Swiss stock market cautious ahead of US employment

Swiss stock market cautious ahead of US employment
Swiss stock market cautious ahead of US employment

The Swiss stock market opened on a cautious note on Friday, ahead of the employment figures in the United States and in the absence of data from Wall Street, which was closed the day before due to the July 4 national holiday. The agenda remained eminently political with the victory of the Labour Party in the British elections and two days before the second round of the legislative elections in France.

“With the main US indices closed, European markets ended higher thanks to a ‘political relief’ before the general elections in Great Britain, where the winner was already known – the Labour Party, and the legislative elections in France, where no ‘extreme’ party is expected to have an absolute majority,” summarized John Plassard of Mirabaud Banque.

In the United Kingdom, the Labour Party won an absolute majority in the future British Parliament following Thursday’s general election, returning to power after 14 years in opposition, according to partial results. Labour secured more than 340 seats, more than the 326 seats needed to obtain an absolute majority in the House of Commons and be able to form the future British government on its own.

At the macroeconomic level, household consumption in Japan fell by 1.8% in May year-on-year and adjusted for inflation, casting doubt on the short-lived recovery observed a month earlier.

Germany reported an unexpected drop in industrial production in May. The key indicator for manufacturing fell by a seasonally adjusted 2.5%, after a modest increase of 0.1% in April, revised upwards. Analysts polled by Factset had forecast a slight gain of 0.2% in the month under review.

Investors will be watching for data on the US labor market in June early this afternoon. The figures for private sector job creation, published on Wednesday and indicating a slight decline, should give “a foretaste” of the official statistics this Friday, estimated Frank Sohlleder. For the Activtrades analyst, these data have “raised hopes that the labor market is sending the expected signals to the Federal Reserve” so that the American central bank finally initiates the reduction of key rates.

At 09:08, the leading SMI index rose by just 0.1% to 12,081.00 points, after closing the previous day up 0.42%. The SLI gained just 0.02% to 1,962.56 points and the SPI gained 0.1% to 16,087.99 points.

A small majority of leading stocks were draped in green, with the strongest progression recorded by Roche (good +1.0%, bearish +0.7%). The pharmaceutical group obtained a green light from the US health regulator (FDA) for the marketing of a pre-filled syringe of Vabysmo (faricimab), an ophthalmic treatment itself duly approved since the beginning of 2022.

The two other heavyweights Novartis (+0.3%) and Nestlé (+0.1%) also rose modestly.

VAT Group (+0.9%) and Straumann (+0.9%) were also sought after.

The largest declines were recorded by Sonova (-1.0%), Kühne+Nagel (-0.8%) and Logitech (-0.5%).

Swatch (-0.03%) narrowly gave up its gains. Bryan Garnier analysts lowered their recommendation for the stock to “neutral”, from “buy” previously. They also cut the price target.

Emmi rose 1.3% on the SPI general index. The Lucerne-based dairy processor has reached an agreement to acquire the French Mademoiselle Desserts group, which specialises in high-end pastries. The company is valued at 900 million euros. (AWP)

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