Zurich stock market: in the red after the Fed and US inflation

Zurich (awp) – The Swiss stock market lost ground on Thursday. As elsewhere in the world, investors were shocked by the announcements of the US Federal Reserve (Fed) the day before, especially the revision of rate forecasts.

After two tentative breakouts into the green during the first hour of trading, the SMI settled into the red for good, falling below the 12,100 mark in the afternoon to finish slightly above the day’s low.

In New York, Wall Street moved in disarray in the morning, trying to climb even higher after a series of records based on indicators that confirm the slowdown in inflation and the labor market.

US producer prices (PPI) fell 0.2% in May from April, while economists had forecast a 0.1% rise. “This lower-than-expected number will fuel bondholders’ revolt against the Fed’s monetary policy committee projections, specifically a rate cut this year,” High Frequency’s Rubeela Farooqi said in a note.

“The fact that neither the PPI nor the CPI came in above forecasts plays into stocks’ hands because it means the Fed has room to cut rates if it wants to,” says Adam Sarhan of 50 Park Investments.

In Switzerland, after several months of progress, producer and import prices fell in May, mainly due to lower prices of hydrocarbons and pharmaceutical products. The price of electricity for wholesale customers has increased. The decrease is 0.3% in one month and 1.8% in one year.

The SMI ended down 0.59% at 12,095.99 points with a low of 12,072.74 and a high of 12,175.52. SLI lost 0.75% to 1963.31 points and SPI lost 0.60% to 16,068.56 points. Of the 30 star stocks, 23 declined and 7 advanced.

Two Roche titles (holder +1.2%, good +0.9%) accompany Sandoz (+1.3%) on the day’s podium.

The other two heavyweights Novartis (-0.4%) and Nestlé (+0.2%) recorded a different development.

Sika (-3.1%) finished at the bottom, behind UBS (-2.5%) and Straumann (-2.1%).

The other bank, Julius Bär (-1.9%), also underperformed.

Escalator and elevator maker Schindler (well -0.1%) has appointed two new people to its general management. Danilo Calabrò and Vikén Martarian will join the executive committee as managers for Southern Europe and the Americas.

At Biel-based Swatch (-0.4%) , Damiano Casafina, CEO of the production company ETA, and Sylvain Dolla, CEO of the Tissot brand and member of the group’s extended general management, were appointed to the company’s general management meeting. group during the last Swatch Group board meeting.

At Geneva-based Richemont (-1.7%), the envelope allocated to group managers increased during the 2023/24 financial year that ended in March. However, general manager Jérôme Lambert saw his income drop somewhat to 7.12 million Swiss francs.

Sonova (-1.6% or -CHF 4.60) was treated ex-dividend at CHF 4.30.

In the broader market, secure access specialist Dormakaba (-0.3%) has opened a “Business Services Center” in Sofia, Bulgaria. This new center will combine services and expertise.

The operating company of Kloten Airport, Flughafen Zürich (-1.3%), surpassed the number of passengers before the pandemic for the first time since the Covid-19 period: in May it was 102% of the number in May 2019.

Converter manufacturer LEM (-5.2%) notes the departure of its longtime CFO Andrey Borla, who will leave the company at the end of November. His duties will be taken over on an interim basis until a successor is appointed.

Valiant Bank (+0.8%) presented its new financial targets for the period 2025-2029, on which it will spend 38 million Swiss francs. The new plan includes a distribution rate of “at least 50%.

rp/cw

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