A souring market weighed on investing giant BlackRock Inc. (+6.7%) in the third quarter, pushing profit down 16%. The world’s largest asset manager reported net income of $1.41 billion, down from $1.68 billion in the same period a year earlier. Earnings amounted to $9.25 a share. That exceeded the $7.06 expected by analysts polled by FactSet. Revenue dipped 15% to $4.31 billion, above analysts’ estimates of $4.2 billion. BlackRock is a top provider of exchange-traded funds and other low-cost alternatives that track market indexes, and demand for passive investing has helped fuel the firm’s growth. BlackRock is also a large provider of actively managed investments, which include businesses like stock-and bond-picking funds. Investors’ faith in the market declined, evidenced by slowing inflows of $17 billion, down from $75 billion a year ago. The firm’s assets under management were about $8 trillion, down from $8.5 trillion in the second quarter. That marks the third quarter-over-quarter decline in a row. BlackRock ended last year with $10.01 trillion in assets, the first time any money manager surpassed that milestone. BlackRock’s base management fees—fees not tied to performance that the firm receives for administering fund holdings—dipped 10% from a year ago to $3.53 billion. Performance fees from the firm’s actively managed funds fell 76% to $82 million. BlackRock said that partly reflected lower fees from a single hedge fund. Its technology remains the asset manager’s bright spot. Revenue from Aladdin, its proprietary software that helps investors manage their portfolios and assess risk, rose 6% to $338 million.

The Switzerland stock market ended modestly higher on Thursday, recovering well after suffering a sharp setback around mid afternoon. The benchmark SMI ended with a gain of 28.58 points or 0.28% at 10,227.90. Credit Suisse climbed nearly 6.5%. UBS Group gained 3.5%, ABB surged 2.84%, Logitech advanced 2.6%, and Sonova gained 2.36%. Holcim and Partners Group moved up 2% and 1.9%, respectively. Swiss Life Holding gained 1.36%. Givaudan drifted down 1.77% and Nestle lost about 1.1%. Novartis and Lonza Group ended modestly lower. In the Mid Price Index, Zur Rose, AMS and Georg Fischer gained 3.3 to 4.3%. Bachem Holding, Adecco, Temenos Group, Swatch Group and Julius Baer gained 2 to 3%. The airline IAG had presented convincing business figures and thus lifted Europe-wide travel and leisure values. In addition, Zurich Airport had reported positive traffic figures. Passenger traffic in September reached 80 per cent of 2019, the last year before the corona pandemic. The shares gained 2.7 per cent, those of travel retailer Dufry 4.3 per cent. Swatch (+2.1%) benefited from a study on the Swiss watch industry. A clear majority of executives still assess the outlook for the sector in 2023 as positive, despite the threats of recession. At vacuum valve provider VAT (-3.2%), the quarterly figures and outlook did not go down well. Obseva (+8.6%) came up with positive news from a licence partner in China.

European stocks plunged sharply Thursday afternoon after data showing a bigger than expected increase in U.S. consumer price inflation raised concerns about more aggressive rate hikes by the Fed, but rebounded swiftly and ended the session with strong gains. The Stoxx Europe 600 index increased by 0.9% to 389.2 points. In Paris, the CAC 40 and SBF 120 rose 1% and 1.1%, respectively. The DAX 40 in Frankfurt added 1.5% while the FTSE 100 in London climbed 0.4%. TotalEnergies (+3.1%) announced the opening of wage negotiations on Thursday evening, despite the continuing strike in its refineries. Some cyclical stocks benefited from bargain hunting, such as Air France-KLM (+6%), Faurecia (+5.7%) and the catering group Elior (+8.6%). The environmental services group Derichebourg (+5%) won a six-year household waste collection contract on Reunion Island from a local authority representing 182,000 inhabitants. This contract represents a turnover of 52 million euros. The mining and metallurgy group Eramet lost 1%. Oddo BHF lowered its recommendation on the stock from "outperform" to "neutral" and reduced its target price from EUR 120 to EUR 80. Italian bank Monte dei Paschi di Siena (down 33.1% in Milan) plans to issue more than 1.25 billion shares as part of its €2.5 billion capital increase to support its recovery plan. A consortium of banks has agreed to underwrite the deal. Low-cost airline easyJet (+2.7%) announced that its pre-tax loss excluding exceptional items for the 2021-2022 financial year is expected to be between £170m and £190m (€194m to €217m) and that its turnover is expected to have more than doubled in the fourth quarter.

U.S. stocks closed sharply higher Thursday in a head-spinning reversal, after investors decided that fresh evidence of high inflation wasn’t as bad as it initially appeared. It was the first time that the Dow Jones Industrial Average both fell at least 500 points and rose at least 800 points in a single trading day, according to Dow Jones Market Data. The whipsaw moves were reminiscent of the early stages of the Covid-19 pandemic, another time of deep uncertainty about the economic outlook. The Dow ended the day up 827.87 points, or 2.8%, to 30038.72, its largest one-day percentage gain since November 2020. The S&P 500 rose 92.88 points, or 2.6%, to 3669.91. The tech-heavy Nasdaq Composite advanced 232.05 points, or 2.2%, to 10649.15. Stocks had tumbled in early trading after new data showed that inflation remains persistently high, strengthening expectations for continued large interest-rate increases from the Federal Reserve. Earlier Thursday, new data from the Labor Department showed that a reading of U.S. consumer inflation excluding volatile energy and food prices accelerated to a new four-decade high. The so-called core measure of the consumer-price index gained 6.6% in September from a year earlier, the biggest increase since August 1982. Along with the rest of the banking sector, JPMorgan (+5.3%), Citigroup (5.1%) and Wells Fargo (4.6%) rose sharply on the eve of their third quarter earnings releases. Facebook's Meta Platforms (+2.2%) went to court on Thursday to challenge the Federal Trade Commission's (FTC) decision to oppose its proposed acquisition of virtual reality startup Within. Comcast (+5.4%) posted its best performance in more than a year and a half after Citigroup raised its recommendation to "buy" from "neutral". Netflix (+5.6%) announced on Thursday that its new ad-supported subscription service would launch in early November at a monthly rate of $6.99 in the US, $1 less than the comparable service about to be offered by Disney's Disney+.

In Asia, major indexes broadly closed with gains, with Japan’s Nikkei 225 up 3.5% to 27,157 points. In South Korea (+2.6%) internet and energy stocks are sought after, in Hong Kong (+3.5%) financial and real estate stocks. In Hong Kong, as in Shanghai (+1.6%), the focus is on Chinese inflation data, which came in relatively moderate at 2.8 per cent, even though it reached a 29-month high. In Taiwan, Taiwan Semiconductor Manufacturing added 3.9 per cent. Taiwan Semi posted a record profit, earning 80 per cent more than the previous year.

A wild day of bond-market swings left U.S. Treasury yields higher Thursday, reflecting investors’ bets that the latest hot inflation report would push the Federal Reserve to raise interest rates more than previously anticipated. The 2-year Treasury note was yielding 4.478%, up 19 basis points while the 10-year Treasury note rose 6 basis points to 3.964%.

UBS raises Bossard target to CHF 161 (159) - Sell
CS lowers target Swiss Re to CHF 87 (91) - Outperform
Bryan Garnier cuts Givaudan target to CHF 4,150 (4,380) - Buy

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