Intel Corp. (+0.3%) has struck an unusual $30 billion funding partnership with Brookfield Asset Management Inc. to help finance its massive factory expansion ambitions, signaling some big investors are upbeat about the long-term demand for semiconductors. The agreement with the publicly traded Canadian asset-management firm is the first of what could be a series of such arrangements Intel pursues to underpin Chief Executive Pat Gelsinger's push to make the company a leading contract chip maker and regain its manufacturing advantage over competitors in Taiwan and South Korea. Under the deal, which company executives described as a first of its kind for the industry, Intel would fund 51% of the cost of building new chip-making facilities in Chandler, Ariz., and will have a controlling stake in the financing vehicle that would own the new factories, Intel Chief Financial Officer David Zinsner said. Brookfield will own the remainder of the equity and the companies will split the revenue that comes out of the factories, he added. Scott Peak, a managing partner in Brookfield's infrastructure group, said such deals are common in industries including energy and telecommunications and are now trickling into the chip business because of its growing capital needs. Brookfield, which has more than $750 billion in assets under management, sees the Intel deal as a good fit with the company's experience in large and complex deals, he said. Mr. Geslinger and other industry officials have said they expect annual semiconductor sales to roughly double by the end of the decade - topping $1 trillion - even if short-term demand softness is weighing on chip-industry earnings. Intel last year announced the construction of two new factories in Arizona, where it already makes chips, calling it a $20 billion expansion. But Mr. Zinsner said the figure was an early estimate and inflation had since added to the cost. Intel also has said it could spend as much as $100 billion each on new plant complexes in Ohio and Germany.

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On Tuesday, the SMI lost 1.4 per cent to 10,933 points. Among the 20 SMI stocks, there were 17 price losers and three price winners. 26.02 (previously: 29.34) million shares were traded. The SMI was weighed down by heavyweight Nestle (-1.8%), among others. The shares of the pharmaceutical companies Novartis and Roche suffered from losses of 2.0 and 2.2 per cent. Swisscom lost 0.7 per cent. Givaudan fell by 2.3 per cent. However, some cyclicals were also unable to escape the sell-off. Geberit, Holcim and Sika slipped between 1.2 and 1.7 per cent. The shares of Credit Suisse, which had sold off the previous day, were in demand (+2.4%). UBS gave up initial gains in late trading and closed marginally up. Investors acted more cautiously regarding the shares of insurers, also beneficiaries of higher interest rates: Swiss Life, Swiss Re and Zurich declined by up to 0.7 per cent. Shares of eye care specialist Alcon finished higher after the company announced the acquisition of Aerie Pharmaceuticals in the USA for 770 million dollars. The rating agency S&P confirmed that Alcon has the necessary financial flexibility to handle the acquisition. The shares of the online pharmacy Zur Rose (-6.7%) continued to lose value. Critical media reports on the long-awaited e-prescription in Germany had already weighed on Monday.

European stocks were mostly down on Tuesday as the latest batch of economic data pointed to a sharp slowdown and as fears persist over additional sharp interest-rate increases by major central banks. A sharp rise in natural-gas prices across Europe, driven by Russia and its war in Ukraine, has raised concerns that the continent will fall into a steep recession this winter. New surveys released Tuesday showed that business activity in Europe fell in August pointing to a sharp slowdown in global economic growth as higher prices weaken consumer demand and the war in Ukraine scrambles supply chains. The PMI for Germany pointed to the sharpest decline in business activity since June 2020, while the measure for France pointed to the first decline in activity since the first wave of the Covid-19 pandemic. At the close, the Stoxx Europe 600 index lost 0.4% to 431.4 points. In Paris, the CAC 40 and the SBF 120 each gave up 0.3%. The DAX 40 in Frankfurt was also down 0.3%, while the FTSE 100 in London was down 0.6%. Oil and gas stocks are benefiting from the rise in oil prices. In Paris, CGG gained 6.4%, Vallourec added 6.3%, Technip Energies increased by 4.5%, and TotalEnergies advanced 3.2%. In Milan, Eni gained 4.5% and Saipem rose 10.7%. In Amsterdam, Fugro gained 7.6%, while in Madrid, Repsol rose 3.8%. In London, Shell added 3.3% and BP rose 2.3%. Mining stocks also benefited from the rise in metal prices. Eramet and Aperam increased by 2.8% and 4.6% respectively and ArcelorMittal rose 3%. French energy producer TotalEnergies (+3.2%) and SSE Renewables, the renewable energy subsidiary of the British group SSE (-0.9%), announced on Tuesday the start of electricity production at the Seagreen offshore wind farm, located 27 kilometres off the coast of Angus in Scotland. Ryanair (+2%) on Tuesday raised its annual target for the number of passengers carried. British Airways decided to cancel more than 10,000 flights, or 8% of its capacity, over the same period. The share price of IAG, the parent company of British Airways, fell by 0.5% in London.

U.S. stocks edged lower Tuesday in a quiet trading session as investors weighed uncertainty over the path of interest-rate increases. It was a third consecutive day of declines for major indexes as the market’s summer rally shows signs of stalling. The S&P 500 fell 9.26 points, or 0.2%, to 4128.73, down 3.6% over the past three trading days. The Dow Jones Industrial Average dropped 154.02 points, or 0.5%, to 32909.59. The tech-heavy Nasdaq Composite slipped 0.27 point, or less than 0.1%, to 12381.30. All eyes will be on a speech Friday by Fed Chairman Jerome Powell in Jackson Hole, Wyo. Mr. Powell is expected to provide clues on the Fed’s plans for combating inflation that remains well above the central bank’s target. Data earlier this month showed that annual U.S. inflation fell slightly from a four-decade high. The consumer-price index rose 8.5% in July from a year earlier, down from 9.1% in June. Retailers Macy’s and Dick’s Sporting Goods both topped Wall Street expectations for the second quarter, sending their shares up 3.8% and 0.7%, respectively. Shares of Palo Alto Networks climbed $61.46, or 12%, to $569.51 after the network security technology company reported better-than-expected revenue and showed a profit. The composite purchasing managers index for the U.S. economy, which measures manufacturing and services activity, fell to 45.0 in August, the second consecutive month of decline and the lowest reading since May 2020. Readings below 50 indicate a contraction. Among individual stocks, Twitter shares fell $3.15, or 7.3%, to $39.86 after the company’s former head of security filed a whistleblower complaint accusing it of failing to protect sensitive user data.

Stocks in Asia mostly fell, with Japan’s Nikkei 225 down 0.5% and the Hang Seng in Hong Kong down 1.3%. China’s Shanghai Composite slipped 1.4%. The real estate crisis in China is progressing, with Logan Group slumping 46 per cent after trading resumed. Full-year sales missed expectations and the company is considering restructuring to deal with its mounting debt. The Kospi in South Korea is up 0.2 per cent, supported by the energy and defence sectors.

U.S. Treasuries were mixed on Tuesday, with longer-term yields modestly higher and shorter-end maturities lower after U.S. economic data missed expectations and had investors adjusting their expectations for Federal Reserve interest rate hikes. The 10-year Treasury note fell by 4 basis points to 3.002%. The 2-year Treasury note contracted by 4 basis points to 3.298%.

Citi lowers Hapag-Lloyd to Sell (Neutral) - Target EUR 212 (420)

RBC cuts Evotec target to EUR 35 (43) - Outperform

Berenberg reduces Nfon target to EUR 15 (20) - Buy

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