Novartis raised its full-year earnings guidance for the third time this year after it reported higher net profit and sales for the third quarter, boosted by strong sales of key drugs. The Swiss pharmaceutical giant said Tuesday that it now expects core operating profit to grow this year by a percentage in the mid to high teens range. It had previously anticipated a growth rate from low double percentage digits to mid-teens excluding Sandoz, the generics unit that was spun off earlier this month. Novartis reiterated its expectation for net sales growth of a high single digit in 2023. For the third quarter, the company made a net profit of $1.76 billion compared with $1.57 billion for the same period last year. Net sales for the quarter grew to $11.78 billion from $10.49 billion. “Our growth drivers, including Kesimpta, Entresto, Kisqali and Pluvicto, continue to perform well in the market,” Chief Executive Vas Narasimhan said. Excluding exceptional items, core operating income from continuing operations was up 21% at $4.41 billion.

On Monday, the SMI lost 0.2 per cent to 10,332 points. Among the 20 SMI stocks, there were eleven price gainers and nine price losers. 17 (previously: 26.45) million shares were traded. Roche fell by 0.6 per cent following the announcement of the acquisition of Telavant Holdings, a company specialising in intestinal diseases. Roche will pay the previous owners Roivant Sciences and Pfizer up to 7.25 billion dollars. Novartis closed 0.4 per cent lower. Encouraging results from a phase III trial of the cancer drug Pluvicto for prostate cancer failed to support. Meanwhile, some cyclicals such as ABB (+1.2%), Geberit (+0.6%) and Holcim (+1.1%) were in demand. Financials were mixed. UBS rose by 0.6 per cent and Swiss Life by 0.5 per cent. Swiss Re and Zurich, on the other hand, fell by 0.4 and 0.1 per cent.

Europe's stock markets ended the day mixed. The Stoxx Europe 600 index closed down 0.1% at 433.18 points. In Paris, the CAC 40 and the SBF 120 gained 0.5% to 6,850.47 points and 0.4% to 5,190.44 points respectively. The DAX 40 was unchanged in Frankfurt, while the FTSE 100 lost 0.4% in London. Electronic payments specialist Worldline (-2.3%) was the biggest drop among the CAC 40 companies, penalised by the blackout that disrupted bankcard payments at the weekend and by cautious comments from Deutsche Bank regarding the outlook for the sector. The European Commission has authorised the acquisition of the Luxembourg call centre operator Majorel Group by its French competitor Teleperformance (-4.1%). Shopping centre operator Carmila (-2.6%) confirmed its profitability target for 2023 after reporting higher net rental income for the first nine months of the year. Aircraft manufacturer Dassault Aviation gained 1.3%. Saudi Arabia is reportedly ready to order 54 Rafales from Dassault Aviation, according to La Tribune, citing "corroborating sources". German car manufacturer Volkswagen lost 1.2% after revising downwards its operating profit forecast for this year.

Investors have been waiting for the right moment to jump back in the frigid bond market. On Monday, some of them took the plunge. The Dow Jones Industrial Average fell 0.6%, or 191 points. The S&P 500 ticked down 0.2%, while the tech-heavy Nasdaq Composite rose 0.3%. As bond yields dropped Monday, shares climbed in each of the so-called “Magnificent Seven” companies. Amazon.com rose 1.1%, Facebook owner Meta Platforms gained 1.7%, chip maker Nvidia increased 3.8% and automaker Tesla inched up less than 0.1%. Apple rose 0.1%, even as Foxconn Technology Group, one of the iPhone maker’s biggest suppliers, said it is cooperating with Chinese probes. Microsoft edged 0.8% upward, while Google-owner Alphabet ascended 0.7%. Both companies report earnings after Tuesday’s close. On Monday, shares in Morgan Stanley dropped 2% to their lowest closing price since February 2021. The bank said last week that profit fell about 9% from a year ago due to a sharp decline in Wall Street deal making. The energy sector was Monday’s big loser alongside consolidation in the oil patch and falling crude prices. Chevron’s stock sank 3.7% after the company announced a $53 billion deal to buy Hess, which declined 1.1%.

Asian stocks were mixed on Tuesday. The Hang Seng Index recorded the markedest decline, falling by 0.7 per cent. The Shanghai Composite, on the other hand, rose by 0.4 per cent. Chinese sovereign wealth fund Central Huijin Investment has bought ETFs and announced that it will increase its holdings further in the future. In Tokyo, the Nikkei-225 loses 0.5 per cent. The technology-heavy Topix index drops 1.3 per cent marking its lowest level since June in the course of the day. Mainly due to the slump in Nidec shares by 10.7 per cent after the important supplier to the technology and electric vehicle industry published disappointing quarterly results.

The key 10-year U.S. Treasury yield finished at a one-week low after briefly breaking through 5% on Monday, as traders assessed the war in the Middle East and questions about the continued strength of the U.S. economy. The 10-year Treasury note yield finally eased by 9 basis points to 4.842% while the 2-year Treasury note fell by 5 basis points to 5.063%.

Barclays downgrades Nestle target to CHF 125 (135) - Overweight
Roche target price: CFRA lowers to 300 (320) CHF - Buy
Berenberg cuts L'Oreal target to EUR 389 (392) - Hold

Produced by MBI Martin Brückner Infosource GmbH & Co. KG on behalf of Swissquote. All news is acquired with journalistic accuracy. No liability is assumed for delays or errors.