Tesla reported surprisingly strong earnings in the third quarter, helping the electric-car maker to regain momentum after a tumultuous start to the year in which its profit fell for two straight quarters. Net income was $2.2 billion for the July-to-September period, a 17% increase from a year earlier and lifted in large part by higher sales of regulatory credits to other automakers and the strength of Tesla’s energy business. Global deliveries also rose in the third quarter, helping to boost revenue by 8% to $25.2 billion. Tesla’s stock was up 12% in after-hours trading Wednesday, following the earnings release and call. Musk confirmed Wednesday Tesla has abandoned plans for a long-awaited $25,000 electric car. The company will instead release lower-cost versions of its existing models that will be priced below $30,000 after subsidies, he added. Those cars will arrive in the first half of 2025. After that, its next car will be the dedicated robotaxi, with no steering wheel or pedals. Musk has urged investors to view Tesla as an AI and robotics company, arguing these technologies could boost its market value to more than $30 trillion. However, those bets are still a few years away from becoming a reality. Musk told analysts he expects Cybercab to be in volume production in 2026.

Although only 4 of the 20 SMI shares recorded price gains, the leading index on the Swiss stock exchange closed almost unchanged on Wednesday. This was largely due to heavyweight Roche, the clear winner of the day with a gain of 1.8 per cent. Swisscom (+0.4%), Lonza (+0.1%) and Alcon (+0.1%) also rose slightly, but Novartis, another heavyweight, was only down a very small 0.1 per cent. The SMI fell by 0.1 per cent to 12,147 points. Swiss Life was the only stock to remain unchanged. A total of 13.23 million shares were traded (Tuesday: 15.27 million). Roche presented quarterly figures that were well received. The pharmaceutical giant reaffirmed its outlook and intends to increase its dividend once again. Sales climbed by 2 per cent to 45 billion Swiss francs; adjusted for currency effects, the increase was even 6 per cent. For the year as a whole, the Group continues to expect sales growth in the mid-single-digit range. Kuehne + Nagel ranked at the bottom of the SMI - also after the quarterly report. The logistics group increased its profit more than expected, driven by efficiency measures and higher volumes. Nevertheless, analysts spoke of mixed figures with some key figures below expectations. The share price fell by 1.6 per cent. The previous day's clear loser Logitech failed to recover, with the share price tumbling by a further 1.5 per cent. Among the small caps, the share price of U-Blox slumped by 13 per cent after the manufacturer of semiconductor components reported a 25 per cent year-on-year drop in sales.

Europe
The European stock markets ended the day lower on Wednesday, amid a deluge of mixed quarterly results and uncertainty over interest rates. The Stoxx Europe 600 index closed down 0.4% at 518.84 points. In Paris, the CAC 40 and the SBF 120 each lost 0.5%, to 7,497.48 and 5,683.30 points respectively. In Frankfurt, the DAX 40 fell by 0.2% to 19,377.62 points, and in London, the FTSE 100 shed 0.6%. The world's number one cosmetics company L'Oréal (-2.5%) reported lower-than-expected sales for the third quarter of 2024, marked by continuing sluggish demand in China and a slowdown in sales in its dermo-cosmetics division. Thales (-1.3%) confirmed its targets for 2024, after reporting sales growth in the first nine months of the year, driven in particular by defence and security activities. ID Logistics (-6%) published a rise in third-quarter sales and said it was expecting "record" growth for 2024 as a whole. The market was also affected by the sales figures and outlook released by Vivendi (-1.8%), Ipsen (+0.2%), Klépierre (+0.2%) and Air Liquide (-1%). British advertising group WPP (+5.6% in London) confirmed its return to growth in the third quarter. Deutsche Bank (-1.3% in Frankfurt) revealed on Wednesday being on track to meet its targets for the year, after a larger-than-expected rise in third-quarter profits. Nevertheless, the weaker-than-expected performance of Deutsche Bank's private banking and investment banking activities shows that the economic situation in Germany is beginning to weigh on the banking group's revenues, observes JP Morgan.

United States
The stock market opened in the red and extended declines on Wednesday after another mixed round of earnings reports Wednesday, dragging all three major indexes to their steepest declines in weeks. The slide spanned soda makers, a coffee giant and an aircraft manufacturer, with losses by chip stocks adding momentum to the broader market’s turn lower in the afternoon. The tech-heavy Nasdaq Composite led the retreat with a 1.6% pullback. The Dow Jones Industrial Average fell 1%, or 410 points, while the S&P 500 slipped 0.9%. Investors have tapped the brakes on stocks’ record run, jeopardising what could be their seventh straight week of gains, while they unpack a barrage of earnings reports offering snapshots of the health of U.S. consumers. Even though the American economy remains robust, the companies reporting so far have shared outlooks that many investors view as good, but not great. Boeing reported a $6.2 billion quarterly loss, its biggest since the pandemic upended global air travel. Chief Executive Kelly Ortberg said that the jet maker needs a culture change, plus a deal with striking machinists, and will burn through cash in the next three quarters. Shares declined 1.8% Wednesday and have plunged 40% this year. Coca-Cola slipped 2.1% Wednesday after posting soft sales that some analysts have attributed to price hikes. Starbucks shares ticked 0.9% higher after the coffee chain suspended guidance for next fiscal year and a new chief executive called for a strategic overhaul. Meanwhile, AT&T shares rose 4.6% thanks to better-than-expected earnings and despite booking a $4.4 billion impairment related to its business-wireline unit. Market-moving reports have continued after the bell with earnings by Tesla and IBM. Investors are awaiting a jammed slate next week, when Alphabet, Microsoft, Meta and Amazon.com report. Elsewhere in the stock market, McDonald’s was the Dow’s worst-performer after federal officials said they were investigating Quarter Pounders as the potential source of an E. coli outbreak across 10 states. Shares fell 5.1%, their largest single-day drop since the outset of the pandemic.

Asia
Asian stocks were mixed on Thursday. In Tokyo, the Nikkei 225 index rose by 0.1 per cent to 38,130 points. Shares in Softbank Group fell by 2 per cent, weighed down by the 6.7 per cent drop in the share price of its subsidiary Arm Holdings the previous day. Arm came under pressure after the company cancelled its licensing agreement with Qualcomm. On the Shanghai stock exchange, the Composite Index declined by 0.5 per cent. In Hong Kong, the Hang Seng Index slipped by 1 per cent. In Seoul, the Kospi recovered from its initial sharp drop and is currently trading 0.2 per cent lower. SK Hynix impressed with its third-quarter figures and outlook. The shares advanced 1.9 per cent. Meanwhile, index heavyweight and chip giant Samsung Electronics slid 2.5 per cent. Hyundai Motor dropped 2.5 per cent. The car manufacturer will present figures later in the day.

Bonds
Long-dated U.S. government debt yields extended their climb into three-month highs on Wednesday, as investors remained wary that the approaching U.S. election could exacerbate the government’s fiscal deficit. The 10-year Treasury note yield rose by 3 basis points to 4.236%, reaching its highest level since July. The 2-year Treasury note yield climbed 4 basis points to 4.08%.

Analysis
Berenberg starts Comet Holding with Buy and target CHF 400
Price target Logitech: Goldman Sachs lowers to CHF 96 (105) - Buy
Target price Swiss Re: Barclays raises to CHF 112 (110) - Equalweight

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