UBS Group reported a fourth-quarter net profit that came ahead of analysts’ expectations, and said it aims to buy back shares valued at up to $3 billion this year. The Zurich-based bank said Tuesday that net profit for the quarter was $770 million compared with a loss of $279 million in the year-earlier period, when its results were hit by costs related to the integration of Credit Suisse. Analysts had expected a net profit of $483 million, according to consensus estimates compiled by the bank. UBS said it plans to repurchase $1 billion of its own stock in the first half and aims to buy back up to an additional $2 billion in the second half. It also hiked its dividend by 29% to $0.90 a share. The bank’s plans to boost returns to shareholders come despite the prospect of tougher rules in its home country that are expected to increase its capital demands. Analysts have said the new requirements could cause UBS to alter its plans to return money to shareholders. Revenue for the quarter came in at $11.635 billion, up from $10.855 billion a year before. Analysts had expected $11.51 billion, according to the same consensus.

The Swiss market closed weak on Monday although the downside was much less pronounced than the losses posted by most of the major markets in the European region. The Swiss benchmark SMI closed down 50.32 points or 0.4% at 12,546.77, well off the day's low of 12,409.82. Julius Baer plunged 12.7% as the bank announced plans to cut its workforce by about 5% as part of savings measures under new chief executive Stefan Bollinger. Sandoz closed lower by 2.8%. The generic pharmaceutical company has appointed Peter Stenico as the new President Region International and member of the Sandoz Executive Committee. Logitech International ended down 3.1%. Sika, Straumann Holding and Kuehne + Nagel lost 2.1 to 2.5%. ABB, VAT Group, UBS Group, Schindler Ps and Givaudan ended lower by 1.5 to 1.8%. Geberit, Holcim, SGS, Partners Group, Sonova, Alcon, SIG Group, Richemont and Swiss Life Holding also closed notably lower. Lonza Group rallied 2.7%. Swatch Group gained a little over 1%. Novartis and Nestle posted modest gains. On the economic front, the Swiss procure.ch PMI rose slightly to 47.5 in January 2025, up from 47 in December but below market expectations of 49.

Europe
European stocks closed notably lower on Monday, as imposition of punitive tariffs by the U.S. President Donald Trump on Canada, Mexico and China and his warning that the European Union and the UK could be the next target for the levies triggered a sell-off across the board. The pan European Stoxx 600 closed down 0.87%. The U.K.'s FTSE 100 lost 1.04%, Germany's DAX ended down 1.4% and France's CAC 40 settled lower by 1.2%, while Switzerland's SMI finished 0.4% down. Among other markets in Europe, Austria, Belgium, Denmark, Finland, Greece, Iceland, Ireland, Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden and Turkiye all ended week, recording sharp to moderate losses. In the UK market, JD Sports Fashion closed down 4.7%. Scottish Mortgage, Pershing Square Holdings, Croda International, Ashtead Group, Weir Group, HSBC Holdings, Associated British Foods, Standard Chartered, Alliance Witan, Antofagasta, Glencore, Barclays Group and Next lost 2 to 4%.Coca-Cola, Vodafone Group and Fresnillo gained nearly 2%. BT Group, Admiral Group, IAG, 3i Group, Imperial Brands, National Grid, BAE Systems, Airtel Africa and Compass Group gained 0.5 to 1.2%. In the German market, Volkswagen, Siemens Energy, BASF, Porsche, Puma, Deutsche Bank, Mercedes-Benz, Daimler Truck Holding, Bayer, Siemens, Continental, Infienon, BMW and Sartorius lost 2.5 to 4.5%.

United States
Stocks moved sharply lower early in the session on Monday but regained ground over the course of the trading day. The major averages climbed well off their worst levels, with the Dow briefly reaching positive territory, but ended the day in the red. After plunging by as much as 2.5 percent in early trading, the tech-heavy Nasdaq finished the session down 235.49 points or 1.2 percent at 19,391.96. The S&P 500 also slid 45.96 points or 0.8 percent to 5,994.57, while the Dow fell 122.75 points or 0.3 percent to 44,421.91. The recovery attempt by stocks came after President Donald Trump confirmed he has reached an agreement with Mexican President Claudia Sheinbaum to pause recently implemented tariffs on Mexico for one month. The tariff pause comes after Sheinbaum said Mexico will immediately reinforce its northern border with 10,000 members of its National Guard to prevent drug trafficking from Mexico to the United States, particularly fentanyl. Stocks moved sharply lower in early trading amid concerns about a global trade war after Trump officially imposed a 25 percent tariff on imports from Canada and Mexico and a 10 percent tariff on imports from China. Computer hardware stocks regained ground after an early sell-off but still ended the day significantly lower, dragging the NYSE Arca Computer Hardware Index down by 2.6 percent. Considerable weakness also remained visible among housing stocks, as reflected by the 2.4 percent slump by the Philadelphia Housing Sector Index. Airline, semiconductor and banking stocks also saw notable weakness, while gold stocks moved higher along with the price of the precious metal.

Asia
After falling sharply at the start of the week, the stock markets in East Asia and Australia recovered on Tuesday. However, the stock markets are coming back from higher mark-ups after China announced the introduction of tariffs on some US products. While an additional tariff on goods from China is due to come into force on Tuesday, Trump has initially suspended tariffs on imports from Mexico and Canada for 30 days following talks. On the Tokyo stock exchange, the Nikkei index rises by 0.6 per cent to 38,743 points, but comes back from higher mark-ups.

Bonds
In the U.S. bond market, treasuries gave back ground after an early advance but remained in positive territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 2.6 basis points to 4.543 percent.

Analysis
Barclays raises Lonza target to CHF 710 (630) – Overweight
Barclays lowers Swedbank to Underweight from Equalweight
JP Morgan raises target Erste Group to EUR 63 (61) – Overweight

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