A top Federal Reserve official said he expects to begin discussing a reduction in the central bank's massive asset purchases at a coming policy meeting, while stressing the need to closely monitor economic data. "There will come a time in coming meetings, we'll be at the point where we can begin to discuss scaling back the pace of asset purchases," Fed Vice Chairman Richard Clarida said in an interview on Yahoo Finance. "It's going to depend on the flow of data that we get."
Since last June, the Fed has been buying $80 billion of Treasury debt and $40 billion of mortgage-backed securities each month to hold down long-term borrowing costs. The policy, also known as quantitative easing, provides the economy with support beyond the near-zero overnight interest rates the Fed has maintained since March 2020. Minutes from the Fed's most recent policy meeting, on April 27-28, showed "a number of participants" called for a discussion of the asset purchases "at some point in coming meetings," assuming the economy continues to recover swiftly. Mr. Clarida said he has a "very, very positive" outlook for the U.S. economy and that he expects the labor market to begin recovering faster after hiring unexpectedly slowed in April. He also suggested the Fed will tighten policy more quickly than it currently expects if recent inflationary pressures, viewed by central bankers as likely transitory, prove more persistent than anticipated.

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Strong U.S. indications gave the Swiss stock market a boost on the first trading day after the long Whitsun weekend. The SMI broke its old record mark from February and reached a new all-time high of 11,332 points. At the close of trading, the index was 0.7 percent higher at 11,306 points. Among the 20 SMI stocks, there were 16 price gainers and three price losers, and one share closed unchanged. 40.95 (previously: 40.45) million shares were traded. Everything was bought across the board: cyclicals were just as much in demand as defensive stocks. The strongest stock in the SMI was Richemont (+3.3%). After the strong business figures of the luxury goods group on Friday, there was a hail of positive analyst comments for the company. In the wake of Richemont, Swatch gained 3.1 percent. Partners Group improved by 1.4 percent. Omers, the pension fund for municipal employees in the Canadian province of Ontario, took a 25 percent stake in International School Holding, which was founded by Partners Group. An expanded approval of the leukemia drug venclyxto in the EU helped Roche gain 0.5 percent. Novartis advanced 0.2 percent. SMI heavyweight Nestle posted a gain of 1.0 percent. The shares of the two banks CS Group and UBS rose by 0.9 and 1.0 percent, respectively. UBS was supported by a positive commentary from Berenberg analysts.

European stocks marched further into the green on Tuesday, surpassing record highs notched in early May, as Germany's main stock market index was boosted by a $22 billion deal between two property giants. The pan-European Stoxx 600 lifted 0.4% and Frankfurt's DAX rose 0.8% as both indexes hit record highs. In London, the FTSE 100 was trading around flat while the CAC 40 in Paris was 0.1% higher. Analysts noted that macro forces shaping markets remained largely unchanged, with the focus in Europe increasingly turning to easing COVID-19 restrictions. Inflation concerns remain in investors' minds and continue to shape messages from central banks. Boosting spirits in Europe was German business sentiment, measured by the Ifo business-climate index, which came in at 99.2 points for May compared with 96.6 in April - the highest point in two years. Expectations were for the index to notch 98 points. Adding buoyancy to German markets, shares in property company Deutsche Wohnen soared more than 15%, after rival Vonovia said it had agreed to acquire the group in a cash deal worth around EUR18 billion ($22 billion). Both companies are constituents in the DAX index. Shares in Vonovia, which is Europe's largest residential property group, dropped 4%. The deal for Deutsche Wohnen, at EUR53.03 per share, values the group at a near-18% premium to the stock price before the agreement was announced. Deutsche Wohnen stock hasn't traded above EUR50 per share since 2007, before the 2008-09 financial crisis.

U.S. stocks wobbled Tuesday, with the major indexes hovering around the flatline, while bitcoin prices edged lower again after a period of volatile trading. The S&P 500 slipped 8.92 points, or 0.2%, to 4188.13, and Dow Jones Industrial Average edged down 81.52 points, 0.2%, to 34312.46. The Nasdaq Composite dropped 4 points, or less than 0.1%, to 13657.17. All three indexes had opened modestly higher before losing steam. Bitcoin prices edged lower following several days of whipsaw trading for cryptocurrency markets. Bitcoin edged down to $37,656 as of 5 p.m. Tuesday, dropping from $38,999 on Monday. In corporate news, shares of Moderna rose 3.1% after the drugmaker said its Covid-19 vaccine was effective in children between the ages of 12 and 17. Lordstown Motors dropped 7.5% after the electric-truck startup said it was facing higher-than-expected costs and cut its 2021 production forecast. AutoZone slipped 1.9%, despite news the auto-parts retailer’s sales beat expectations. As the vaccine rollout continues and the country reopens, sales of cruise lines increased, with shares of Royal Caribbean Group rising 3.7%. Norwegian Cruise Line Holdings and Carnival added 3.6% and 2.4%, respectively.

Moderate increases predominate on the Asian stock exchanges in late trading on Wednesday. While Singapore is closed due to the holiday, in Tokyo the Nikkei-225 rises by 0.4 percent. The Shanghai Composite (+0.29%) is slightly firmer. In Hong Kong, however, the HSI increases more significantly by 0.7 percent - carried by premiums in the technology and consumer sector. The Kospi (-0.19%) in South Korea drops slightly.

Yields for long-dated U.S. government debt on Tuesday fell for a fourth straight session, carving out their lowest level in about three weeks, as investors read comments of tapering from Federal Reserve officials as bearish for risk assets in the short term.The yield on the benchmark 10-year U.S. Treasury note declined to 1.563% from 1.608% Monday.

DZ lowers Vonovia target to EUR 60 (66) - Buy
LBBW raises Merck target to EUR 160 (145) - Buy
RBC lifts H&M to Outperform (Sectorperformance) - Target 250 SEK

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