U.S. Inflation eased slightly in April, the 10th straight month of cooling, but price gains remain historically high as the broader economy cools. The consumer-price index rose 4.9% in April from a year earlier, the Labor Department said Wednesday, down slightly from March’s 5% increase. The inflation reading has eased from a recent peak of 9.1% in June 2022. The Federal Reserve aggressively raised rates for more than a year to try to tame inflation by slowing economic activity. The Fed is looking to see signs of inflation declining toward its 2% target. Consumer prices rose a seasonally adjusted 0.4% in April from the prior month, versus a 0.1% gain in March. April’s increase was driven by housing costs and an uptick in gasoline prices. Used vehicle prices surged by 4.4% over the month due to lack of inventory, while new car prices declined modestly. Wednesday’s report could keep Fed officials on course to pause rate increases at their next meeting because they have shifted their focus away from lagging indicators of economic activity to assess the impact of recent bank failures on lending conditions and economic activity, which won’t immediately show up in broad measures of hiring and inflation. Fed officials raised their benchmark federal-funds rate last week to a range between 5% and 5.25%, the highest level in 16 years, to slow down the economy and combat inflation. Wednesday’s report showed that when removing volatile food and energy costs, prices rose 5.5% from a year earlier, a slightly slower increase than in March. Those so-called core prices remain elevated due to persistently strong shelter costs that economists expect to cool in the coming months. Housing price changes can take time to show up in inflation data due to the lag in mortgage and rental contracts. Economists see core prices as a better predictor of future inflation.

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Wednesday, the SMI lost 0.9 per cent to 11,447 points. Among the 20 SMI stocks, there were 13 price losers and seven price winners. 28.95 (previously: 31.08) million shares were traded. Investors parted with the heavyweights Nestle (-1.6%), Novartis (-1.6%) and Roche (-1.2%). In the negative environment, the Alcon share stood out with a price jump of 7.4 per cent - and this despite the dividend write-off amounting to 0.21 Swiss francs. The ophthalmology specialist had presented business figures for the first quarter the previous evening exceeding expectations. The outlook was also convincing. After the good performance, Alcon is now confident of reaching the upper end of the forecast corridor regarding annual earnings per share. The interim report of Lonza (+0.4%) was also received slightly favourably. Sonova shares, which had sold off on Tuesday, recovered by 2.6 per cent. Falling market interest rates, meanwhile, dented the share prices of banks and insurers. Credit Suisse and UBS slipped 1.1 and 1.0 per cent, respectively. Swiss Life, Swiss Re and Zurich suffered losses of 1.2 to 2.3 per cent.

European stock markets fell on Wednesday despite a decline in US inflation, which fell in April to its lowest level in two years. The Stoxx Europe 600 index closed down 0.4% at 463.6 points. In Paris, the CAC 40 and the SBF 120 each gave up 0.5%. The DAX 40 in Frankfurt lost 0.4% and the FTSE 100 in London dropped 0.3%. Siemens Healthineers slumped by 5.7 per cent among DAX companies. Although the company's core business performed well, margins and sales suffered from the slump in demand for Corona tests. In addition, the robot-assisted treatment of cardiovascular diseases is being halted due to lack of demand. Auto supplier Continental was up 3.1 per cent after figures. Eon was seen as generally unspectacular to slightly positive. Accordingly, the shares fell by 1.6 per cent. At Lanxess, the business figures were roughly within the expected range. The shares slid by 0.8 per cent. Brenntag (+1.7 per cent) also saw slightly positive data. Furthermore, there were very positive surprises from European companies: The French bank Credit Agricole delivered markedly better quarterly data and the share price jumped 5.0 per cent. Wind turbine manufacturer Vestas was praised for its return to profitability and went up 3.7 per cent. Alstom, meanwhile, had been expected to do better and sent its shares 2.4 per cent lower. Asos slumped a good 23 per cent on the London Stock Exchange after weak financials and a lowered outlook. The adjusted loss of 87.4 million pounds was clearly higher than anticipated, according to Liberum. The sales trend had also deteriorated. On the positive side, Evotec (+12.8%), through its subsidiary Just Biologics, entered into a long-term partnership with Sandoz for the immediate development and subsequent manufacture of several biosimilars.

U.S. stocks and bonds rose Wednesday after fresh data showed inflation cooled for the 10th consecutive month. The consumer-price index rose to 4.9% in April from a year ago, easing slightly from a 5% increase in March. It was up 0.4% for the month, in line with economists’ expectations. Stocks rose after the data was initially released, then wavered before closing back up near session highs. The S&P 500 added 0.4%, while the tech-heavy Nasdaq Composite rose 1%. The Dow Jones Industrial Average edged lower for much of the trading session and ended down 30.48 points, or 0.1%. Tech stocks, which have been especially sensitive to moves in the bond market, led the way in trading Wednesday. Shares of Alphabet and Advanced Micro Devices were some of the top gainers in the broad S&P 500, adding 4.1% and 2.1%, respectively. Amazon.com shares added around 3.4% and notched their seventh consecutive day of gains, the longest winning streak since July 2022. Airbnb shares dropped 11%, one of their largest one-day falls. The company reported earnings that showed higher profits for the first quarter, but customers reserved fewer-than-expected stays and the company gave a mixed outlook for the next quarter. Occidental Petroleum (-3.6%) earned less than analysts' forecasts in its first quarter and also had lower sales. At Roblox (+7.4%), a marked increase in net bookings fuelled the share price. Syneos Health (INC Research Holdings) was up 8.8 per cent. According to a media report, a consortium of Elliott Investment Management, Patient Square Capital and Veritas Capital are in talks to acquire the drug developer. CTI Biopharma has moved ahead: Swedish Orphan Biovitrum (Sobi) is taking over the biopharmaceutical company for 1.7 billion dollars at a high premium. The share price shot up by 85 per cent.

The stock markets in Asia displayed little momentum on Thursday. In Tokyo, the Nikkei 225 was almost unchanged at 29,128 points. Among individual stocks, quarterly reports continue to drive prices. The pharmaceutical company Kyowa Kirin has lowered its profit outlook for 2023, the share price falls by 11.9 per cent. Sumitomo Metal Mining (-11.7%) expects a 74 per cent drop in profits. Fujifilm Holdings (+4.5%), on the other hand, benefits from better-than-expected quarterly figures published by the broad-based technology company. Panasonic gained a good 3 per cent after the business figures, the oil stock Inpex 0.9 per cent.

Long-dated U.S. government debt yields slipped on Wednesday after April data showed the U.S. annual headline rate of inflation from the consumer price index dropped to its lowest level in two years. However, other parts of the CPI data revealed a persistence in inflation that analysts said makes it more likely that policy makers will leave borrowing costs elevated for longer. The 10-year Treasury note fell 8 basis points to 3.471%. The 2-year Treasury note declined by 11 basis points to 3.91%.

Fair Value Swisscom: DZ Bank lifts to CHF 540 (505) - Sell

Rating Idorsia: Baader Helvea lowers to Reduce (Add) - Target CHF 8.40 (13.50)

Target price Logitech: Kepler Cheuvreux upgrades to CHF 60 (53) - Hold

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