The UBS banking group posted a pre-tax profit of nearly 1.5 billion dollars in the first three months of 2023, down by almost half (-45%) on an annual basis, despite capital inflows in all regions. In a press release issued on Tuesday, the giant on the verge of swallowing its eternal rival Credit Suisse (CS) explained this decline in particular by the creation of new reserves for legal disputes in the United States to the tune of 665 million and value adjustments for credit risk of 38 million. Excluding these effects, underlying pre-tax profit amounted to just over USD 2.35 billion, 22% lower than a year earlier. During the period under review, capital inflows in Wealth Management (GWM) totalled USD 28 billion, of which USD 7 billion was generated following the announcement of the CS acquisition. For the remainder of the year, UBS intends to focus its efforts on its forced merger with CS, which is expected to be completed by the end of the second quarter.

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The Swiss stock market ended Monday's trading little changed. The SMI gained 0.1 per cent to 11,467 points. Among the 20 SMI stocks, there were 14 price gainers and six price losers. 31.69 (previously: 48.04) million shares were traded. Credit Suisse had already presented its business figures on Monday. The ailing bank recorded further marked cash outflows in the first quarter. Net cash outflows totalled 61.2 billion Swiss francs in the January-March period, according to the financial institution, which is being taken over by rival UBS in a state-organised bailout. Investors had already withdrawn 110.5 billion Swiss francs in the fourth quarter of 2022. In the first quarter, Credit Suisse posted a net profit of 12.4 billion francs, up from a loss of 273 million a year earlier, and revenue growth to 18.5 from 4.4 billion francs. This was mainly due to the complete write-off of AT1 bonds ordered by the banking regulator Finma. The share price went up by 0.6 per cent, but higher gains during the trading session could not be maintained. UBS shares advanced 0.8 per cent. The takeover of Credit Suisse delayed the change in the position of the Chief Risk Officer. Among the pharmaceutical giants, Novartis gained 0.7 per cent, the share recorded a new high for the year at 89.92 francs. Roche shares, meanwhile, closed 0.1 per cent lower. The Nestle share (-1.4 per cent) traded ex-dividend. The food and beverage giant paid out 2.95 Swiss francs per share to stockholders.

European stock markets closed flat on Monday, with investors taking a wait-and-see attitude at the start of a week that will be marked by a number of corporate releases and several major economic indicators. The Stoxx Europe 600 index ended virtually unchanged at 469 points. In Paris, the CAC 40 and the SBF 120 also finished the session almost flat, as did the FTSE 100 in London. The DAX 40 in Frankfurt was down 0.1%. The IFO business climate index for Germany, published on Monday, reached 93.6 in April, compared with 93.2 in March. Orpea, the nursing home group (-11.2%), announced that its board of directors had decided not to follow up on a request from a group of shareholders to convene a general meeting. Channel Tunnel operator Getlink's shares gained 4.2%. Diversified conglomerate Bolloré (-3.7%) reported a 10% drop in first-quarter revenue to €4.43bn, hurt by a decline in transport and logistics activities. The media and entertainment group Vivendi (-1.2%) announced that it had recorded a growth in turnover in the first quarter and that International Media Invest (IMI), a subsidiary of the Czech holding company CMI founded by Daniel Kretinsky, had signed a promise to purchase 100% of Editis' capital. Philips (+13.8% in Amsterdam) published higher-than-expected results for the first quarter and indicated confidence in its outlook for 2023, despite the current economic uncertainties.

Stocks wobbled between small gains and losses in another quiet session Monday, while investors awaited a flood of corporate-earnings reports and further clarity on the path of interest rates. The S&P 500 rose 0.1%. The Dow Jones Industrial Average rose 66 points, or 0.2%. The Nasdaq Composite slipped 0.3%. Markets have turned quiet after last month’s abrupt collapse of Silicon Valley Bank spurred worries about the health of the financial system. The S&P 500 and Nasdaq Composite have moved by less than 1% for two weeks in a row. Wall Street’s fear gauge, the Cboe Volatility Index, has fallen as well. Investors are turning their focus this week to Big Tech earnings. Amazon.com, Microsoft, Google parent Alphabet, Facebook parent Meta Platforms and Intel are among the companies scheduled to report in the coming days.Coca-Cola shares edged 0.2% lower Monday, after reporting quarterly results that topped analyst estimates. Fox fell 2.9% after Fox News said Tucker Carlson is leaving the network. Walt Disney rose 0.1% after the network began a fresh round of layoffs. Bed Bath & Beyond shares fell 36% after the retailer filed for bankruptcy protection over the weekend. Some investors cited the impact of the banking upheaval on the real economy as a key question for markets. Moody’s Investors Service downgraded the credit ratings of 11 regional banks on Friday.

Asian indexes diverged for the Tuesday trading session. Again bucking the regional trend, the market in Japan is slightly firmer, with the Nikkei-225 rising 0.2 per cent. Nidec climbs 3.5 per cent after the company expects net profit for the financial year to be more than three times higher than last year. Mitsubishi Electric (+4.9 per cent) benefits from its plan to spin off its auto equipment division. The Shanghai stock exchange trades slightly lower, while the Hong Kong market registers marked losses of 1.6 per cent. Among the individual stocks, Meituan dropped 4.7 per cent and Xiaomi 3.7 per cent. In Korea, the Kospi recorded significant declines of 1.9 per cent, with the focus here also on the upcoming reporting season.

Long-dated U.S. government debt yields fell to their lowest levels in more than a week on Monday as a mild risk-off mood boosted demand for most government paper ahead of key U.S. economic data later in the week. However, yields on 1- and 2-month Treasury bills jumped as traders positioned for the possibility of two more rate hikes by the Federal Reserve in May and June. The 10-year Treasury note gave up 7 basis points to 3.506% while the 2-year Treasury note lost 6 basis points to 4.120%.

Target price Swissquote: Credit Suisse lifts to CHF 250 (200) - Outperform

Target price Glencore: JPMorgan lowers to GBP 6.10 (6.20) - Overweight

Target price Holcim: Barclays upgrades to CHF 62 (60) - Equal Weight

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