other corporate news. The benchmark SMI, which fell to 14,489.92 around noon, climbed to 14,621.00 before settling at 14,581.10, down 16.53 points or 0.11%. Logitech International tanked nearly 11% after the company warned that semiconductor supply constraints would affect third-quarter sales, despite reporting second-quarter earnings and revenue above analyst’s expectations. Sandoz Group ended down 2.7%. Geberit, Straumann Holding, Lonza Group, Swiss Re, Julius Baer, Schindler Ps, Givaudan and UBS Group lost 0.6%-1.1%. Nestle, Kuehne + Nagel and Amrize also closed weak. ABB moved up nearly 2%. Partners Group, Lindt & Spruengli and Swiss Life Holding ended higher by 1.4%, 1.15% and 1.06%, respectively. VAT Group, SGS, Sonova, Sika, Zurich Insurance and Novartis posted modest gains.

International markets

Europe
European stocks turned in a mixed performance on Wednesday as investors reacted to a slew of corporate earnings announcements and looked ahead to the monetary policy announcement from the Federal Reserve later in the day. The European Central Bank is scheduled to announce its monetary policy on Thursday. The pan European Stoxx 600 ended down by 0.23%. The U.K.'s FTSE 100 drifted lower by 0.3%, Germany's DAX edged down 0.08% and France's CAC 40 crept up 0.07%. Among other markets in Europe, Czech Republic, Denmark, Greece, Ireland and Sweden ended on firm note. Austria, Belgium, Iceland, Norway, Poland, Russia and Türkiye closed marginally up. Finland, Netherlands and Spain ended weak, while Portugal closed flat. In the UK market, Whitbread climbed more than 5%. Centrica moved up 3.5%. Standard Chartered ended up 2.7%. The lender reported higher quarterly earnings. In the third quarter, profit before taxation increased 27% to $2.25 billion from $1.77 billion last year. Profit attributable to ordinary shareholders rose 46% to $1.50 billion from prior year's $1.03 billion, while earnings per share climbed 55% to 67.0 cents from 43.2 cents a year ago. Natwest Group, Lloyds Banking Group, Barclays, Halma, Intercontinental Hotels Group, Babcock International, BP, National Grid, Rolls-Royce Holdings, Metlen Energy & Metals, Spirax, Diploma and Convatec Group also closed notably higher. GSK ended lower by more than 5% despite beating third-quarter sales and profit expectations. The company reported third-quarter profit before tax of 1.935 billion pounds, compared with 2.456 billion pounds in the prior year. Earnings per share declined to 38.5 pence from 49.9 pence, a year ago. GSK reaffirmed its full-year 2026 guidance at constant exchange rates. Barratt Redrow dropped nearly 7%. Informa ended down 3%. Kingfisher, J Sainsbury, Airtel Africa, Unilever, Marks & Spencer, Relx, Pearson, Fresnillo, Burberry Group, Bunzl, IG Group Holdings, Associated British Foods and IAG also ended notably lower.

United States
U.S. stocks rose slightly and Treasury yields were mixed after the Federal Reserve held rates steady despite elevated inflation and left the door ajar to a rate hike in December. The Dow Jones Industrial Average rose 97.53 points, or 0.19%, to 52475.10. The broad based S&P 500 index gained 21.38 points, or 0.28%, to 7743.98, and the tech-heavy Nasdaq Composite added 72.04 points, or 0.27%, to 26549.85. The Fed held rates at a range between 3.75% and 4.00%. The vote by the rate-setting committee was 10-2, with governor Lisa Cook and Cleveland Fed President Beth Hammack dissenting in favor of a quarter-point increase. Oracle, which has borrowed aggressively to fund data-center development, saw its shares gain 11% to $144.54 after it forecast brisk revenue growth and said its capital-expenditure binge will soon peak. Shares of the loud computing firm CoreWeave rose 7.3% to $63.93. The volatility in AI credit and equity securities following the September rate hike was a reminder that the new technology is not immune to interest rates, Warsh said. GE Vernova agreed to acquire a high-voltage grid equipment manufacturer Trench Group for $9 billion, as the maker of energy equipment seeks to capitalize on rising large-load electricity demand created by the AI boom. Nelson Peltz's hedge fund Trian offered to buy fast-food chain Wendy's for around $1.4 billion.

Asia
Stock markets in East Asia and Australia are showing no clear trend on Thursday. On the technology-heavy Seoul Stock Exchange, the Kospi is down 0.6 per cent.

Bonds
The yield on the policy-sensitive two-year U.S. Treasury declined 0.004 percentage point to 4.731%. The yield on the 10-year Treasury note rose 0.052 percentage point to 5.044%, its biggest gain since Sept. 28. The yield on the 30-year bond rose 0.056 percentage point to 5.360%.

Analysis
Bank of America lowers its Ferrari target to 395 (400) EUR – Buy
Bank of America raises its Orange target to 19.40 (19.20) EUR– Buy
Bank of America lowers its Reckitt Benckiser target to 6,000 (6,100) GBp – Buy

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