General Electric (+4,5%) has entered into an agreement to acquire BK Medical, a leader in advanced surgical visualization, from Altaris Capital Partners for a cash purchase price of $1.45 billion. The move will boost GE's ultrasound business, which had $3B in 2019 revenue, but it is also a sign that GE is comfortable with its balance sheet amid years of restructuring. GE boosted its full-year cash flow projections in July and expects the sale of its jet leasing business to close before year-end, bringing in $24B in cash. That deal will let GE cut its debt by $70B over the last three years since CEO Larry Culp joined the company. BK Medical is an innovator in global intraoperative imaging and surgical navigation, used to guide clinicians during minimally invasive and robotic surgeries and to visualize deep tissue during procedures in neuro and abdominal surgery, and in ultrasound urology. BK Medical is headquartered in Boston and Copenhagen with more than 650 employees and is delivering double-digit revenue growth. The parties expect the transaction to close in 2022, subject to review by the relevant regulatory authorities.

The Swiss stock market continued to recover on Thursday. The Swiss National Bank (SNB) confirmed its monetary policy as expected and at the same time lowered its growth forecast for 2021, but raised its inflation projection slightly. The SNB described the franc as "highly valued" and said it was ready to intervene in the foreign exchange market if necessary. The SMI gained 0.9 per cent to 11,939 points. Among the 20 SMI stocks, there were 19 gainers and one loser. 28.65 (previously: 32.22) million shares were traded. Bank shares were sought after across Europe after bond yields rose somewhat. In the SMI, Credit Suisse rose by 1.9 per cent and UBS by 1.3 per cent. However, Richemont was the strongest performer in the SMI, advancing 3.4 per cent. Swatch, which has not been in the index since Monday, gained 1.2 per cent. Interest rate-sensitive technology stocks such as SMI newcomer Logitech (+2.6 per cent) and AMS (+3.6 per cent) also saw brisk demand.

European markets gained as investors stayed upbeat after the latest U.S. Federal Reserve decision, with automotive and technology stocks among the biggest risers. The Stoxx Europe 600 index gained 0.9% to 467.5 points. In Paris, the CAC 40 and the SBF 120 gained 1% each. In Frankfurt, the DAX 40 gained 0.9%, while the FTSE 100 in London gave up less than 0.1%. The Bank of England (BOE) on Thursday began to prepare investors for an upcoming tightening of its monetary policy. Valneva gained 5.7% as the market welcomed confirmation of the timetable for the Phase 3 trial evaluating its Covid-19 vaccine candidate and continued discussions with the European Commission on a potential contract. Trigano (+9.8%) saw its sales rise by 4.9% in the fourth quarter of its 2020-2021 financial year compared to the corresponding period of the previous financial year, which benefited from a strong recovery following the end of the confinements in Europe. Faurecia gained 6.7% as the market put into perspective an earnings warning issued by the group that had been anticipated by investors, according to one analyst. The equipment maker adjusted its outlook for 2021 following IHS Markit's revision of its forecast for global auto production. The company now expects 2021 sales of around €15.5bn, compared with a previous forecast of at least €16.5bn. Faurecia expects an operating margin of between 6% and 6.2% of sales, compared with a previous forecast of around 7%.

The Dow Jones Industrial Average broke out of its September slump with its biggest two-day rally in more than six months, lifted by investors’ growing confidence the economy can withstand the end of pandemic stimulus measures and troubles in Chinese property markets. Bank stocks and shares of energy companies surged. Investors had expected a rebound from the downward drift that had carried the S&P 500 lower for much of the month. After a steep decline fueled by worries about the collapse of property giant China Evergrande Group that began the week, shares stabilized, then began climbing Wednesday even before the Federal Reserve signaled the economy had made enough progress for the central bank to begin reducing pandemic stimulus measures soon. The blue-chip index added 506.50 points, or 1.5%, to 34764.82 in its largest one-day surge since July. The S&P 500 gained 53.34 points, or 1.2%, to end at 4448.98, while the Nasdaq Composite Index added 155.40, or 1%, to 15052.24 points. All three indexes are now higher on the week. Among the biggest gainers in the Dow industrials: shares of Salesforce.com Inc. added $18.69, or 7.2%, to $277.86 after the California-based business software provider boosted its full-year sales forecasts and said the pandemic continues to drive spending on cloud services. Energy shares climbed with the price of oil, rising 3.4% to lead gains among the S&P 500’s 11 sectors. Financial shares also rose, adding 2.5%. Shares of JPMorgan Chase & Co. rose $5.27, or 3.4%, to $161.18 while American Express Co. gained $5.87, or 3.5%, to $173.36. U.S. markets closed with no word on whether Evergrande would make $83.5 million in debt payments by a Thursday deadline. Chinese authorities are asking local governments to prepare for Evergrande to potentially fail signaling Beijing’s reluctance to bail it out. Investors are also tracking negotiations in Washington over President Biden’s $3.5 trillion spending proposal. Companies are concerned that higher taxes, which might be used to finance the package, will hurt cash flows and their ability to return cash to shareholders. Democratic lawmakers are having trouble reaching a consensus because of sharp intraparty differences.

The Hong Kong stock exchange is unchanged after initial gains. The Shanghai Composite is down 0.1 per cent. Volatility in the China Evergrande share remains high. After gaining up to 30 per cent on Thursday, it is now down 7.1 per cent. In Tokyo, shares are up 2.0 per cent after the holiday on Thursday. Stocks from the shipbuilding and steel sectors are in demand. Shares in Nippon Stell climbed 3.7 per cent and Nippon Yusen improved 7.4 per cent.

U.S. Treasury yields posted their biggest rise in months on Thursday, with the 10-year breaking up through 1.408% and the 2-year extending its climb since Wednesday’s Federal Reserve policy update. Rising U.S. stock indexes in the past two days, coupled with a flattening Treasury yield curve on Wednesday, suggest that many investors remain skeptical that the central bank will be able to deliver as many interest rate hikes as it thinks it can in coming years. That sentiment is lending itself to a more risk-on trading environment that includes a selloff in government debt.

Berenberg raises target Rolls-Royce to 160 (150) p - Buy
Citi increases Bawag goal to 65 (54) EUR - Buy
Berenberg lowers Kone target to EUR 74 (76) - Buy

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