Steady hiring and cooling wage growth last month offered the latest evidence that the U.S. economy is making progress toward a so-called soft landing that brings inflation down without a recession. U.S. employers added 275,000 jobs in February, according to the Labor Department, a blockbuster number that far exceeded the 198,000 that economists had expected. But behind the headline number were signs of a gradual slowdown. The unemployment rate ticked up to 3.9%, which was higher than expected, and wage growth slowed. Gangbusters data from January were revised sharply lower. The Goldilocks report lends credence to the Federal Reserve’s outlook that somewhat lower interest rates could be warranted later this year, potentially providing a boost to markets that have been on a tear to start 2024.

On Friday, the SMI gained 0.6 per cent to 11,647 points, marking its highest level so far this year. Of the 20 SMI stocks, there were 15 price gainers and four price losers, with only the Swiss Re share closing unchanged. A total of 29.65 (previously: 24.97) million shares were traded. UBS was by far the strongest performer among SMI shares. UBS climbed 4.1 per cent after analysts at Morgan Stanley upgraded the shares to "overweight". The index heavyweights Nestle (+0.5%), Novartis (+0.4%) and Roche (+0.1%) were also in demand. Logitech rose by 1.5 per cent in the wake of the strong US technology stocks. However, cyclicals such as ABB (+0.4%), Geberit (+0.7%), Holcim (+1%) and Sika (+0.8%) were also on investors' purchase lists.

The European stock markets closed mixed on Friday, as investors became increasingly convinced that central banks would start cutting rates before the summer. The Stoxx Europe 600 index ended virtually unchanged at 503.3 points. In Paris, the CAC 40 and SBF 120 rose by 0.2% each. The CAC 40 reached a new closing record of 8,028 points. In Frankfurt, the DAX 40 gave up 0.2%, while the FTSE 100 lost 0.4% in London. Over the week as a whole, the Stoxx Europe 600 gained 1.1%. On Thursday, Euronext announced a recomposition of the CAC 40 index, with the return of hotel group Accor (+0.9%) and the exit of rail equipment manufacturer Alstom (-0.5%). The stock market operator also revealed the reintegration of cement manufacturer Vicat (+0.6%) and oil group Maurel et Prom (+0.6%) into the broader SBF 120 index, as well as the delisting of Fnac Darty (-3.9%), Voltalia (-9.5%) and Clariane (+1.1%). These changes will take effect from the session on Monday 18 March. Property companies advanced, buoyed by the prospect of an imminent fall in interest rates across the eurozone. Covivio gained 6.3%, Gecina 4.6%, Icade 2.9% and Argan 2.8%. Communications and media conglomerate Vivendi (-2.3%) provided no details of its planned demerger upon publication of its annual results. The petroleum products distribution and storage group Rubis (+7.2%) published better-than-expected results for the past financial year and raised its dividend.

Stocks dropped to end the week after the latest U.S. jobs report offered mixed signals on the economy and the run-up in tech shares took a breather. The S&P 500 closed Friday 0.7% lower. The Dow Jones Industrial Average dropped 0.2% and the Nasdaq Composite declined 1.2%. All three indexes logged weekly losses, with the Nasdaq off 1.2%. Information technology was the worst-performing S&P 500 sector Friday. Chip makers struggled, with Broadcom, Intel, Microchip Technology and ON Semiconductor all shedding at least 4%. Broadcom reported profits that missed Wall Street expectations after Thursday’s close. The so-called Magnificent Seven tech stocks, which for months have helped power the broader market higher, had a downbeat week, with all but Nvidia and Meta Platforms closing lower. Nvidia recorded a stark reversal Friday, its shares trading up more than 5% early in the session before closing down 5.6%. The stock is still up nearly 80% in 2024. Costco Wholesale was the S&P 500’s worst performer Friday. The warehouse club operator fell 7.6% from a record set Thursday after its quarterly sales missed estimates. Bitcoin closed at $69,294, a fresh 4 p.m. record. Gold prices also rose, continuing their record-breaking week to settle at $2,178.60.

Asian markets stumbled on Monday ahead of the publication of the US consumer price index (CPI). The Nikkei index, which comprises 225 stocks, lost 2.6 per cent to 38.672 points. The broader Topix index fell by 2.5 per cent to 2658 points. The shares of Japanese chip manufacturers followed their American counterparts into negative territory. Chip supplier Tokyo Electron lost 4.61 per cent and chip test supplier Advantest fell by 6.62 per cent. The Shanghai stock exchange rose by 0.2 per cent. The index of the most important companies in Shanghai and Shenzhen gained 0.8 per cent. Chinese price data released over the weekend showed a welcome rise in inflation to 0.7 per cent in February, although producer prices remained deflationary. In Hong Kong, technology shares are in demand: Bilibili gained 13.7 per cent, JD.com 5.7 per cent and Meituan just under 6 per cent. Shares representing the real estate sector, on the other hand, are under pressure.

U.S. government debt yields ended lower on Friday, but bounced off of their session lows, after February’s jobs report showed that the unemployment rate ticked upward to a 25-month high, even though the economy created more jobs than expected last month. Traders will get their next look at inflation figures on Tuesday with the release of February’s consumer-price index. The 10-year Treasury note fell by 1 basis point to 4.082%. The 2-year Treasury note yield shed 5 basis points to 4.471%.

Bank of America upgrades VAT Group to Buy (Neutral) - Target CHF 535 (454)
UBS lifts Alcon to CHF 87 (78) - Buy
Morgan Stanley raises UBS to Overweight (Equalweight) - 33 (29) CHF

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