American Express earned $2.27 a share in the third quarter on revenue of $10.9 billion, beating analysts’ estimates on both metrics, as cardholding spending jumped. Net income in the period was $1.83 billion vs. $1.07 billion a year earlier. The credit card giant was expected by analysts to report third-quarter earnings of $1.80 a share on revenue of $10.52 billion. Provisions for credit losses were a net of $191 million, compared with a provision expense of $665 million a year earlier. Cardholder spending jumped to a record high and was up 19% from the third quarter of 2019. Spending by Millennial and Gen-Z cardholders rose 38% from the third quarter of 2019. American Express earned $1.30 a share on revenue of $8.75 billion in the year-earlier period. The bank said it saw a “continued rebound in travel and entertainment spending, with restaurant spending notably resilient, growing above pre-pandemic levels” in the third quarter. “We’re operating from a position of strength, and we see more opportunity ahead to drive sustainable, long-term growth,” said Chairman and CEO Stephen Squeri.

The earnings season, which has gone well for the most part so far, supported the Swiss stock market on Friday. The SMI gained 0.1 per cent to 12,056 points. Among the 20 SMI stocks, there were 14 price gainers and six price losers. 23.18 (previously: 31.77) million shares were traded. Financial stocks proved to be beneficiaries of higher market interest rates. Credit Suisse rose 0.4 per cent and UBS 0.8 per cent. For technology companies, however, high interest rates are negative. Logitech fell 0.7 per cent and AMS 2.4 per cent in the wake of US industry stocks. Cyclicals such as ABB (+0.6 per cent) and Geberit (+0.6 per cent) again held up quite well. Sika posted a gain of 0.3 per cent. Holcim gained 0.3 per cent after the cement group acknowledged its social responsibility and set new goals in this regard for the years until 2030. Among other things, the company wants to get involved in the construction of affordable housing and the creation of infrastructure

European equity markets closed higher on Friday after another round of corporate earnings, while Wall Street lost ground, weighed down by technology stocks. The Stoxx Europe 600 index gained 0.5% to 471.9 points. In Paris, the CAC 40 and the SBF 120 gained 0.7% each, supported by several well-received quarterly publications. In Frankfurt, the DAX 40 gained 0.5%, while the FTSE 100 in London gained 0.2%. Renault SA on Friday said that revenue fell in the third quarter and expects further production losses, but confirmed guidance for its full-year operating margin. The French car maker’s quarterly revenue came in at 8.99 billion euros ($10.45 billion) down from EUR10.37 billion a year earlier. An analysts’ consensus forecast provided by FactSet had forecast the figure at EUR8.93 billion. In the quarter, Renault sold 599,027 vehicles world-wide, a 22.3% decrease on year due to production shutdowns and semiconductor shortages. L’Oreal’s shares rose on Friday after the company reported a strong beat in third-quarter sales across the board, suggesting operating leverage would more than compensate for cost inflation. The French cosmetics and consumer-products company’s quarterly sales were up 13.1% organically, compared to consensus expectations of 7.6%. The beat was driven by the active, professional and luxe divisions.

U.S. stocks were mixed but finished higher for a third consecutive week. The blue-chip Dow Jones Industrial Average edged up about 0.2% to a new record high. The S&P 500 index shed around 0.1%, and the technology-heavy Nasdaq Composite fell 0.8%. Stocks have risen in recent days after strong earnings results from some of the biggest U.S. corporations. Most S&P 500 companies that have reported earnings have beat analysts' expectations, and corporate profits are expected to jump around 35% in the latest quarter from the prior year, according to Refinitiv data. The latest financial results from companies like Tesla and Procter & Gamble showed that companies have been able to insulate themselves from the global supply-chain crisis and deliver strong results. Some companies have been passing down higher prices to customers. Federal Reserve Chairman Jerome Powell indicated he is now somewhat more concerned about higher inflation and said that the central bank would watch carefully for signs that households and businesses were expecting sustained price pressures to continue. “Supply-side constraints have gotten worse,” Mr. Powell said Friday at a virtual conference. “The risks are clearly now to longer and more-persistent bottlenecks, and thus to higher inflation.” Intel Corp. disappointed investors even as it posted stronger third-quarter earnings as component shortages weighed on computer shipments and China’s crackdown on computer gaming hurt server-chip sales. The world-wide chip shortage has caused car makers to idle plants and has led to higher prices on some electronics. Laptop makers have enjoyed strong demand for their devices, but have said shortages of some components have weighed on shipments, causing backlogs to swell.

Investors on the stock exchanges in East Asia and Australia are increasingly willing to take risks, after inflation fears and the tightening of the corona pandemic, especially in China, had initially caused restrained business. Corporate figures from the upcoming reporting season are also in the spotlight.

Long-dated U.S. treasury prices rose slightly in Asia, pushing down yields again and contributing to a further flattening of the yield curve, a pattern seen on Friday after Jerome Powell signaled the Fed is prepared to begin tapering its monthly asset purchases. He also warned that inflation is likely to remain elevated into 2022.

Citi rises Richemont target to 143 (132) CHF – Buy
CS rises Pernod Ricard target to 200 (192) EUR – Neutral
UBS rises L'Oreal target to 435 (425) EUR – Buy

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