Airbus said it won’t be meeting its annual targets for the year, including the number of commercial aircraft it planned to deliver, after its space-systems management team identified further commercial and technical challenges. The European plane maker on Monday said that it will also book charges of about €900 million ($962.5 million) in the first half of 2024 following an extensive review of its space-systems programs. Airbus expects to end the year delivering 770 commercial aircraft, down from a prior outlook of 800 commercial aircraft deliveries a couple of months ago. The company said its A320 ramp-up trajectory has been adjusted to reflect specific supply-chain challenges in a degraded operating environment, and that its target production rate of 75 A320 Family aircraft a month is now set to be reached a year later, in 2027. Airbus also forecasts adjusted earnings before interest and taxes of about €5.5 billion, below the €6.5 billion to €7 billion expected previously.

After opening on a slightly sluggish note, the Switzerland market gained in strength on Monday thanks to sustained buying at several counters amid optimism about interest rate cuts by major central banks. The benchmark SMI, which climbed to 12,180.57, ended with a strong gain of 144.42 points or 1.2% at 12,157.29. Swatch Group climbed 2.56%. Novartis and Lonza Group ended higher by 2.15% and 2.07%, respectively. Geberit, SIG Group and Alcon gained 1.7 to 1.85%. Partners Group, Julius Baer, Swisscom, UBS Group, Roche Holding, Kuehne & Nagel, Richemont, Nestle and Logitech International gained 1 to 1.5%. Belimo Holding, Barry Callebaut, PSP Swiss Property, Swiss Prime Site, Adecco, Tecan Group, Galenica Sante and Ems Chemie Holding posted sharp to moderate gains. Sandoz Group shares dropped nearly 2%. SGS ended down by 1.1%, while Straumann Holding edged down marginally. Data from Swiss National Bank showed that Switzerland's current account surplus widened to CHF 16.1 billion in the first quarter of 2024 from CHF 10.8 billion in the corresponding period of the previous year.

Europe
European stocks closed on a firm note on Monday as bond yields dropped and investors digested some corporate news, while looking ahead to fresh economic data, the U.S. Presidential debate, and France's snap parliamentary polls. Expectations of interest rate cuts by central banks helped underpin sentiment. The pan European Stoxx 600 climbed 0.73%. The U.K.'s FTSE 100 gained 0.53%, Germany's DAX and France's CAC 40 ended higher by 0.89% and 1.03%, respectively. Switzerland's SMI rallied 1.2%. Among other markets in Europe, Austria, Belgium, Denmark, Finland, Norway, Poland, Portugal, Spain and Sweden ended with sharp to moderate gains. Iceland and Netherlands edged up marginally. Russia closed notably lower, while Turkiye ended slightly down. In the UK market, Prudential climbed 7.3% after the insurer launched a $2 billion share buyback program. Frasers Group climbed about 4% after it announced that it is on track to meet its guidance and struck a partnership with the THG tech platform. Burberry Group, Antofagasta, JD Sports Fashion, BT Group, WPP and Associated British Foods gained 2 to 4%. IMI, British American Tobacco, Ashtead Group, Phoenix Group Holdings, Convatec Group, St. James's Place, Halma, Next and Segro also ended with strong gains. Berkeley Group Holdings ended down by about 2.1%. National Grid, Smurfit Kappa Group, Auto Trader Group, Smith & Nephew, Sainsbury (J), B&M European Value Retail, 3i Group and Marks & Spencer also ended notably lower. In the German market, automakers rallied after China and the European Union have agreed to start talks on the bloc's plans to impose tariffs on electric vehicles imported from the Asian nation. Covestro rallied 5%. Siemens Energy gained about 4%. Fresenius Medical Care, BMW, Deutsche Bank, Sartorius, Bayer, BASF and Brenntag gained 2 to 3%. Daimler Truck Holding, Siemens, Porsche, HeidelbergCement, Henkel and Symrise also moved up sharply.

United States
The S&P 500 edged lower, with Nvidia shares extending their recent pullback. Coming off its third straight week of gains, the broad market index fell 0.3%. The Nasdaq Composite dropped 1.1%, while the Dow Jones Industrial Average, which doesn’t include Nvidia, added 0.7%. Nvidia was a major outlier on an otherwise decent day for stocks. A rally early last week briefly made the artificial-intelligence chip maker the world’s most-valuable listed company. But its shares have slumped since then, losing 13% over the past three trading days, including 6.7% on Monday. Investor enthusiasm about AI found other outlets, with Apple rising 0.3% and Meta Platforms gaining 0.8% after The Wall Street Journal reported that the two had held talks about integrating Meta’s generative AI model into Apple’s AI system for iPhones. Stocks rose broadly outside of the tech sector as well, with nine of the 11 sectors in the S&P 500 finishing with gains. A 1.1% rise in U.S. crude prices to $81.63 a barrel helped lift energy companies, with Devon Energy climbing 4% and Occidental Petroleum advancing 3.8%. The week’s most anticipated report will come Friday, when the Commerce Department will release data on personal income and spending as well as the Fed’s favored inflation gauge, the personal-consumption expenditures price index. Investors anticipate that core PCE prices, excluding the volatile food and energy categories, rose 2.6% in May from a year earlier. That would be down from the 2.8% increase in April.

Asia
The stock markets in East Asia and Australia made up for the false start to the week on Tuesday and trended favourably. Sydney is the biggest winner with a gain of 1.1 per cent, while Seoul and Hong Kong are up by half a per cent. The Nikkei index in Tokyo, which managed to escape the downward trend the previous day, rose by 0.6 per cent to 39,039 points. Support comes from the yen, which remains at a 34-year low against the dollar.

Bonds
U.S. bond prices were little changed Monday. The yield on the benchmark 10-year U.S. Treasury note settled at 4.248%, down from 4.256% Friday.

Analysis
UBS raises Anheuser-Busch InBevs to Buy (Neutral) – Target EUR 72 (63.50)
Deutsche Bank raises ASML target to EUR 1,100 (1,000) – Buy
Bank of America raises Prudential target to 1,050 (1,000) p – Buy


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