Pirelli confirmed its targets for the year after posting revenue ahead of analysts' expectations for the first quarter. The Italian tire maker on Thursday reported 1.70 billion euros ($1.87 billion) in revenue for the three months to the end of March, up 11.7% on the year. Net profit climbed to EUR111.6 million from EUR107.5 million in last year's first quarter. Adjusted earnings before interest and taxes--a measure of profitability that is closely watched by analysts and investors--grew to EUR248.1 million from EUR228.5 million, generating an adjusted margin of 14.6%. Analysts had forecast revenue of EUR1.65 billion on adjusted earnings of EUR236 million and a 14.3% adjusted margin, according to a company-compiled consensus. For the year, Pirelli continues to expect revenue of roughly EUR6.6 billion to EUR6.8 billion, and an adjusted EBIT margin of more than 14% to roughly 14.5%.

Thursday, the SMI gained 0.7 per cent to 11,523 points. Among the 20 SMI stocks, there were 15 price gainers and five price losers. 36.94 (previously: 28.98) million shares were traded. The focus was on the balance sheet season. The first quarter figures of the insurer Swiss Life (-3.3%) were disappointing, even though they were in line with anticipation, according to analysts at Citigroup. However, their colleagues at UBS criticised the drop in fee income, which was a consequence of the decline in real estate transactions in Europe. The other two insurers within the SMI - Swiss Re and Zurich - held up better than the market with small gains of 0.5 and 0.1 per cent, but had fallen markedly the previous day. Alcon (+1.1%) again benefited from the strong business figures presented by the eye care specialist late on Tuesday. Lonza (+1.9%) was also sought after; here, too, there was follow-up buying after the previous day's figures. Index heavyweights Nestle (+0.5%), Novartis (+0.7%) and Roche (+0.8%) recovered from Wednesday's sell-off. Investors also bought Givaudan shares (+2.3%), which are considered defensive. Richemont surged 1.9 percent on the day before the release of figures for the 2022/23 financial year. Market participants were banking on the luxury goods group having benefited from the end of the pandemic restrictions in China.

European stock markets closed mixed on Thursday as investors remained cautious about the macroeconomic outlook despite slowing inflation. The Stoxx Europe 600 index ended flat at 463.6 points. In Paris, the CAC 40 and SBF 120 indexes gained 0.3 percent each. The DAX 40 in Frankfurt gave up 0.4% and the FTSE 100 in London dropped 0.1%. The Bank of England (BOE) announced on Thursday a further 25 basis point increase of its key rate to 4.5%. Boat manufacturer Bénéteau (+8.4%) raised its financial targets for 2023 after posting a 51% jump in sales in the first quarter. Commodity-related stocks fell in the wake of industrial metals prices, as the decline in Chinese producer prices last month raised fears of weakening demand. ArcelorMittal lost 2.7% in Paris. Rio Tinto and Antofagasta fell 2% and 4% respectively in London. German chemicals and pharmaceuticals group Bayer (down 7.5% in Frankfurt) warned that its 2023 results would be at the lower end of its previously reported guidance range and reported lower first-quarter results, mainly hurt by the glyphosate business and inflation. Industrial conglomerate Thyssenkrupp (-4.7% in Frankfurt) posted a net loss and a sharp decline in order intake in the second quarter of its 2022-2023 financial year, driven by high energy and commodity prices.

Shares in Walt Disney, Peloton Interactive and some regional banks weighed on stock indexes Thursday, offsetting gains among most Big Tech firms after the U.S. economy showed fresh signs of cooling. Weekly jobless claims ticked higher Thursday, while a Labor Department measure of producer prices notched its slowest rate of growth since January 2021, providing new evidence that inflation is slowing and the Federal Reserve may pause interest-rate hikes next month. Still, major stock indexes wavered for most of the day and finished mixed. The Dow Jones Industrial fell 0.7%, or 221.82 points, while the S&P 500 edged down 0.2%. The technology-heavy Nasdaq Composite eked out a 0.2% gain. On Thursday, regional banks continued showing signs of strain. Shares of PacWest Bancorp fell 23%, dragging down other regional banks, after the Los Angeles-based lender disclosed another round of deposit flight. The KBW Nasdaq Regional Banking Index fell about 2.4% and shares of other regional banks including Zions, Comerica and Bank of Hawaii slid between 4.5% and 10%. Shares of JPMorgan Chase edged down 0.3%. Bank of America ticked 0.3% higher. Other individual stocks also added downward pressure. Disney was the Dow’s worst performer, according to FactSet, trading 8.7% lower after the company reported that its Disney+ streaming service lost U.S. subscribers for the first time. Covid-era darling Peloton fell 8.9%, hitting a record low, after the company announced a recall affecting roughly 2.2 million bikes. Shares in Tapestry, the parent of brands including Coach and Kate Spade, gained 8.3% after executives raised their earnings forecast and said luxury shoppers in Asia are spending big as the region reopens after the pandemic. Robinhood Markets shares rose about 6.4% after the online broker reported better-than-expected revenue and said it would launch 24-hour trading for select stocks and ETFs. Much of Big Tech also continued this year’s upward climb after a rough 2022. Netflix rallied 2.8%, good enough for a seven-day winning streak, while Facebook owner Meta Platforms gained 1.2%. Amazon shares traded 1.8% higher and Google parent Alphabet rose 4.3%.

Asian stocks were mixed. The Nikkei index climbed 0.9 per cent to 29,374 points. Nissan Motor gained 4.9 per cent after strong and better-than-expected quarterly figures. Honda Motor (+4.7%) is sought after with its forecast of a 15 per cent rise in profits during the current fiscal year. Suntory Beverage & Food (+5.2%)'s business statement and outlook are also well received. Softbank, on the other hand, lost 3.6 per cent after reporting a net loss for the fiscal year ended. In Hong Kong, JD.com rallied 7.0 per cent following a better-than-expected profit. Baidu (+4.5 per cent) and Alibaba Group (+2.3 per cent) join the upward trend. In Seoul, Korea Gas is down 3.5 per cent with disappointing quarterly results. Samsung Fire & Marine Insurance (-3.2%) also reports new figures leading to shares being sold off. Posco International (+1.2%), on the other hand, is benefiting from its entry into the Morgan Stanley Capital International (MSCI) index.

US bond yields remained volatile on Thursday as congressional debates over the debt ceiling remained unresolved, leaving the threat of a default looming. The one-month Treasury bond rate climbed 4 basis points to 5.943 percent, remaining near its highest level since 2008. The yield of the 10-year Treasury bond lost about 5 basis points to 3.381%. The 2-year Treasury yield fell less than 1 basis point to 3.887%.

Target price Alcon: JPMorgan upgrades to CHF 71.00 (63.80) - Neutral
Target price Swisscom: Goldman Sachs cuts to CHF 500 (501) - Sell
Target price Partners Group: JPMorgan lifts to 848.00 (822.10) Swiss francs - Neutral

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