By Swissquote Analysts
Porsche, Puma and Airbus among the 10 new stocks in the expanded DAX index
Topic of the day
Deutsche Boerse announced that European aircraft manufacturer Airbus, carmaker Porsche and sports equipment maker Puma would be among the 10 new stocks that will join the expanded DAX index from September 20. The stock exchange operator announced last year that it would increase the number of DAX components from 30 to 40 in the largest overhaul of the Frankfurt Stock Exchange's flagship index since its creation in 1988. Deutsche Boerse said in a statement Friday night that it had chosen to add the stocks of Airbus, Puma, Porsche, Zalando, Siemens Healthineers, Symrise, HelloFresh, Sartorius, Brenntag, and Qiagen to the current 30 components. This increase in the DAX index will come at the expense of the MDax mid-cap index, which will fall from 60 to 50 companies, he added.
The stock market in Switzerland suffered significant losses on Friday. A miserable U.S. labor market report exerted pressure. Instead of an expected employment increase of 720,000, only 235,000 jobs were created in August. Participants harboured fears that the delta variant of the coronavirus had slowed the U.S. recovery. The dollar showed weaker quotations against the other major currencies. The franc gained significantly, which does not benefit the export-strong Swiss economy. The SMI lost 0.6 percent to 12,352 points. Among the 20 SMI stocks, there were 17 price losers and 3 price winners. Turnover was 22.96 (previously: 19.88) million shares. Luxury goods stocks were under pressure after two strong days. The current situation in China motivated investors to take profits. Beijing wants to impose higher taxes on the consumption of luxury goods. In addition, sentiment in China's service sector deteriorated in August. Richemont fell 2.5 percent and Swatch lost 1.8 percent. There was no preference for defensive or cyclical stocks. Among defensive pharmaceutical giants, Novartis lost 1.2 percent and Roche 0.2 percent. Among cyclicals, Holcim declined by 0.7 percent and Sika by 1.2 percent. Financials did not benefit from rising yields. Zurich Insurance fell by 1 percent, UBS by 0.5 percent and Credit Suisse also by 0.5 percent.
European indices fell on Friday after the publication of significantly weaker than expected U.S. non-farm payroll data. The Stoxx Europe 600 index fell 0.6% to 471.9 points. In Paris, the CAC 40 and SBF 120 lost 1.1% and 1%, respectively. In Frankfurt, the DAX 30 dropped 0.4% as did the FTSE 100 in London. Tourism-related stocks declined as the Delta variant continues to raise uncertainties about the travel recovery. In Paris, Aéroports de Paris fell by 3.5%, Accor lost 2.7%. In London, the cruise company Carnival gave up 3.5%. TechnipFMC (-1.8%) announced the sale of 17.6 million Technip Energies shares (+5.6%) to the Dutch investment company HAL for €196.2 million, at a unit price of €11.15. Arkema gained 0.2% to 111.35 euros. HSBC raised its recommendation from "hold" to "buy" on the stock, while raising its target price from 110 to 129 euros. On the other hand, the British bank HSBC lowered its recommendation on Schneider Electric (-0.3% to 153.88 euros) from "buy" to "hold" while raising its target price from 155 to 160 euros. The European Commission announced on Friday that the European Union and British pharmaceutical company AstraZeneca (-1.2% in London) had settled their dispute over the supply of Covid-19 vaccines, putting an end to legal proceedings in Belgium. Shares of emerging-markets asset management firm Ashmore Group fell 4.6% in London trading after it posted full-year results that showed net revenues were down.
The S&P 500 drifted lower Friday but managed to post weekly gains ahead of the holiday weekend. The stock market was relatively quiet this week with major indices sticking to a narrow range most days. Earnings season has wound down now that the bulk of S&P 500 companies are done sharing their second-quarter results. Trading typically slows down ahead of the Labor Day weekend since U.S. stock and bond markets are closed Monday in observance of the holiday. On Friday, the Labor Department’s employment report showed the pace of hiring slowed significantly in August, with the economy adding 235,000 jobs, well below the 720,000 jobs that economists surveyed by The Wall Street Journal had estimated. The S&P 500 dropped 1.52 points, or less than 0.1%, to 4535.43. For the week, the index rose 0.6%. The Dow Jones Industrial Average lost 74.73 points, or 0.2%, to 35369.09 on Friday and edged down 0.2% for the week, while the Nasdaq Composite closed at a fresh record, rising 32.34 points, or 0.2%, to 15363.52 on Friday and adding 1.5% for the week. Among individual stocks, software company MongoDB jumped $105.76, or 26%, to $507.41 after reporting a narrower-than-expected loss for its latest quarter and getting a price target upgrade from analysts at Piper Sandler. Hewlett Packard Enterprise added 9 cents, or 0.6%, to $15.48 after beating analysts’ expectations in its quarterly earnings, but also warning that its supply-chain challenges would likely persist through at least the first half of 2022. Shares of companies that depend on travel and tourism were among the weaker performers for the week. American Airlines Group, Delta Air Lines and Norwegian Cruise Line Holdings all posted weekly losses. Meanwhile, defensive shares—names that investors tend to gravitate toward when they are feeling more uncertain about the economic outlook—outperformed the broader market. Grocery chain Kroger posted a 2.6% gain for the week, while utility NextEra Energy was up 2.7%.
The Tokyo Stock Exchange continues to climb significantly on Monday. After the 1.8 percent gain on Friday, the Nikkei index increases by another 1.7 percent to 29,128 points. In addition, Shanghai is also very firm with a plus of 1.0 percent. Elsewhere in Asia, it is quieter with moderate gains in Hong Kong and small losses in Seoul and Sydney. In Hong Kong, the strong plus of the heavyweight Tencent (+3.0%) supports the index.
U.S. government bond yields rose Friday after Labor Department data showed U.S. employers pulled back on hiring in August during a surge in Covid-19 cases. The yield on the benchmark 10-year Treasury note finished Friday’s session at 1.322%, according to Tradeweb, up from 1.293% at Thursday’s close. The 30-year bond yield rose to 1.942%, from 1.906% Thursday.
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