Tesla (+3.2%) is apparently reducing production in China. The car manufacturer is cutting back production of its Model Y in the country, as reported by the business newspaper Nikkei. The market, where growth is currently decelerating, is highly competitive. The slowdown in production is likely to affect analysts' estimates for deliveries in the second quarter. By April, China-based car manufacturers had sold around 1.6 million battery electric vehicles, an increase of 9 per cent compared to the same period last year. Tesla delivered around 283,000 cars from its factory in Shanghai, a decrease of 7 per cent. Its market share fell by around 3 percentage points to around 17 per cent of all battery-electric cars. Proxy-advisory firm Glass Lewis has advised Tesla shareholders to vote against Elon Musk’s multibillion-dollar pay package at the company’s meeting next month.

On Friday, the Swiss stock market closed slightly down once again. Participants spoke of restraint ahead of the long weekend in the USA and the UK, where there is no trading on Monday due to public holidays. The SMI fell by 0.3 per cent to 11,932 points, but closed near its high for the day. Of the 20 SMI stocks, there were 10 losers and 10 gainers. A total of 17.87 (previously: 20.04) million shares were traded. The UK Competition and Markets Authority (CMA) has launched an investigation into the acquisition of point-of-care diagnostics platforms from LumiraDx by the pharmaceutical group Roche. The authority announced that it is examining whether the transaction could affect competition and has until 19 July to make a decision in the first phase. Roche shares lost 0.7 per cent. Sentiment was also weighed down by declines among the other two index heavyweights Novartis and Nestle, both down 1.1 and 0.9 per cent respectively.

Europe
The European stock markets fell on Friday and for the week as a whole. The Stoxx Europe 600 index shed 0.2% to 520.6 points. In Paris, the CAC 40 and the SBF 120 each lost 0.1%. The DAX 40 in Frankfurt was flat and the FTSE 100 in London declined by 0.3%. The Stoxx Europe 600 posted a weekly downturn of 0.6%. VusionGroup, formerly SES-imagotag, tumbled by 10%. The hedge fund ShadowFall, which specialises in short selling, accused the electronic label supplier on social network X of artificially inflating its revenues, a year after a similar attack by Gotham City Research. Renault gained 5.2% to €50.3. UBS raised its recommendation on the stock from ‘sell’ to ‘neutral’ and its target price from €31 to €50. TotalEnergies (+0.4%) has no plans to leave France, according to its Chairman and CEO Patrick Pouyanné at the Annual General Meeting. Call centre operator Teleperformance (+2.4%) had announced on Thursday evening that it had withdrawn 3 million treasury shares, representing 4.7% of its capital. Rail equipment manufacturer Alstom (+2.6%) also confirmed on Thursday evening that it had completed a €750 million hybrid debt issue as part of its €2 billion debt reduction plan.

United States
Technology stocks helped push the S&P 500 higher Friday, capping off a rocky week in markets. The broad U.S. stock index and the tech-heavy Nasdaq Composite rose for a fifth straight week. The Dow Jones Industrial Average snapped a weekly winning streak that had lasted since mid-April. In daily trading Friday, the S&P 500 gained 0.7%, while the Nasdaq climbed 1.1% to a new record. The Dow added less than 0.1%, or about 4 points. The S&P 500 is up 11% in 2024 after climbing 5.3% so far in May. The broad U.S. stock index ended the week up less than 0.1%, while the tech-heavy Nasdaq Composite rose 1.4%. Several Dow components had tough weeks. Boeing shares ended the week down 5.6% after the jet maker said it would burn billions of dollars more than anticipated in coming months. Salesforce shares declined 4.7%, weighed down Friday by concern about the outlook for enterprise software. Home Depot, 3M and McDonald’s each fell more than 5%. Looking forward, many investors are feeling upbeat. After a string of inflation reports came in hotter than expected, the report on April consumer prices helped calm investors’ nerves. The economy has remained robust, defying expectations that the Fed’s campaign against inflation would tip the U.S. into a recession. And the outlook for corporate profits appears bright. Analysts expect that earnings from companies in the S&P 500 will rise 11% this year and 14% in 2025, according to FactSet. Earnings reports drove big moves in individual stocks Friday. Shares of Intuit fell 8.3% after executives said the number of people using its TurboTax product for free declined. Deckers Outdoor shares jumped 14% after the maker of Ugg boots and Hoka shoes beat Wall Street’s forecasts for sales and profit. Shares of Ross Stores rose 7.8% after the discount retailer reported stronger-than-anticipated earnings and sales. Chip giant Nvidia rose 2.6%, building on a record set Thursday after a strong earnings report. U.S. markets are closed Monday for the Memorial Day holiday.

Asia
In Asia, major indexes broadly closed with gains on Monday. The Shanghai Composite rose by 0.4 per cent and the Hang Seng Index gained 0.3 per cent. The Nikkei-225 climbed by 0.2 per cent. In Seoul, the Kospi advanced by 0.5 per cent. Here, technology stocks were particularly buoyed by Friday's positive Wall Street data. Shares in SK Hynix jumped 4.0 per cent, while Hana Financial shares added 1.3 per cent.

Bonds
Yields on U.S. government debt closed little changed in Friday’s shortened trading session after durable-goods orders jumped for a third straight month. The 10-year Treasury note yield ended slightly down by 1 basis point at 4.467%, having increased the previous day. The 2-year Treasury note yield climbed 2 basis points to 4.948%. U.S. markets are closed Monday for the Memorial Day holiday.

Analysis
Jefferies raises Sandoz target to CHF 38.60 (29.40) - Buy
UBS upgrades Renault to Neutral (Sell) - target EUR 50 (31)
Price target Swiss Re: Vontobel lifts target to CHF 135 (131) - Buy
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