Netflix Inc. said it chose Microsoft Corp. to help launch a low-cost, advertising-supported streaming plan, a surprise move that gives a major boost to the tech giant’s growing ad business. Netflix said in April that it was looking to give consumers an ad-supported option to help boost subscription growth and generate a new stream of revenue. In the March quarter the company posted its first loss of subscribers in more than a decade. Seeking a partner was critical for Netflix to enter the ad business quickly. Microsoft will supply technology to facilitate the placement of video ads on Netflix. All ads served on Netflix will be available exclusively through Microsoft’s platforms. “Microsoft has the proven ability to support all our advertising needs,” Netflix Chief Operating Officer Greg Peters said in a statement. “More importantly, Microsoft offered the flexibility to innovate over time on both the technology and sales side.” Netflix’s selection of Microsoft is a high-profile endorsement of the tech company’s ad business, which has grown under Chief Executive Satya Nadella. The company acquired digital ad business Xandr from AT&T Inc. in 2021 and earlier purchased LinkedIn.

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The Swiss stock market posted significant losses on Wednesday after inflation data from the US dashed hopes of an imminent slowdown in inflation. However, the US stock markets quickly made up much of their losses after a weaker opening, and in the slipstream of Wall Street the SMI also recovered from its low for the day. At the end of trading, the Swiss benchmark index was still 1.5 per cent lower at 10,905 points. Among the 20 SMI stocks, there were 18 price losers and two price winners. 36.4 (previously: 26.35) million shares were traded. At the top of the selling lists were shares of banks, which were weighed down by concerns about the economy. Credit Suisse fell by 3.8 per cent and UBS by 3.1 per cent. There was no support from market interest rates; they hardly rose despite increased expectations of interest rate hikes. In addition, JP Morgan and Morgan Stanley will be the first major US banks to present their second quarter results on Thursday. For many investors, this may also have been a reason for caution. Shares of cyclical companies fell sharply. ABB fell by 1.4 per cent and Sika by 2.6 per cent.

The European stock markets fell on Wednesday in the wake of higher-than-expected inflation in the United States, which points to a rapid tightening of monetary policy by the Federal Reserve (Fed) and makes investors fear that the US economy is entering a recession. At the close, the Stoxx Europe 600 index lost 1% to 412.8 points. In Paris, the CAC 40 and the SBF 120 each lost 0.7%. In Frankfurt, the DAX 40 gave up 1.2% and the FTSE 100 in London was down 0.7%. The euro traded close to parity against the dollar for the first time since 2002. Many investors are gloomy about the outlook for the eurozone as the war in Ukraine threatens the continent's supplies of natural gas, a vital fuel for heating and power generation. Power generation at EDF SA’s French nuclear reactors fell sharply in June, exacerbating the squeeze facing Europe as Russia throttles the flow of natural gas to the continent. EDF reported a 27% drop in output from its French reactor fleet in June compared with the same period last year, as the world’s largest owner of nuclear-power plants grappled with unexpected corrosion on the cooling systems of its nuclear reactors.

Stocks fell Wednesday after data showed inflation reached a new four-decade high last month, bolstering expectations that the Federal Reserve will continue aggressively tightening monetary policy. Major indexes wavered during the session but ended lower, delivering a fourth consecutive daily decline for the S&P 500. The broad U.S. stock index dropped 17.02 points, or 0.4%, to 3801.78. The Dow Jones Industrial Average declined 208.54 points, or 0.7%, to 30772.79. The tech-heavy Nasdaq Composite lost 17.15 points, or 0.2%, to 11247.58. Stock futures turned negative after the data showed that consumer-price inflation accelerated to 9.1% in June. That marked an increase from the 8.6% recorded in May and was a faster rate of inflation than economists had expected. The fastest pace of consumer-price growth in four decades has upended financial markets this year by pushing the Fed to raise interest rates at a rapid clip. The end of the central bank's pandemic-era stimulus policies has dragged on the stock market, boosted yields on government and corporate bonds and sent the dollar higher. More recently, the Fed's drive to tighten monetary policy has raised concerns of a looming recession. Most sectors of the S&P 500 fell Wednesday, though the consumer discretionary group advanced and the consumer staples segment ended slightly higher. Among individual stocks, Delta Air Lines shares dropped $1.39, or 4.5%, to $29.70 after the company said strong demand helped it turn a profit during the second quarter, though expenses also climbed. Shares of Unity Software fell $6.94, or 17%, to $32.82 after the company agreed to buy app company ironSource, which rose $1.05, or 47%, to $3.28. Industrial supplier Fastenal said there were signs that demand is starting to soften, sending its shares down $3.22, or 6.4%, to $46.77.

The stock markets in East Asia followed Wall Street's lead on Thursday and coped well with the higher-than-feared surge in inflation in the USA in June. On the Asian stock exchanges, some of the potential for an interest rate hike has already been priced in. After moderate losses at the start, the indices were mostly up. In Tokyo, they rose by 0.7 per cent to 26,667 points, while the gains on the Chinese stock exchanges, in South Korea and in Australia were smaller.

In bond markets, the yield on the benchmark 10-year U.S. Treasury note declined to 2.904% from 2.958% Tuesday. Yields fall as bond prices rise.

UBS lowers Heidelcement target to EUR 76 (87) – Buy

CS raises Munich Re target to EUR 240 (238) – Underperform

Citi raises Hannover Re to Buy (Neutral) – Target EUR 162.40 (156.40)

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