Mercedes-Benz will cut jobs and shift some production from its German home to lower-cost countries as it prepares for another challenging year. After reporting a sharp drop in earnings in 2024, the company said it also expects earnings to fall significantly this year. At an investor event on Thursday, it outlined plans to boost competitiveness that include a 10% cut to production costs over the next couple of years. While it ruled out shutting any German plants, Mercedes will seek cost reductions by cutting capacity in the country, instead shifting more manufacturing to lower-cost countries such as Hungary. German headcount will also come down, with the company planning voluntary redundancy programs while employees leaving the company through natural attrition won’t be replaced. It didn’t provide details of how many jobs will be cut. “To ensure the company’s future competitiveness in an increasingly uncertain world, we are taking steps to make the company leaner, faster and stronger, while readying an intense product launch campaign for multiple new vehicles,” said Chief Executive Ola Kaellenius. European automakers have been scrambling to boost their competitiveness as they navigate stuttering demand for electric vehicles and intense competition in China, while a struggling Chinese economy has also seen buyers shy away from luxury spending.

The Swiss market closed slightly up on Thursday after a choppy session, as investors largely stayed cautious amid concerns about U.S. President Donald Trump's tariff threats, and geopolitical tensions. The benchmark SMI closed up 9.56 points or 0.07% at 12,808.08, after moving between 12,759.93 and 12,820.88. Zurich Insurance Group closed higher by 2.37%. The company's after-tax net income attributable to shareholders surged 34% year-over-year to $5.81 billion, while insurance revenue rose to $59.51 billion from $56.10 billion. Swatch Group climbed 3%. Adecco gained about 2%. Lindt & Spruengli ended 1.12% up. VAT Group, Kuehne + Nagel, Richemont, Lonza Group, Partners Group, ABB, Schindler Ps, SIG Group and Sika posted moderate gains. Sonova closed down 2.38%. UBS Group and Straumann Holding both closed lower by about 1.4%. Logitech International, Givaudan, Holcim, Sandoz Group, SGS and Swiss Re also closed weak. Data from the Federal Customs Administration showed Switzerland's foreign trade surplus decreased in January from a month earlier as exports fell faster than imports. The trade surplus declined to CHF 4.0 billion in January from CHF 4.4 billion in December.

Europe
European stocks closed weak on Thursday with quarterly earnings updates influencing investors' moves. Worries about a trade war following U.S. President Donald Trump's persistent threats that his administration will levy 25% tariffs on several goods imported into America, and lingering geopolitical tensions rendered the mood cautious. Investors also digested the minutes from the Federal Reserve's most recent monetary policy meeting. The pan European Stoxx 600 ended down 0.2%. The U.K.'s FTSE 100 settled lower by 0.57% and Germany's DAX closed 0.53% down, while France's CAC 40 gained 0.15%. Switzerland's SMI edged up 0.07%. Other markets in Europe closed on a mixed note. Austria, Denmark, Iceland, Netherlands, Norway and Poland ended weak. Belgium and Ireland edged down slightly. Finland, Greece, Portugal, Russia, Spain, Sweden and Turkiye closed higher. In the UK market, BAE Systems ended down 4.54%. Rolls-Royce Holdings closed 3.7% down, and Barclays ended nearly 2.5% down. BP, Rentokil Initial, Intercontinental Hotels Group, Scottish Mortgage, HSBC Holdings, Polar Capital Technology Trust, WPP, Tesco, Admiral Group, EasyJet, Imperial Brands, Melrose Industries and Haleon lost 1 to 2.5%. Centrica rallied 5.7% despite a drop in earnings. The stock gained as the company has decided to extend its share buyback program, saying that it will by back shares worth an additional £500 million, bringing the total to £2 billion. Lloyds Banking Group ended nearly 5% up. The lender said it set £700 million aside to cover the potential impact of historical commission arrangements on car loans. Investors also reacted positively to the lender's fourth-quarter results, and a higher-than-expected dividend, as well as a substantial buyback program.

United States
After moving sharply lower early in the session, stocks regained some ground over the course of the trading day on Thursday. The major averages climbed well off their early lows but remained firmly in negative territory. The S&P 500 fell as much as 1.0 percent in early trading but ended the day more moderately lower, down 26.63 points or 0.4 percent at 19,962.36. The Nasdaq also slid 93.89 points or 0.5 percent to 19,962.36 after tumbling as much 1.3 percent. The narrower Dow posted a more significant loss, slumping 450.94 points or 1.0 percent to 44,176.65. The early sell-off on Wall Street came amid a slump by shares of Walmart (WMT), with the retail giant and Dow component plunging by 6.5 percent. Walmart came under pressure after the company reported better than fiscal fourth quarter earnings but provided disappointing guidance for the current year. Traders may also been looking to cash in on the recent upticks by stocks, which lifted the S&P 500 to record highs despite ongoing tariff concerns and indications the Federal Reserve is likely to keep interest rates on hold for some time. On the U.S. economic front, a report released by the Labor Department showed a modest increase by first-time claims for U.S. unemployment benefits in the week ended February 15th. The Labor Department said initial jobless claims rose to 219,000, an increase of 5,000 from the previous week's revised level of 214,000. Economists had expected jobless claims to inch up to 215,000 from the 213,000 originally reported for the previous week. Financial stocks turned in some of the market's worst performances, with the KBW Bank Index and NYSE Arca Broker/Dealer Index tumbling by 2.4 percent and 1.9 percent, respectively. The nosedive by shares of Walmart also weighed on the retail sector, as reflected by the 1.9 percent loss posted by the Dow Jones U.S. Retail Index.

Asia
The stock markets in East Asia and Australia were mixed at the end of the week. While strong business figures from Alibaba lifted technology stocks in Hong Kong and thus the market as a whole, expectations of an interest rate hike put the brakes on the Japanese stock market.

Bonds
In the U.S. bond market, treasuries moved to the upside after ending the previous session roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 3.5 basis points to 4.50 percent.

Analysis
UBS raises Temenos target to CHF 54 (49.50) – Sell
UBS lowers Wienerberger to Neutral (Buy) – Target 31 (30) EUR
Bank of America raises Hermes target to EUR 3,000 (2,650) – Buy

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