Research Market strategy
By Swissquote Analysts
Published on 14.01.2022
Morning news

Tesco 3Q, Christmas Sales Rose, Driving Upgrade to FY 2022 Guidance

Topic of the day

Tesco PLC said that it has had stronger-than-expected sales to date after a strong third quarter of fiscal 2022 and robust sales during Christmas, and that it now expects to post a retail operating profit for the full fiscal year slightly above its previous top-end guidance. The U.K.’s biggest grocer by market share said like-for-like retail sales rose 2.6% on year in the 19 weeks ended Saturday, rising 2.4% in the third quarter and 3.2% in the Christmas period. The company’s retail operating profit guidance is in the range of 2.5 billion to 2.6 billion pounds ($3.56 billion-$3.43 billion). In the U.K., Tesco’s like-for-like sales rose 0.2% in the 19-week period, and increased 4.9% in Central Europe. During the Christmas period, sales rose 0.3% in the U.K. and 8.1% in Central Europe. In relation to its bank, Tesco said sales increased by 34%, driven by the full ownership of Tesco Underwriting earlier in 2021. Excluding Tesco Underwriting, sales fell 5.9%, as income reduced from lower unsecured lending balances on an on-year basis.

Swiss stocks

With the negative trend on Wall Street, the SMI slipped into the red again on Thursday. The SMI closed with a discount of 0.4 per cent at 12,620 points. Among the 20 SMI stocks, there were 12 price losers and eight price winners. A total of 30.20 (previously: 32.77) million shares were traded. With the prospect of rising interest rates, financial stocks remained in demand on the reporting day. However, they were also waiting for the upcoming results of the US banks at the end of the week. According to Factset, analysts expect banks listed on the S&P-500 to have posted total profits of 31.2 billion US dollars in the fourth quarter, which would be a decline of 2.4 per cent compared to the previous year. Like other industries, banks will have to adjust to the omicron reality. Shares in Credit Suisse, Swiss Life, Swiss Re and UBS were up between 0.1 and 2.6 per cent.

International markets


European equity indices closed slightly lower on Thursday as investors continued to try to determine how quickly the Federal Reserve (Fed) might tighten monetary policy. The Stoxx Europe 600 index ended flat at 486.1 points. In Paris, the CAC 40 and SBF 120 were down 0.5% and 0.4%, respectively. In Frankfurt, the DAX 40 gained 0.1% and the FTSE 100 in London gained 0.2%. ASOS PLC plans to move to the main market of London Stock Exchange by the end of February, a move analysts embrace while also noting that it should have happened sooner. The U.K. online fashion retailer should now qualify for a place in the FTSE 250 index later in 2022 given its market capitalization of 2.5 billion pounds ($3.43 billion), and benefit from a new shareholder base and deeper pools of capital, AJ Bell’s investment director Russ Mould said. However, ASOS could potentially have entered the FTSE 100 if the move had come at its peak market capitalization, Mr. Mould noted. Pepco Group BV said Thursday that revenue in the first quarter of fiscal 2022 rose despite pandemic-driven operating restrictions across many territories. The owner of brands such as Poundland in the U.K. and Dealz in continental Europe said revenue during the quarter ended in December rose 12% on a constant-currency basis to 1.35 billion euros ($1.54 billion). On a like-for-like basis, sales rose 0.7%.

United States

The S&P 500 and Nasdaq Composite both fell on Thursday as declines in technology shares weighed on the stock market. The S&P 500 dropped 1.4%, while the tech-heavy Nasdaq Composite lost 2.5%. The Dow Jones Industrial Average fell 0.5%. Technology stocks have come under pressure in the new year as government-bond yields have risen. Higher yields can reduce the appeal of the future earnings promised by many tech stocks. The S&P 500's tech sector dropped 2.2% for the session, bringing its year-to-date losses to 5.2%. The largest U.S. stocks helped pull the market lower, with Apple shares falling 1.5% and Microsoft shares sliding 3.8%. More economically sensitive parts of the stock market held up better, with the industrial sector of the S&P 500 gaining 0.3%. Goldman Sachs Group Inc. again delayed its plans to bring employees back to the office in response to the spread of the Omicron Covid-19 variant. The bank told employees in an email that they could work from home until Feb. 1, a company spokeswoman said Thursday. Goldman had instructed its workers earlier this month to return on Jan. 18. Goldman had been among the more aggressive banks about returning to in-person work and had largely full offices as recently as last month, but Omicron forced a temporary rethink of those plans. The delay was earlier reported by Bloomberg News. Microsoft Corp.’s board of directors on Thursday said it would review the company’s sexual harassment and gender discrimination policies and unveil a summary of the results of past investigations into how the company handled allegations against company executives, including co-founder Bill Gates. The software company’s board is taking this action in response to an unexpected win by activist shareholders at the company’s annual investor meeting in November with a proposal demanding greater disclosure around sexual harassment issues.


Concerns about rising interest rates are once again the dominant theme on the stock markets in East Asia and Australia on Friday. It fits into the picture that the South Korean central bank raised its key interest rate again on Friday, the first time since 2007 that it has done so twice in a row. This was expected by the majority. The Kospi in Seoul then lost 1.5 per cent and in Tokyo the leading index fell by 1.4 per cent to 28,103 points.


Treasury yield rose slightly after they fell Thursday, with yields on 10- and 30-year notes hitting their lowest levels in more than a week, following a $22 billion bond auction and scant 0.2% rise in wholesale prices.


BoA lowers Zur Rose target to CHF 420 (515) – Buy
JP Morgan lowers Rio Tinto target to 4,840 (4,900) p – Neutral
CS lowers Just Eat Takeaway target to GBP 74 (93) – Outperform

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