Volkswagen said it had agreed to a deal with its union to reduce its workforce by more than 35,000 and cut billions of dollars a year in costs, while averting immediate factory closures in Germany. Under the agreement announced Friday, VW said it would gradually reduce staffing levels “in a socially responsible way,” through early retirement and other measures. Workers will also forgo pay increases and lose certain bonuses. In exchange, the company agreed to not make any forced job cuts until 2030 and to keep all its German factories open. The cost-cutting plan comes as VW and other European carmakers contend with a tough economic environment, high domestic costs, abrupt shifts in demand for electric vehicles and increasing competition from lower-cost Chinese EV makers. “The agreement is an important signal for the future viability of the Volkswagen brand,” Chief Executive Officer Oliver Blume said in a statement, adding that the company had set a “decisive course for its future in terms of costs, capacities and structures.” Friday’s deal concludes almost three months of negotiations between VW’s management and the company’s powerful union and works council. Friction between the two sides had led to some 100,000 workers temporarily walking off the job in recent weeks, with the union threatening wider strike action in the new year if an agreement wasn’t reached.

Swiss stocks found some support in late afternoon trades on Friday, but still ended the day's session on a weak note. The mood remained cautious amid concerns about the outlook for global economy in the wake of tariff threats by the U.S., fears of a U.S. government shutdown, and recent hawkish comments from the Fed that interest rate cuts will be fewer next year than earlier forecast. The benchmark SMI, which dropped to a low of 11,248.40 around mid afternoon, ended the day's session with a loss of 29.92 points or 0.26% at 11,394.92. Sika ended down nearly 2.5%. Holcim and Zurich Insurance Group both closed lower by about 1%. UBS Group, Swisscom, Partners Group, Geberit, Swiss Re, Novartis and Nestle closed down 0.3 to 0.7%. Shares of pharma company Idorsia tanked more than 50% after the firm announced delays to a rights deal related to its hypertension drug Tryvio. Adecco climbed about 1.7% and SIG Group gained 1.33%. Sonova, Swatch Group and VAT Group closed higher by 0.7 to 1%. Lonza Group gained 0.53%. Data from Swiss National Bank showed Switzerland's current account surplus narrowed to CHF 6.3 billion in the third quarter of 2024 from a revised CHF 16 billion in the corresponding period of the previous year.

Europe
European stocks closed lower on Friday, extending losses from the previous session, as concerns about political uncertainty in some major European countries, fears of a U.S. government shutdown, and potential tariffs on the European Union weighed on sentiment. In economic releases, the declining trend in German producer prices unexpectedly ceased in November, data from Destatis showed today. Producer prices rose 0.1% year-on-year in November, reversing a 1.1% fall in the prior month. Data out of U.K. showed British retail sales rose by a weaker-than-expected 0.2% in November as consumers hold back spending in the final months of the year. The pan European Stoxx 600 fell 0.88%. The U.K.'s FTSE 100 closed down 0.26%, Germany's DAX and France's CAC 40 closed lower by 0.43% and 0.27%, respectively. Switzerland's SMI ended lower by 0.26%. Among other markets in Europe, Denmark's OMXC20 tanked more than 13%. Greece, Iceland, Ireland, Netherlands, Norway, Poland, Portugal, Sweden and Turkiye closed weak. Belgium and Spain posted modest gains, while the Russian market rose sharply. Austria and Finland ended flat. Bank stocks were among the notable losers. Shares of automakers also traded mostly weak. In the UK market, Severn Trent, JD Sports Fashion, Hiscox, United Utilities, ICG, Standard Chartered, Natwest Group and BT Group were the notable losers. Synairgen shares plummeted nearly 47%. The biopharmaceutical company has announced plans to raise up to £25 million to fund the phase 2 trials of its antiviral treatment. Frasers Group climbed 2.8%. B&M European Value Retail, Rentokil Initial, Vistry Group, Segro, Endeavour Mining Plc, Antofagasta, IAG, Unite Group, Land Securities, Fresnillo and British Land gained 1 to 2.2%.

United States
After ending the previous session little changed, stocks moved sharply higher over the course of the trading day on Friday. The major averages recovered from initial weakness and climbed firmly into positive territory as the day progressed. The Dow surged 498.02 points or 1.2 percent to 42,840.26, adding to the slim gain posted in Thursday's session, when the blue chip index snapped a ten-day losing streak. The tech-heavy Nasdaq also jumped 199.83 points or 1.0 percent to 19,572.60 and the S&P 500 shot up 63.77 points or 1.1 percent to 5,930.85. Despite the strong upward move on the day, the major averages posted notable losses for the week. The Dow plunged by 2.3 percent, the S&P 500 tumbled by 2.0 percent and the Nasdaq slumped by 1.8 percent. The rally that emerged on Wall Street came as traders reacted to the release of the Federal Reserve's preferred readings on consumer price inflation. The Commerce Department said its personal consumption expenditures (PCE) price index inched up by 0.1 percent in November after rising by 0.2 percent in October. Economists had expected prices to increase by another 0.2 percent. Eli Lilly said the Food and Drug Administration approved Zepbound for moderate-to-severe obstructive sleep apnea in adults with obesity. The company said Zepbound, or tirzepatide, is the first and only prescription medicine for adults suffering from this condition. The drug was launched in the U.S. for the treatment of adults with obesity or who are overweight with weight-related comorbidities in November 2023. FedEx has decided to spin off its freight trucking division, moving to streamline its structure and unlock value that some shareholders argue has been lost inside the delivery giant. FedEx Freight is the largest less-than-truckload operator in the country, with more than 30,000 vehicles and 350 facilities in North America that move cargo for retailers, manufacturers and other shippers.

Asia
At the start of the new week, stock markets in East Asia and Australia are on the rise. In Tokyo, the Nikkei 225 index rose by 1.2 per cent to 39,180 points. The Japanese stock market is focussing on a possible merger between Honda and Nissan. According to the broadcaster NHK, official negotiations on a merger could begin as early as Monday.

Bonds
In the U. S. bond market, treasuries regained ground after moving sharply lower over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell 4.6 basis points to 4.524 percent.

Analysis
JPM raises Fraport to Overw. (Neutral)/Target EUR 66 (59) – Trader
Barclays lowers the Uniper target to 35 (37) EUR/Underw. – Trader
DZ lowers the Hornbach target to EUR 92 (95) – Buy

Produced by MBI Martin Brückner Infosource GmbH & Co. KG on behalf of Swissquote. All news is acquired with journalistic accuracy. No liability is assumed for delays or errors.