Walmart Inc. (stable) logged another quarter of rising U.S. sales as a return to in-store shopping offset slower online growth, at a time when retailers are navigating rising costs, supply chain snarls and an uptick in Covid-19 cases in many parts of the country. U.S. e-commerce sales rose 6% from a year ago, when Covid restrictions kept many people home. Growth slowed from earlier in the year, both online and off, but was still given a boost by government stimulus dollars and a generally strong U.S. economy, the company said. Sales increased each month through the quarter, with July the strongest month, Walmart said. At Walmart, the latest quarterly sales and profits exceeded Wall Street’s estimates. For its fiscal year, Walmart forecast continued sales gains for the back-to-school and holiday shopping seasons. U.S. comparable sales will rise 5% to 6% for the year, Walmart said. Overall, Walmart reported fiscal second-quarter revenue rose 2.4% to $141 billion, as divestitures of stores in some international markets depressed total revenue. The company had net income of $4.28 billion, down 34% from a year ago when it booked a gain on investment. Excluding such items, Walmart said it had an adjusted profit of $1.78 a share, beating analysts expectations of $1.57 a share, according to FactSet. Walmart’s stock has risen more slowly than the overall market, up 4.6% year-to-date compared to 16.4%.

After the small setback at the beginning of the week, the Swiss stock market rose again on Tuesday. In the process, the SMI benchmark index marked a new record high. The SMI gained 0.5 percent to 12,477 points. Among the 20 SMI stocks, there were eleven price gainers and nine losers. Turnover was 25.32 (previously: 25.71) million shares. Weak retail data from the U.S. and the spreading delta variant of the coronavirus hardly dampened the mood on the broad market. Observers pointed to the persistent low interest rate environment. Lacking other options, investors parked their money in the stock market, they said. However, investors favored defensive stocks over cyclicals. Index heavyweight Nestle gained 1.5 percent. In the pharmaceutical sector, Novartis, Roche and Lonza gained between 0.4 and 1.7 percent. Givaudan advanced 1.2 percent. Among cyclicals, Holcim lost 0.9 percent. ABB closed 0.3 percent lower. Shares of luxury goods manufacturers Richemont (-1.9 percent) and Swatch (-1.0 percent) were also under significant pressure. They depend heavily on business with China, which has tightened pandemic restrictions again due to rising infection figures. Shares of Swiss Life (-1.7%) were sold off. Investors took the solid business figures of the insurer as an opportunity to take profits after the share had previously run well. Swiss Life posted a higher adjusted profit in the first half despite a 7% drop in premiums and confirmed its financial targets for 2021. Citi said the results were reassuring, with strong growth in fee income of 15% year-on-year. The insurer's return on equity was 11%, higher than its target of 8%-10%, and an upwards revision should be expected at the upcoming capital markets day, said Citi.

European stocks fell Tuesday, with the Stoxx Europe 600 shedding 0.2%, dragged down by declines in the energy and utilities sectors. BHP Group said it will combine its oil-and-gas business with Australia's Woodside in an all-stock deal, adding that it would end its dual listing in London. BHP also approved a $5.7 billion project to mine potash in Canada, as it adjusts to the prospect of a lower-carbon world, where old profit drivers such as petroleum and thermal coal are less appealing. BHP stock gained 6% on the news, topping the FTSE 100 risers. Just Eat reported an interim adjusted loss of EUR190 million, despite a 52% rise in revenue that included Grubhub and reiterated its guidance for the full year. ING said the adjusted Ebitda loss came in better than expected, mainly due to a lower-than-anticipated loss in the U.S. Just Eat's shares in London rose 3.6%. Deutsche Post is strengthening its position in the sea freight sector with an acquisition, buying the J.F. Hillebrand Group for around 1.5 billion euros. Faurecia fell by 3.6%, consolidating its gains of the previous day. On Monday, the automotive supplier's share price had gained 12.1% after the announcement of the signing of an agreement with the family shareholders and the board of directors of its German competitor Hella, with a view to its takeover. The broker First Berlin raised its target price on Valneva (+1.9%) to 14.4 euros, from 13.5 euros previously, while confirming its buy recommendation on the laboratory specialized in vaccines against infectious diseases.

U.S. stocks slid Tuesday, retreating from a stretch of records as weaker-than-expected economic data and concerns about the Delta variant of the coronavirus weighed on investor optimism. All three major U.S. indexes tumbled, with the S&P 500 and the Dow Jones Industrial Average both snapping five-day winning streaks. The S&P 500 fell by 31.63 points, or 0.7%, to end at 4448.08, its largest decline in nearly a month. The Dow Jones Industrial Average lost 282.12 points, or 0.8%, to finish at 35343.28. The technology-heavy Nasdaq Composite dropped 137.58 points, or 0.9%, to 14656.18. Shares of retailers and other cyclical companies tumbled. Retailer Home Depot lost $14.30, or 4.3%, to end at $320.75, marking its biggest percentage decline since November, after the company reported that the number of customer transactions fell in the latest quarter. Lowe’s fell by $11.22, or 5.8%, to $182.26, ahead of the company’s earnings report Wednesday. Retailers Gap, Hanesbrands and Bed Bath & Beyond each fell 3.6% or more. Shares of home builders also pulled back after new data showed that home-builder confidence in the U.S. declined in August, falling to its lowest level since July of last year. Higher construction costs and supply shortages contributed to the fall. D.R. Horton, Toll Brothers and PulteGroup each fell at least 3.9%. Tesla lost $20.46, or 3%, to end at $665.71, adding to a loss of more than 4% Monday, driven by a probe into its autopilot system. Travel stocks including cruise line Carnival, American Airlines and Marriott International each pulled back 2.1% or more. Healthcare stocks, in contrast, were a bright spot. Moderna climbed $28, or 7.5%, to $401.86, while Pfizer added $1.51, or 3.1%, to $50.42. The Biden administration is expected to announce that Americans who have been fully vaccinated against Covid-19 should receive a booster shot for continued protection, according to people familiar with the matter.

On Wednesday, the stock exchanges in East Asia show a reverse development to the previous day: after a lighter start, the indices trend significantly upwards, although the gains are not as pronounced as the losses on the previous day. This applies in particular to the Chinese stock exchanges, which can recover by 0.7 percent. On a similar scale, the Nikkei index in Tokyo also gains ground, rising to 27,638 points. In Hong Kong, the recently hard-hit technology stocks Tencent, Meituan and Alibaba close on a positive note. Meituan even gain over 4 percent. Alibaba (+0.1%) will present its quarterly figures later in the day.

Long-dated U.S. government debt yields ended mixed on Tuesday after data showed a bigger-than expected decline in U.S. retail sales and rise in industrial production for July. The yield on the 10-year Treasury note closed steady at 1.258% versus 1.255% at 3 p.m. Eastern on Monday.

Berenberg lowers target SMA Solar to EUR 55 (70) - Buy
DZ raises Varta to Buy (Hold) - Target EUR 145
Berenberg increases Stabilus target to EUR 83 (77) - Buy

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