Google never called for a "year of efficiency," but investors may still get one--after waiting a while. Shares of parent company Alphabet jumped more than 3% Wednesday morning following a report detailing Google is planning a major reorganization of its 30,000-person ad sales team. According to the report, the changes are part of the company's increasing use of artificial intelligence tools such as machine learning, which can automate much of the ad-buying process for customers.
Google is not exactly profligate in this area. Alphabet currently spends about 9% of annual revenue on sales and marketing costs. That's well below the relative outlay of smaller online advertising players such as Snap, Pinterest and Yelp, which currently spend between 26%-42% of revenue on sales and marketing. It even trails key rival Meta Platforms; sales and marketing costs for the parent company of Facebook have consumed about 10% of total revenue for the first three quarters of this year. In a note to clients, Bernstein tech specialist Mark Schilsky wrote: "THIS is the type of headline that Alphabet bulls have been waiting for," adding that investors "were frustrated this year by the company's relative lack of cost discipline especially when compared with Meta." Facebook's parent has seen its stock price nearly triple since the start of the year compared to a 60% gain for Alphabet. Class A shares of Google parent Alphabet closed 1.2% higher to USD 138.34 on the New York Stock Exchange on Wednesday.

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The Swiss stock market barely moved in the middle of the week. The SMI dropped by two points to 11,145 points. Among the 20 SMI stocks, 10 fell and 10 advanced. A total of 17.88 (previously: 23.69) million shares were traded. Among the individual stocks, UBS continued the previous day's positive performance and improved by a further 0.7 per cent. The financial investor Cevian Capital acquired a stake of around 1.3 per cent worth EUR 1.2 billion. "Cevian sees significant value potential in UBS," said Lars Förberg, Managing Partner and co-founder of Cevian Capital. On the stock exchange, the move is seen as a vote of confidence. OC Oerlikon fell by 2.5 per cent to CHF 3.72. The Stifel analysts have lowered the price target to 3.90 from the previous 4.10 francs. The rating remains "Hold". In contrast, Kuehne + Nagel gained 1.4 per cent to 290.50 francs. JP Morgan has raised its target price to 246 from 240 francs. The rating remains „Underperform".

The European stock markets closed higher on Wednesday, buoyed by a further fall in interest rates as investors monitored tensions in the Red Sea and their repercussions on oil prices. The Stoxx Europe 600 index gained 0.2% to 477.9 points. In Paris, the CAC 40 and SBF 120 advanced by 0.1% and 0.2% respectively. The DAX 40 in Frankfurt was down 0.1%, while the FTSE 100 in London climbed 1%. Airbus (-1.4%) is said to be in favour of creating a consortium to buy the big data and cybersecurity (BDS) activities of the Atos group (+3.5%), Challenges reported on its website on Wednesday. Thales (-0.7%) and Dassault (+0.8%) have also been approached to join the consortium, the business publication added. The General Court of the European Union ruled on Wednesday that it had annulled the decisions of the European Commission approving the financial aid granted by France to the air carrier Air France-KLM (+0.4%) and its subsidiary Air France in connection with the Covid-19 pandemic. This aid has already been repaid. Telefonica shares rose by 3.2% in Madrid following the announcement that the Spanish government's shareholding agency, Sepi, had acquired a stake in the company. The share should benefit in the short term from this acquisition, although the risk of political interference could put off some investors, writes Ivan San Felix Carbajo, analyst at Renta4, in a memorandum.

U.S. stocks pulled back Wednesday, pausing a rally that sent the Dow Jones Industrial Average to record highs. The S&P 500 fell 1.5% in its biggest one-day percentage drop since September. The Dow industrials shed about 476 points, or 1.3%, and the Nasdaq Composite eased 1.5%, marking their worst days since October. All three indexes were positive as of early Wednesday afternoon, then sold off to finish the session. U.S. stock indexes had marched steadily higher since Federal Reserve Chair Jerome Powell at last week’s central bank policy meeting opened the door to interest-rate cuts. The Nasdaq and the Dow on Wednesday snapped nine-session winning streaks. The S&P 500 ended the day about 2% off its all-time high. FedEx in its quarterly earnings report warned of weakening demand and lowered its forecast for annual revenue. Shares toppled 12%, their worst one-day drop since September 2022. General Mills dropped 3.6% after the packaged-foods maker reported a drop in sales for its recently ended quarter, citing softening demand for snacks and breakfast foods. All 11 sectors in the S&P 500 fell on Wednesday. Communication services was the relative outperformer, down less than 0.1%, with Class A shares of Google parent Alphabet rising 1.2%. All 30 stocks in the Dow industrials closed lower. The small-cap Russell 2000 index also finished down 1.9%.

Stocks in Asia mostly fell on Thursday. Tokyo saw the sharpest decline, with the Nikkei 225 index falling by 1.6 per cent to 33,127 points. Elsewhere, the indices lost between 0.1 per cent in Hong Kong and 0.8 per cent in Seoul. However, the Shanghai stock market is an exception with the market barometer being up slightly at 0.2 per cent after falling to its lowest level of the year on Wednesday. Nippon Steel shed 1.4 per cent after the rating agency S&P placed the company's credit rating on its watch list in response to the announced takeover of U.S. Steel.

Government-bond yields in the U.S. and the U.K. finished lower on Wednesday after the latest inflation report from Britain fuelled hopes for continued easing in price pressures and interest-rate cuts by central banks. The 10-year Treasury note yield fell by a further 8 basis points to 3.855%. The 2-year Treasury note yield declined by 10 basis points to 4.344%.

Rating Medacta: UBS raises to Buy (Neutral) - Target 137 (119) CHF

Rating Inficon: Baader Helvea downgrades to Reduce (Add) - Target CHF 1180 (900)

Rating VAT: Baader Helvea upgrades to Add (Reduce) - Target 444 (259) CHF

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