Deutsche Telekom AG is speeding up its efforts to retake a majority stake in T-Mobile US Inc. through a complex transaction with SoftBank Group Corp. On Tuesday, Deutsche Telekom and SoftBank announced a share-swap deal in which the Japanese investment firm will become the German telecom giant’s second-largest private shareholder, while Deutsche will increase its stake in T-Mobile US. Deutsche Telekom currently holds a roughly 43% stake in T-Mobile US and already controls a majority of its voting shares. With this deal, Deutsche Telekom is exercising the right to buy 45 million—a bit less than half—of those shares, at a 13% discount to T-Mobile’s closing stock price on Sept. 3. In exchange, SoftBank is getting 225 million new Deutsche Telekom shares, valued at around $5 billion—a 12% premium over the stock’s closing price on the same day. Deutsche Telekom shares were up 0.1 percent in Frankfurt, compared with more than 2 percent in the morning. Softbank Group rose another 6 percent in Tokyo following the previous day's 10 percent surge. Also Tuesday, Deutsche Telekom said it had agreed to sell its stake in its T-Mobile Netherlands unit and is planning to use up to $2.4 billion of the proceeds to purchase 20 million more T-Mobile US shares from SoftBank.

On Tuesday, gains have been pocketed after the premiums at the beginning of the week on the Swiss stock market. The SMI shed 0.7 percent to 12,344 points. Among the 20 SMI stocks, there were 15 price losers and five price winners. A total of 25.19 (previously: 20.56) million shares were traded. The weakest SMI stock was again Holcim, this time with a discount of 3.1 percent. The cement manufacturer is facing heavy fines in France because of its Syria business. The French Supreme Court overturned an earlier decision against merger partner Lafarge and confirmed the investigations for terrorist financing. Partners Group's business figures provided little movement. According to Citigroup, the asset manager had once again presented good results. Jefferies also praised the figures. The share closed almost unchanged. The positive data from China gave Richemont (+2.4%) and Swatch (+3%) tailwind. For both luxury goods groups, the Chinese market is of key importance. Adecco fell 0.5% after an acquisition in France. Jefferies analysts saw the acquisition boosting earnings per share by less than 1 percent. Swiss Re held steady, outperforming the overall market. Competitor Munich Re expects higher prices for reinsurance services. Among small caps, Relief Therapeutics lost 8.8 percent. There is a dispute between the biotechnology company and US partner NRx, Relief distanced itself from statements of the partner.

European stocks were slightly lower Tuesday. The Stoxx Europe 600 index gave up 0.5% to 472.9 points. In Paris, the CAC 40 and SBF 120 lost 0.3% and 0.2%, respectively. In Frankfurt, the DAX was down 0.6%. In London, the FTSE 100 dropped 0.5%. Cautious trading is expected to continue, however, as investors look ahead to this week's meeting of the European Central Bank, which is expected to debate when to withdraw bond purchases and other stimulus measures. "Data have been broadly in line with expectations, except for stronger inflation, and there is room for the ECB to spin a positive outlook in order to prepare markets for the inevitable tapering next year, a point clearly made by some hawkish ECB policymakers," said economists at Societe Generale led by Michel Martinez. "Financing conditions are not tightening. Inflation forecasts are rising, both near term and medium term. As such, not reducing the pace of PEPP purchases, at least somewhat, would raise questions about the credibility of the ECB reaction function, and potentially undermine the power of the new rates guidance in the process," said economists at Deutsche Bank led by Mark Wall. House-builders fell in London after downbeat industry data. The Halifax house-price index showed the annual rate of house-price inflation continuing to slow, hitting a five-month low of 7.1% in August versus 7.6% in July. Berkeley Group, Taylor Wimpey and Persimmon all fell. "Much of the impact from the stamp-duty holiday has now left the market, as highlighted by the drop in industry transaction numbers compared to a year ago," Halifax managing director Russell Galley said. Shares in DS Smith rose 1.6% after the packaging company reported higher first-quarter volumes, although it said costs were still rising. The update was reassuring, showing demand momentum continuing, Citigroup pointed out.

U.S. stocks fell with the S&P 500 in the red Tuesday as investors worried that the spread of Covid-19 will weigh on economic growth. Emerging evidence suggests the U.S. economy is losing steam as the summer winds down, with consumers pulling back, employers easing up on hiring and businesses adapting to changing health requirements. The broad S&P 500 index fell 15.40 points, or 0.3%, to 4520.03. The Dow Jones Industrial Average retreated 269.09 points, or 0.8%, to 35100.00. The tech-heavy Nasdaq Composite added 10.81 points, or 0.1%, to 15374.33, a record close. Data on Tuesday showed that China’s exports unexpectedly jumped in August. Economists had been bracing for a slowdown in shipments after an outbreak of Covid-19 cases closed coastal ports and created new bottlenecks for shippers during the peak late-summer season. Some of the biggest U.S. stocks defied the broader market decline: Apple shares gained 1.5%, Amazon.com shares rose 0.9% and Facebook shares advanced 1.6%. “Right now people are sort of going back to growth and durable secular growth that isn’t necessarily reliant on the economic cycle,” said Nick Frelinghuysen, an equities portfolio manager at Chilton Trust. Among individual stocks, Match Group rose $11.17, or 7.5%, to $159.36 after S&P Dow Jones Indices said the online-dating company would be included in the S&P 500 index. BioMarin Pharmaceutical shares dropped $7.14, or 8.4%, to $77.81. The Food and Drug Administration put a hold on one of its gene-therapy studies. Shares of AMC Entertainment Holdings gained $3.81, or 8.7%, to $47.83 after the movie-theater company said Labor Day weekend was the first weekend with higher attendance than the same weekend pre-pandemic.

The East Asian stock markets were mixed with mostly moderate fluctuations on Wednesday. In Tokyo, the Nikkei index continues to rise after the firm previous days, but only by 0.4 per cent to 30,023 points. Hong Kong and Seoul are the most active markets, falling by up to 0.8 per cent. In Shanghai, the market barometer held its ground at the half-year high reached the previous day after strong trade data for August sent a positive economic signal. Pressure on financial technology stocks in South Korea comes from regulators' allegations that retail investor protection is not up to scratch on some platforms. Kakao and Naver lost 9.7 and 7.7 per cent respectively.

Treasury yields rose broadly Tuesday, pushing the 10-year Treasury rate to a nearly two-month high as U.S. investors returned from the Labor Day holiday, which saw markets closed on Monday. The yield on the benchmark 10-Year U.S. Treasury note ticked up to 1.370%, from 1.322% on Friday.

Dt. Bank increases Legrand target to EUR 105 (102) - Buy
Jefferies raises Roche target to CHF 415 (400) - Buy
Berenberg lifts Geberit target to CHF 723 (710) - Hold

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