GlobalFoundries Inc. and STMicroelectronics NV, two of the world's largest chip makers, said they would team up to build a semiconductor factory in France, leaning on government subsidies in what has become a global race to strengthen control over technological supplies. The factory in Crolles in southeastern France would be jointly operated by the two chip makers and receive what they described as major financial support from the French government. The three parties plan to invest a total of more than $5.7 billion in the plant, which they said should open by 2026 and create more than 1,000 jobs. They didn't detail how the investment would be divided. Both chip makers and the French government said Monday that a goal was to support the European Union's ambition of becoming less dependent on other countries for important technologies. The expanding footprint of New York-based GlobalFoundries would help provide its customers with supply-chain security, said Chief Executive Thomas Caulfield, adding that it would have been a challenge to do the project without French governmental support.

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Swiss shares held up well on Monday. The recent Corona wave in China and fears of further supply bottlenecks weighed on sentiment, as did concerns about gas supplies in Europe. The SMI gained 0.1 per cent to 11,027 points. Among the 20 SMI stocks, there were 14 price losers and five price winners, one share closed unchanged. 23.84 (previously: 32.36) million shares were traded. In the SMI, shares of cyclical companies and banks were sold. ABB lost 1.9 per cent, additionally weighed down by the downgrade to "Neutral" by Citi. Credit Suisse and UBS fell by 2.5 and 1 per cent respectively. Doubts about the important China business pushed Richemont's share price down by 1 per cent. Partners Group fell 1.5 per cent. The company has invested 500 million dollars in Budderfly, a provider of energy-as-a-service. On the other hand, stocks considered defensive, such as Nestle (+0.5 per cent) and Givaudan (+1.9 per cent), were in demand. In the pharmaceutical sector, Novartis and Roche gained 0.3 and 1.4 per cent respectively.

European equities started the week on a negative note, as new health restrictions in China and Russian gas supplies to Europe prompted caution. The cautiousness is also driven by the release of new inflation data in the coming days and the opening of the quarterly earnings season in the US this week. At the close, the Stoxx Europe 600 index lost 0.5% to 415.02 points. In Paris, the CAC 40 and the SBF 120 lost 0.6% and 0.7% respectively. In Frankfurt, the DAX 40 was down 1.4%, and the FTSE 100 in London ended flat. China placed a large order on behalf of three of its biggest airlines for close to 300 jets from Airbus SE, the first major commitment from the country to new planes since before the pandemic. China’s re-emergence in the market for new commercial aircraft has been one of the most widely anticipated in the industry. The country, which typically purchases planes on behalf of its airlines, was one of the biggest and most important buyers of jets before the pandemic. Boeing Co. has repeatedly cited China as critical to its own production growth plans. Siemens AG said Thursday it could see a non-cash impairment of about EUR2.8 billion ($2.92 billion) on its investment in Siemens Energy AG . Siemens AG said that, with the closing share price of Siemens Energy on Germany’s Xetra, the market value of Siemens AG’s 35% investment in Siemens Energy is significantly below the book value. Siemens Energy shares Thursday closed at EUR13.99, down about 4.3%.

U.S. stocks fell to start the week as investors prepared for fresh inflation data and corporate earnings that could influence the Federal Reserve's path for interest-rate increases. All three major indexes opened lower, regained some ground and then lost steam into the close. The S&P 500 fell 44.95 points, or 1.2%, to 3854.43. The blue-chip Dow Jones Industrial Average lost 164.31 points, or 0.5%, to finish at 31173.84. The Nasdaq Composite Index shed 262.71, or 2.3%, to 11372.60 as technology stocks lost ground. Stocks had lately staged a recovery, with the S&P 500 rising nearly 2% last week. The rally cooled on Friday after a stronger-than-expected jobs report showed the labor market is still hot, raising the probability that the Federal Reserve could continue with aggressive interest rate increases and potentially cause a recession. The next key data release, the U.S. consumer-price index for June, is on Wednesday. Investors also are awaiting corporate earnings reports for indications of how much higher prices and weaker consumer sentiment have eroded companies' profits. Americans expect lower inflation increases over the longer run, a new Federal Reserve Bank of New York report said. Major financial firms including JPMorgan Chase and Morgan Stanley are scheduled to report earnings on Thursday, followed by BlackRock, Citigroup and Wells Fargo on Friday. The KBW Nasdaq Bank Index fell about 0.9% on Monday. Many household-name firms are also set to post earnings this week, including PepsiCo on Tuesday and Delta Air Lines on Wednesday. Twitter slid $4.16, or 11%, to $32.65. Elon Musk filed a statement on Friday evening saying he was terminating his $44 billion bid for the social-media company and that Twitter had violated the merger agreement. Twitter also put out a statement indicating it would sue Mr. Musk.

The East Asian stock markets fell across the board on Tuesday. The Nikkei index in Tokyo lost 1.9 per cent to 26,307 points, after a runaway upward move the previous day in reaction to the outcome of the upper house election, which was seen as favourable by the stock market. It had strengthened the ruling coalition. The Chinese and Seoul stock exchanges both fell by around 1 per cent. In China, Beijing's strict zero-covid policy continues to dampen sentiment after new outbreaks of infection were recently reported, which were immediately responded to with regional lockdowns.

Bond markets continued to flash a warning sign. The U.S. yield curve remained inverted, with yields on shorter-dated bonds above those of longer-dated debt. The yield on the benchmark 10-year Treasury note edged down to 2.990% from 3.098% on Friday. The two-year Treasury yield dipped to 3.068%. Yields fall when prices rise.

Citi downgrades ABB to Neutral (Buy)

UBS raises Telefonica Dtld. target to EUR 2.65 (2.60) – Neutral

UBS raises Roche to Neutral (Sell) – Target CHF 328 (345)

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