Advanced Micro Devices agreed to pay nearly $5 billion to buy ZT Systems. It’s an attempt by the chip company to broaden its artificial-intelligence infrastructure offering in competition with the AI semiconductor leader Nvidia. AMD said Monday that the cash-and-stock deal values privately held ZT Systems at $4.9 billion, including a contingent payment of up to $400 million based on certain milestones after the transaction is completed. The deal is expected to close in the first half of next year, subject to regulatory approvals. New Jersey-based ZT Systems designs and makes servers, server racks, and other infrastructure for data centers. Those data centers are increasingly housing AI chips from the likes of AMD and Nvidia. ZT has more than $10 billion of annual sales, AMD Chief Executive Lisa Su said in an interview with The Wall Street Journal. AMD reported revenue of $22.7 billion for its fiscal 2023 year. However, AMD plans to sell ZT’s manufacturing business after the acquisition is complete, keeping its system-design business. “Our acquisition of ZT Systems is the next major step in our long-term AI strategy to deliver leadership training and inferencing solutions that can be rapidly deployed at scale across cloud and enterprise customers,” said Su in a statement.

After opening slightly down Monday morning, the Swiss market recovered and kept edging higher as the day progressed and eventually ended on a firm note with several stocks posting solid gains in the final hour. Last week's data showing a sharp surge in Swiss industrial output, and rising optimism about an interest rate cut by the Federal Reserve in September helped underpin sentiment. The benchmark SMI ended with a gain of 86.51 points or 0.71% at 12,275.24. The index, which edged down to 12,167.45 in early trades, climbed to a high of 12,296.22. Richemont climbed about 2.2%. Partners Group and Holcim both ended nearly 2% up. Holcim moved up as Deutsche Bank upgraded the stock's rating to 'buy' from 'hold', and increased its price target to 91 francs from 81 francs. Straumann Holding ended 1.76% up, while Geberit, Sandoz Group, SIG Group, Vat Group and ABB gained 1.1 to 1.5%. SGS, Alcon, Sika, Novartis, Lonza Group, Swiss Life Holding, Swiss Re and Schindler Ps ended moderately higher. UBS Group, Julius Baer and Lindt & Spruengli ended weak.

Europe
European stocks closed higher on Monday, extending recent gains, amid hopes the Federal Reserve will start reducing interest rates from September, and on some monetary easing by central banks in Europe as well. Investors looked ahead to the release of the minutes of the Federal Reserve's most recent policy meeting, and Fed Chair Jerome Powell's speech at the upcoming Jackson Hole Symposium this week. The pan European Stoxx 600 climbed 0.61%. The U.K.'s FTSE 100 gained 0.55%, Germany's DAX ended 0.54% up, and France's CAC 40 closed up 0.7%, while Switzerland's SMI settled with a gain of 0.71%. Among other markets in Europe, Austria, Belgium, Finland, Iceland, Netherlands, Norway, Poland, Portugal, Spain, Sweden and Turkiye closed higher. In the UK market, Barratt Developments rallied about 3.5%. The stock surged higher following the company clearing a regulatory hurdle in its acquisition of Redrow. Glencore, Endeavour Mining, Fresnillo, Burberry Group, Anglo American Plc, 3i Group, RightMove, Next, Rio Tinto, Frasers Group, Ashtead Group, Centrica, JD Sports Fashion, Persimmon and Vistry Group gained 1.5 to 3%. Hikma Pharmaceuticals ended 1.55% down. Spirax Group, Admiral Group, BAE Systems, Rentokil Initial, EasyJet and Pershing Square Holdings lost 0.6 to 1%. In the German market, Zalando climbed about 3%. Porsche, Puma, Brenntag, Mercedes-Benz, Merck, Continental, Deutsche Post, BASF, BMW, RWE, Volkswagen, Sartorius and Vonovia gained 1 to 1.8%. Rheinmetall dropped about 1.85%. Covestro, Henkel and Symrise ended modestly lower.

United States
Stocks moved mostly higher over the course of the trading session on Monday, adding to the strong gains posted last week. The major averages showed a lack of direction early in the session but climbed firmly into positive territory as the day progressed. The major averages surged going into the final hour of trading, with the Nasdaq and the S&P 500 closing just shy of their highs of the session. The Nasdaq shot up 245.05 points or 1.3 percent to 17,876.77, the S&P 500 jumped 54.00 points or 1.0 percent to 5,608.26 and the Dow climbed 236.77 points or 0.6 percent to 40,896.53. The strength that emerged on Wall Street came as stocks continued to benefit from recent upward momentum, with the major averages extending the upward trend seen over the past several sessions. The Nasdaq and the S&P 500 closed higher for the eight consecutive session and have more than offset the steep drop seen early this month Later this week, the minutes of the Federal Reserve's latest monetary policy meeting may shed additional light on the outlook for interest rates along with remarks by Fed Chair Jerome Powell and other Fed officials at the Jackson Hole Economic Symposium. Biotechnology stocks moved sharply higher over the course of the session, with the NYSE Arca Biotechnology Index surging by 2.2 percent to its best closing level in almost three years. Significant strength was also visible among gold stocks, as reflected by the 2.1 percent jump by the NYSE Arca Gold Index. The index reached a two-year closing high amid a modest increase by the price of the precious metal. Semiconductor stocks also turned in a strong performance on the day, driving the Philadelphia Semiconductor Index up by 1.9 percent.

Asia
The opposite picture from the start of the week is seen on the stock markets in East Asia and Australia on Tuesday. This time, the trend on the Chinese stock exchanges in Shanghai (-1.0%) and Hong Kong (-0.4%) is lighter, while elsewhere the indices are moving upwards. On Wall Street, the indices rose significantly on Monday.

Bonds
In the U.S. bond market, treasuries moved higher amid optimism about the outlook for interest rates. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.5 basis points to 3.867 percent.

Analysis
UBS lowers Tecan to CHF 380 (412) – Buy
UBS lowers Carlsberg to DKK 850 (1,010) – Neutral
Citi lowers K+S to EUR 12 (14.20) – Neutral

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