By Swissquote Analysts
Boeing Reports Quarterly Earnings Fall, Plans to Increase Jet Production
Topic of the day
Boeing Co. reported another quarterly loss but maintained plans to increase jet production and deliveries this year despite lingering supply-chain challenges. The company reported its fourth annual loss in a row as it wrestles with commercial-jet production costs that are higher than planned. Both Boeing and rival Airbus SE benefited from a rebound in aircraft orders last year as airlines recovered from the pandemic-driven travel downturn. The companies have struggled to boost production to match, citing shortages of jet engines and other components. Boeing’s fourth-quarter earnings and sales both fell short of analysts’ expectations. It didn’t report additional charges for production missteps, having taken some in 10 of the past 12 quarters. Arlington, Va.-based Boeing has taken charges on big military programs including the KC-46A tanker and Air Force One replacement, for inefficient production rates on its commercial aircraft and compensation for customers of delayed jets.
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After spending almost the entire session in negative territory, the Switzerland market ended flat on Wednesday with stocks finding some support in the closing minutes. With no significant economic data to provide direction, the mood remained largely cautious. The benchmark SMI ended with a loss of 1.52 points or 0.01% at 11,404.77, the day's high. The index touched a low of 11,327.93. Sonova climbed nearly 3% and Credit Suisse ended 2.83% up. Logitech and Partners Group ended lower by about 2.5% and 2.2%, respectively. Lonza Group soared nearly 7.5%. Holcim and Novartis ended with modest gains. In the Mid Price Index, Zur Rose ended down 3.48%. SIG Combibloc and Tecan Group shed about 2.7% and 2.25%, respectively. Belimo Holding, VAT Group, Galenica Sante, Kuehne & Nagel and Straumann Holding lost 1.28 to 2%. Dufry, Clariant, Swiss Prime Site, Bachem Holding and Flughafen Zurich gained 0.4 to 1%. A report from Credit Suisse & CFA Society said the Swiss investor sentiment rose by 2.8 points from the prior month to –40 in January of 2022, improving for the second consecutive month. The index remained in the negative territory for the 11th consecutive period, as high inflation in Europe amid the outlook of more rate hikes continued to pressure sentiment. The assessment of the current economic conditions rose by 12.4 points from December to 26.7.
Despite some positive economic data from the region, European stocks ended on a weak note on Wednesday. However, with stocks staging a fairly good recovery in the final hour, the downside was just marginal in the major markets. In addition to digesting the latest batch of economic data, investors also reacted to some disappointing earnings updates from top European and U.S. companies. Concerns about a potential U.S. recession, and geopolitical tensions weighed on sentiment. The pan European Stoxx 600 ended 0.29% down. The U.K.'s FTSE 100, Germany's DAX and France's CAC 40 edged down 0.16%, 0.08% and 0.09%, respectively. Switzerland's SMI ended flat. Among other markets in Europe, Belgium, Denmark, Finland, Netherlands, Norway, Poland, Portugal, Sweden and Turkiye closed weak. Czech Republic, Iceland and Ireland ended higher, while Austria, Greece, Russia and Spain settled flat. In the UK market, Aviva rallied 3.25%. IAG, United Utilities Group, Severn Trent, Prudential, Lloyds Banking Group, Antofagasta, GSK, Unite Group, Natwest Group and Barclays gained 1 to 2%. Ocado Group shared ended nearly 5% down. Experian ended lower by 3.7%. Scottish Mortgage, Croda International, Fresnillo, Melrose Industries, Rentokil Initial, BT Group and Standard Chartered also ended notably lower. In Paris, Dassault Systemes, Thales, Capgemini, Saint Gobain, Eurofins Scientific, Publicis Groupe and Kering ended with sharp to moderate losses.
U.S. stocks ended mixed Wednesday, as another busy day of earnings gave investors a fresh sense of how companies are coping with an economic slowdown and higher interest rates. The S&P 500 edged down less than a point, ending at 4016.22, as the benchmark index extended its losses into a second day. The Dow Jones Industrial Average rose 9.88 points to 33743.84, finishing less than 0.1% higher after spending most of the day in the red. The Nasdaq Composite dropped 20.91, or 0.2%, to 11313.36. Earnings season is in full swing this week, with investors getting fourth-quarter updates from some of the biggest names in markets. Microsoft on Tuesday afternoon was the first of the tech titans to report. Its results showed the company recorded its slowest sales growth in more than six years. That sent Microsoft shares falling and – combined with gloomy forecasts from companies including 3M – weighed on markets Wednesday, market watchers said. Microsoft fell $1.43, or 0.6%, to $240.61, though it pared deeper losses earlier in the day. Apple dropped 67 cents, or 0.5%, to $141.86. Alphabet, Google's parent, declined $2.48, or 2.5%, to $95.22. Quarterly results released early Wednesday did little to assuage investors. A bright spot was AT&T, whose stock gained $1.26, or 6.6%, to $20.42. The telecommunications company said it had added wireless subscribers in the latest quarter and plans to keep spending heavily on 5G.
Significant gains in Hong Kong and Seoul dominate the stock market picture in East Asia on Thursday. In Hong Kong, after the three-day Lunar New Year holiday break, the stock market rose by 1.8 per cent. The Kospi in Seoul is up 1.2 per cent on its second day of trading after the two-day break there. In Tokyo, however, the Nikkei index is down 0.2 per cent at 27,334 points after gains earlier in the week. Stock exchanges in mainland China remain closed for the rest of the week for New Year's celebrations. There will be no trading in Sydney on Thursday for Australia Day.
U.S. government bond yields retreated Wednesday. The yield on the 10-year U.S. Treasury note fell to 3.461%, from 3.467% Tuesday. Yields decline when bond prices rise.
UBS raises the Santander target to EUR 4.20 (4.15) – Buy
UBS raises the Erste Bank target to EUR 42.80 (42.50) – Buy
Barclays raises the Novartis target to CHF80 (75) – Underweight
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