Research Market strategy
By Swissquote Analysts
Published on 03.02.2023
Morning news

Apple CEO Tim Cook Says Economic Challenges a Headwind

Topic of the day

Apple Chief Executive Tim Cook said economic challenges contributed to the company's slowing sales in the December quarter, in addition to manufacturing issues stemming from Covid-related disruptions in China. The comments came after the iPhone maker announced its first quarterly revenue decline in nearly four years, with sales of $117.2 billion that missed analyst expectations. "We estimated that we would have grown on the iPhone absent the supply constraints," Mr. Cook said in an interview. "The macroeconomic situation is more difficult to estimate, but it's apparent from looking at the numbers that wind was in our face for the quarter." Apple shares fell by about 4% in after-hours trading. Mr. Cook said the company is managing costs very tightly and is curtailing hiring in certain areas, while continuing to hire in others. "I view layoffs as a last resort kind of thing," Mr. Cook said. "You can never say never. We want to manage costs in other ways to the degree that we can."

Swiss stocks

After opening higher, the Switzerland stock market slipped into the red around noon and stayed weak right till the end of the session on Thursday, with investors largely making cautious moves, despite positive global cues. The benchmark SMI, which climbed to 11,279.81 in early trades, ended with a loss of 12.51 points or 0.11% at 11,188.42, nearly 50 points off the day's low. ABB, Zurich Insurance Group and Novartis lost 2.4 to 2.8%. Roche Holding ended nearly 2% down, while Nestle and Swisscom shed 1.08% and 0.74%, respectively. Partners Group climbed more than 9%. Sika, Sonova, Gebrit, Lonza Group and Credit Suisse surged 4.5 to 6%. Givaudan ended nearly 4% up. Logitech rallied 3.3% and Alcon gained about 2.35%. UBS Group, Richemont and Holcim also ended notably higher. In the Mid Price Index, Zur Rose zoomed nearly 17%. Straumann Holding surged 12%. Kuehne & Nagel, VAT Group and AMS gained 7.8%, 7.1% and 6.9%, respectively. Temenos Group, Schindler Ps, Schindler Holding, Georg Fischer, Ems Chemie Holding, Belimo Holding, Tecan Group, Bachem Holding and Adecco ended stronger by 3.3 to 5.5%.

International markets


European stocks closed higher on Thursday with investors digesting the monetary policy announcements from the European Central Bank (ECB) and the Bank of England (BoE), and reacting to the Federal Reserve's interest rate decision, and Fed Chief Jerome Powell's comments. The pan European Stoxx 600 climbed 1.35%. The U.K.'s FTSE 100 gained 0.76%, Germany's DAX surged 2.16% and France's CAC 40 advanced 1.26%, while Switzerland's SMI edged down 0.11%. Among other markets in Europe, Belgium, Czech Republic, Finland, Iceland, Ireland, Netherlands, Poland, Portugal, Russia, Spain, Sweden and Turkiye ended with sharp to moderate gains. Austria and Greece posted modest gains, while Denmark and Norway closed weak. The BoE raised its benchmark rate by a half percentage point to 4% today, citing stronger-than-expected wage growth but softened its stance on future tightening as inflation is set to return to the target in medium term. The bank rate is now the highest since 2008. In the monetary policy report, the BoE said inflation is expected to fall quickly this year and the recession would be much shallower than projected in November. However, growth is forecast to remain well below pre-pandemic rates. Inflation is seen falling to around 4% towards the end of this year and to hit the 2% target sustainably in the medium term. Inflation has turned the corner, Governor Andrew Bailey said at the press conference. Gross domestic product is expected to shrink 0.1% in the first quarter of 2023 and to contract 0.5% in the whole year as high energy prices and the path of market interest rates weigh on output. The ECB raised its key interest rates by 50 basis points, in line with expectations, and signaled that policymakers plan to repeat the move in March, when they will evaluate the future path of policy rates.

United States

The S&P 500 and Nasdaq Composite climbed on Thursday, powered by big technology stocks, as the Federal Reserve's decision to slow the pace of interest-rate hikes fueled investors' hopes that the central bank could pivot to cutting rates later this year. The S&P gained 1.5%, while the tech-focused Nasdaq Composite jumped 3.25%. The Dow Jones Industrial Average was the laggard, slipping 0.1%. Alphabet and posted gains of more than 7%. Both were scheduled to report earnings after the closing bell. Facebook parent Meta Platforms, which reported quarterly results late Wednesday, zoomed 23% higher after it gave an upbeat outlook for the coming year and said it would buy back an added $40 billion in shares. Markets were also buoyed Thursday by fresh economic data. U.S. jobless claims, a proxy for layoffs, showed continued resilience in the labor market, even amid layoff announcements in tech and other industries. Claims fell by 3,000 to a seasonally adjusted 183,000 last week, hitting their lowest level since April 2022. Meanwhile, Labor Department data showed slowing wage growth, a sign that inflation may be easing.


No clear trend is emerging on the Asian stock markets on Friday. The weakness of the Chinese stock exchanges is conspicuous, while the other places show slight gains. Falling yields on government bonds, for example in Australia, underline the market's hope that the central banks will soon reach the interest rate peak in the current interest rate hike path. Apparently, the market is not following the central banks' outlook, traders say. In Shanghai and Hong Kong, the market is down despite positive economic data. The Caixin Purchasing Managers' Index for the service sector clearly jumped into expansion-indicating territory in January.


In the U.S. government-bond market, the yield on the benchmark 10-year U.S. Treasury note yields ticked lower after two days of declines, slipping to 3.396% from 3.398% on Wednesday. Yields rise when bond prices fall.


JP Morgan raises Easyjet target to 370 (310) p – Underweight
UBS raises BBVA target to EUR 8.40 (7.85) – Buy
Barclays raises Unicredit to Overweight (Equalweight) – Target EUR 24 (17.40)

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