Swiss luxury group Richemont (-1.8% in Zurich) announced on Monday an end to its agreement with technology company Farfetch, to which it was to sell almost half of its Yoox Net-A-Porter (YNAP) e-commerce arm. The owner of Cartier and Van Cleef & Arpels issued the statement in the wake of the takeover of Farfetch by the Coupang retail group. Coupang indicated on Monday that it had reached an agreement to acquire Farfetch's activities, including a $500 million bridge loan and a delisting. Farfetch, which is listed on the New York Stock Exchange, has seen its market capitalisation shrink from $24 billion to $250 million between 2021 and the present day. The group recently postponed the publication of its third-quarter accounts. On Monday, Richemont warned that Farfetch was unlikely to redeem the $300 million worth of convertible bonds it has held since November 2020. The value of these bonds in Richemont's accounts stood at €218 million at 30 November 2023, the group specified. Richemont also confirmed that its various brands would continue to use their own e-commerce technology platforms and that it would reassess its options for its YNAP subsidiary.

The Swiss stock market started the week moderately lower. The SMI dropped by 0.3 per cent to 11,156 points. Of the 20 SMI stocks, there were 12 losers and 7 gainers, while Swiss Life shares closed unchanged. A total of 19.27 million shares were traded (previously: 57.96 million). Novartis and Roche climbed 0.6 and 0.3 per cent respectively. Nestle shares were virtually unchanged. Holcim, Geberit and Sika lagged behind, recording losses of up to 2.5 per cent. In contrast, Swisscom was the day's winner with an increase of 1.1 per cent.

The European stock markets kicked off the week on a bearish note, against a backdrop of rising bond yields and oil prices, as well as an unexpected deterioration of the German business climate. The Stoxx Europe 600 index closed down 0.3% on Monday, at 475.3 points. In Paris, the CAC 40 lost 0.4% and the SBF 120 was down 0.3%. The DAX 40 fell by 0.6% in Frankfurt, while the FTSE 100 in London gained 0.5%, buoyed by telecoms operator Vodafone. ArcelorMittal (+5.3%) was the biggest riser within the CAC 40, as Nippon Steel and U.S. Steel, two of the world's leading steel producers, announced on Monday that they had reached a definitive agreement to buy the American group from its Japanese competitor for 14.1 billion dollars. Call centre operator Teleperformance (+1.6%) cancelled 700,000 treasury shares, purchased on the market as part of its share buyback programmes representing 1.09% of its share capital, and now controls 4.12% of its capital. French telecoms operator Iliad announced on Monday that it had submitted a proposal to its British counterpart Vodafone (up 3.9% in London) to combine their operations in Italy. Under the deal, each of the two groups would obtain a 50% stake in the merged entity, dubbed NewCo, Iliad revealed in a statement.

Investors dreaming of interest-rate cuts continued to push stocks higher on Monday. Coming off its seventh straight week of gains, the S&P 500 rose 0.5%. The tech-heavy Nasdaq Composite advanced 0.6%, while the Dow Jones Industrial Average was effectively unchanged, rising roughly one point to just eke out its fourth straight record close. Shares of large technology companies were once again at the forefront of the market rally on Monday. Facebook parent Meta Platforms rose 2.9% to $344.62 a share, its highest close since December 2021. Chip maker Nvidia added 2.4%. Apple was an exception, losing 0.9% after the company said it would halt sales of its smartwatch to comply with an import ban related to a ruling that the device’s blood-oxygen sensor violated patents. Meanwhile, U.S. Steel jumped 26% after the company agreed to a $14.1 billion sale to Japan’s Nippon Steel. Shares of rival Cleveland-Cliffs rose 9.6%. Software publishers Adobe (+2.5%) and Figma announced on Monday that they had put an end to their planned $20 billion merger by mutual agreement, having failed to obtain the green light from the competition authorities in the European Union and the United Kingdom. Cloud data analytics company Alteryx (-1.6% to 47.26 dollars) announced on Monday that it had reached an agreement to be acquired by private equity firm Clearlake Capital for 48.25 dollars per share in cash, or nearly 4.4 billion dollars. DocuSign (-2.5%) paused after jumping 12% on Friday. Genetic sequencing technology manufacturer Illumina (+1.6%) reported that it would be spinning off Grail after its acquisition of the cancer screening specialist was rejected by antitrust authorities in the US and the European Union. IC maker Broadcom (+1.5%) overtook Visa (+0.1%) as the tenth-largest market capitalisation in the US on Friday, according to Dow Jones Market Data. Broadcom's market capitalisation, which stood at $537 billion at the close of trading on Monday, increased by $50 billion following its acquisition of VMware at the end of November.

While the Japanese central bank's adherence to its loose monetary policy is boosting the Japanese stock market, most other places in the East Asian region are more subdued on Tuesday. The Bank of Japan (BoJ) confirmed the negative short-term interest rate at minus 0.1 per cent and the reference value for the yield on 10-year government bonds at 1 per cent. The Nikkei index rose by 1 per cent to 33,083 points. In Shanghai, on the other hand, the index fell by 0.1 per cent and in Hong Kong by 0.5 per cent. In Hong Kong, Country Garden's real estate shares fell by 6.3 per cent. The company warned of lower profits in 2023 due to necessary write-downs. Other sector stocks such as Longfor (-4.4 per cent) also declined in the wake. In Tokyo, Nippon Steel slipped by 3.4 per cent. The share is thus reacting to the previous day's announcement that Nippon Steel is taking over U.S. Steel for over 14 billion dollars.

U.S. government debt yields were little changed to slightly higher on Monday as traders considered arguments against a dovish policy pivot by the Federal Reserve in early 2024. The 10-year Treasury note yield rose by 3 basis points to 3.948%. The 2-year Treasury note yield gained 4 basis points to 4.472%.

Straumann price target: JPMorgan upgrades to CHF 145 (139) - Neutral
Citi lowers Nestle target to CHF 115 (130) - Buy
Stifel raises Holcim target to CHF 69 (62.50) - Hold

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