Pfizer Inc. and BioNTech SE said that a third dose of their Covid-19 vaccine neutralized the Omicron variant in lab tests but that the two-dose regimen was significantly less effective at blocking the virus. A third dose increased antibodies 25-fold compared with two doses against the Omicron variant, the companies said. Still, two doses may prove effective in preventing severe illness from Covid-19, they said, because immune cells are able to recognize 80% of parts of the spike protein that the vaccine targets. The results were issued in a press release by the companies, and weren’t peer reviewed and published in a scientific journal. The findings from the companies’ early study, and one by scientists in South Africa, suggest that three doses will be needed to produce a similar immune response against Omicron as was provided by just two doses in earlier strains of the virus.

While the Swiss stock market had lagged behind the European trend the day before, it marched ahead on Wednesday with new record highs. The SMI gained 0.7 per cent to 12,597 points - at 12,687.85 the leading index marked a new high. Subsequently, slight profit-taking set in. Among the 20 SMI stocks, there were ten price losers and ten price winners. 33.79 million shares were traded (previously: 37.49 million). The shares of the Nestle food group gained 1.6 per cent - here, too, investors took profits after the all-time high. The company had cut its stake in French consumer goods group L'Oreal from 23.3 to 20.1 per cent. This raised around 8.9 billion euros, which Nestle intends to use for share buybacks. In total, the buyback programme is expected to amount to around 20 billion francs by 2024. At Novartis, positive study results provided little support and the shares closed just in the red. In contrast, Roche's competitor shares rose by 1.3 per cent. After the shares of the US pharmaceutical manufacturer Moderna had risen strongly in the USA the previous day, Lonza followed with an increase of 1.6 per cent.

European stock indices ended in the red on Wednesday, with investors catching their breath, after a strong start to the week triggered by reassuring news that the Omicron variant of the virus responsible for Covid-19 is not dangerous. The Stoxx Europe 600 index lost 0.6% to 477.4 points. In Paris, the CAC 40 and the SBF 120 each lost 0.7%. In Frankfurt, the DAX 40 was down 0.8%, and the FTSE 100 in London was flat. Shares in TUI AG fell Wednesday after the company reported a narrowed net loss for fiscal 2021, which missed full-year market views, and warned over the potential effects of the new Covid-19 Omicron variant on bookings. The German travel operator, which achieved 69% of pre-Covid-19 levels in the current quarter, said the first quarter of 2022 is expected to be in the range of 60% and 80% of pre-pandemic levels in terms of bookings. The company also anticipates reaching normalized booking levels for summer 2022. However, these positive expectations could change due to the new Omicron Covid-19 variant, particularly for the winter season, it said. HelloFresh SE said late Tuesday that it expects to post 2022 earnings that are lower than currently expected, despite a consensus-beating revenue-growth outlook. The German meal-kit company said 2022 adjusted earnings before interest, taxes, depreciation and amortization would be between 500 million euros ($563.4 million) and EUR580 million, below brokers’ estimates provided by the company of EUR647 million. However, year-on-year revenue growth in 2022 is expected to be between 20% and 26% on a constant-currency basis, higher than brokers’ estimates of 18%, HelloFresh said.

U.S. stocks finished the day with strength as investors assessed the effects of the Omicron variant on the economy. The S&P 500 gained 0.3%, just shy of a closing record a day after the benchmark index posted its biggest one-day jump since March. The Dow Jones Industrial Average gained 0.1%, reversing earlier losses. The technology-focused Nasdaq Composite was ahead by 0.6%. Stocks have snapped back after swooning when the Omicron variant first emerged in late November. Investors have pointed to evidence that Omicron might cause less severe illness than previous variants, though scientists are still assessing its virulence and ability to evade vaccines. McDonald’s Corp. said Wednesday it would offer $250 million in low-interest loans to new franchisees over the next five years as a way to help increase diverse ownership of its U.S. restaurants. “We must challenge ourselves, even more, to invest in the future,” McDonald’s Chief Executive Officer Chris Kempczinski said. Blacks, Hispanics and Asians accounted for 29.6% of all U.S. franchisees as of the end of 2020, while women made up 28.9% of domestic owners, McDonald’s said. The company counted more than 2,400 U.S. restaurant owners as of the end of last year. McDonald’s recently has put more focus on racial inclusion among its employees, franchisees and suppliers. The company this year tied executives’ annual incentives to increasing the share of women and racial minorities in leadership roles by 2025. GameStop Corp. has been less volatile lately. Gone are the outsize moves of early 2021, when the stock seemed to escape gravity. Owing to individual investors who banded together in online forums to send the stock soaring, GameStop rocketed at one point in late January to an intraday high of $483, a gain of 2464% from the price at which it closed out 2020.

The stock exchanges in East Asia and Australia are partly firmer on Thursday. While Sydney and Tokyo are slightly in the red, the stock markets in China in particular are posting gains. South Korea is up half a percent. Mixed news comes from the Corona front. In Tokyo (-0.2%), airline stocks are on the upswing with expectations that Omikron will not result in further restrictions. ANA Holdings gains 0.9 percent and Japan Airlines 1.4 percent. In Hong Kong, the HSI rises 1.0 per cent. Traders observe increased risk appetite after the market closed little changed the previous day.

Long-dated yields for U.S. government debt edged higher still in Asia, after they posted their biggest three-day rise in weeks following the Pfizer/BioNTech Omicron report. Meanwhile, the 2-year yield, which is most closely associated with the near-term path of Fed policy, declined on Wednesday.

JP Morgan lowers Holcim target to CHF 53 (54) – Neutral
CS cuts Santander to Neutral (Outperform) – Target EUR 3.30 (3.60)
UBS lowers Covestro target to EUR 53 (61) – Neutral

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