UBS (-0.5%) suffered a substantial loss in the third quarter of 2023. Adjusted for integration costs, however, pre-tax profit was nevertheless remarkably solid. The big bank had only forecast a break-even adjusted pre-tax result. On balance, the new UBS Group posted a loss of USD 785 million in the third quarter, as announced on Tuesday. This quarter is the first in which CS is fully included. In the second quarter, only June was included in the UBS financial statements. UBS quantifies the pre-tax loss for the third quarter at 255 million. Adjusted - without the costs of the CS integration - the result was plus 844 million. Adjusted for takeover effects, pre-tax profit at Group level was 1.1 billion dollars in the previous quarter. The situation at Credit Suisse has stabilised further, according to the press release. For the first time since the first quarter of 2022, new money inflows were generated again quarterly in CS's wealth management business, according to the statement. The bank spoke of its efforts to win back assets from CS clients. Overall, the UBS Group acquired net new money of USD 22 billion in its core business, global wealth management, during the third quarter. At the end of September, UBS thus managed assets totalling USD 5373 billion at overall bank level. At the end of June, the figure was 5530 billion dollars. UBS is forging ahead with the integration of its former competitor Credit Suisse. In the third quarter alone, the merged major bank cut more than 4,000 jobs worldwide, according to its own figures. It has also reported cost savings totalling billions and is therefore already ahead of its own plan.

Following the recovery rally last week, the SMI lost 3 points to 10,577 on Monday. 13 of the 20 SMI stocks were losers and six were gainers, while Swiss Life shares closed unchanged. A total of 17.95 (previously: 17.06) million shares were traded. The shares of pharmaceutical giant Novartis advanced 1.1 per cent, while Roche lagged behind with a decrease of 0.1 per cent. The shares of index heavyweight Nestle rose by 0.1 per cent. Geberit (-2.5 per cent) and Sika (-1.2 per cent) saw marked declines. Investors took accumulated profits here after the price gains in the previous week. Kühne & Nagel and Richemont likewise suffered marked price drops of 1.1 and 0.9 per cent respectively.

European equities edged lower on Monday after last week's rally, with investors continuing to weigh the possibility of interest rates falling in the U.S. and Europe as early as next year. The Stoxx Europe 600 index fell by 0.2% to 443.5 points. In Paris, the CAC 40 and SBF 120 were each down 0.5%. The DAX 40 in Frankfurt lost 0.4%, while the FTSE 100 in London was stable at the close. Retirement home operator Orpea fell by 5% after postponing its financial targets by a year. In its wake, Clariane (ex-Korian) declined by 3.7%. LVMH (-0.8%) has reached an agreement to buy Barton Perreira. The deal values the American eyewear manufacturer at around $80 million (€75 million), people close to the deal told the Wall Street Journal. The board of directors of Telecom Italia (-2.9% in Milan) approved KKR's bid for its fixed-line network, yet the decision is being contested by the group's largest shareholder, Vivendi (-1.4%), insisting this should have been submitted to a general meeting. Irish airline Ryanair (+5.3% in Dublin) raised its profit after tax forecast for the 2023-2024 financial year and announced that it would pay its first ordinary dividend next year, after reporting strong growth in its second-quarter results. On its heels, easyJet gained 1.2% in London.

U.S. stocks rose Monday, building on a rally that pushed major indexes sharply higher over the past week. The S&P 500 added 0.2%, while the Dow Jones Industrial Average inched up 35 points, or 0.1%. The tech-heavy Nasdaq Composite rose 0.3% for its seventh consecutive session of gains, the longest winning streak since January. Gains in the S&P 500’s information-technology sector helped outweigh losses in energy stocks such as Marathon Oil and Schlumberger. Companies including Disney and Roblox report earnings later this week. Satellite telecommunications group Dish Network (-37%) posted an unexpected loss in the third quarter, with sales falling by 9.5% over the period and coming in weaker than expected. Tesla (-0.3%) announced pay rises for employees at its Gigafactory near Berlin, where the powerful German trade union IG Metall is trying to gain a foothold. WeWork shares remained suspended on Monday pending an announcement, after falling to 0.84 dollars on Friday. As before, the stock gained more than 35% in after-hours trading. On Friday evening, the press release distribution company Business Wire informed its customers to disregard an earlier press release referring to an offer to buy back a block of shares for 9 dollars each. The stock lost nearly 66% of its value last week and is down 91% over three months. Berkshire Hathaway (-1.4%) reported on Saturday an operating profit up by more than 40% in the third quarter, to 10.8 billion dollars, thanks to good results in its insurance business. However, Warren Buffett's investment company incurred a net loss of 12.8 billion dollars, hit by the poor performance of the stock markets in the third quarter.

Stocks in Asia mostly fell on Tuesday. The HSI in Hong Kong extended its losses by 1.6 per cent. The Shanghai Composite is holding up better at minus 0.3 per cent - slightly supported by import data. Overall, export-heavy stocks tend to be weak. Meanwhile, the Nikkei-225 in Tokyo loses 1.3 per cent - weighed down by interest rate-sensitive stocks from the technology and electronics sectors. NTT Data fell by 5.3 per cent and Minebea Mitsumi by 2.5 per cent. After the previous day's rally in the wake of the short-selling ban, prices in South Korea are now falling markedly, with the Kospi down 3 per cent. While stocks from the battery manufacturing sector were the winners at the start of the week, they are now coming under pressure: LG Energy Solution and Samsung SDI are down 4.4 and 4.8 per cent respectively.

U.S. government debt yields rose by the most in roughly two weeks or more on Monday as traders considered a slight chance of another Federal Reserve rate hike by January. The 10-year Treasury note yield recovered 13 basis points on Monday to 4.65%, while the 2-year Treasury note yield gained 7 basis points to 4.937%.

Price target Barry Callebaut: Barclays upgrades to 1430 (1380) CHF - Underweight
Rating VAT: Jefferies starts with Hold - Target 370 CHF
Price target Swiss Re: UBS raises to 85 (82) CHF - Sell
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