UBS's record profit for the 2023 financial year is not quite as high as was published at the beginning of February on the basis of unaudited figures. Net profit is now reported at USD 27.8 billion. On 6 February, UBS had published an even higher net profit of USD 29.0 billion. In the annual report released on Thursday, UBS justifies the slightly lower figure with the slightly lower negative goodwill it is entitled to from the purchase of its competitor Credit Suisse. Negative goodwill was recognised because the purchase price fell significantly short of the book value of Switzerland's second-largest bank at the time. The negative goodwill is now reported at USD 27.7 billion, which is USD 1.2 billion lower. According to UBS, the estimates made at the time of acquisition have been "refined" in accordance with accounting standards. Diluted earnings per share are now reported at USD 8.45. This also has an impact on UBS's common equity tier 1 capital ratio at the end of 2023, which now stands at 14.4 per cent, compared to 14.5 per cent reported at the beginning of February.

Wednesday, the SMI added 0.2 per cent to 11,706 points. Among the 20 SMI stocks, ten winners and nine losers faced each other, with one share closing unchanged. A total of 17.88 (previously: 18.73) million shares were traded. Business became increasingly quiet as the long public holiday weekend approached and shortly before the end of the quarter, according to market participants. There is no stock market trading in Switzerland on Good Friday and Easter Monday. The SMI received a boost from the heavyweights Nestle (+0.5%) and Novartis (+0.6%). Holcim (-0.1%) did not benefit sustainably from a positive commentary by analysts at Morgan Stanley. Swisscom shares rose by 1.2 per cent on the day of its Annual General Meeting. In the wake of profit-taking among some heavyweights in the US technology sector, Logitech was also caught up in the downward spiral and plunged by 3 per cent.

The European stock markets closed higher overall and at record levels on Wednesday, trailing Wall Street where investors are awaiting new economic statistics to validate the hypothesis that the Federal Reserve (Fed) will cut interest rates in the near future. Trading has been quiet since the start of the week, however, with many investors already on holiday ahead of the extended Easter weekend. The Stoxx Europe 600 index gained 0.1% to reach a new all-time high of 511.75 points. In Paris, the CAC 40 advanced by 0.3% to 8,204.81 points, while the SBF 120 climbed by 0.2% to 6,199.19 points. In Frankfurt, the DAX 40 added 0.5% to 18,477.09 points, also setting a new record, its second in a row. In London, the FTSE 100 was unchanged at the close. Renault (-0.8%) announced its intention to sell up to 100,242,900 Nissan shares, representing 2.5% of the capital, to its long-standing partner in the Renault-Nissan-Mitsubishi Alliance. On Wednesday, Barclays raised its target price for European aircraft manufacturer Airbus (+0.6% to 171.60 euros) from 154 euros to 202 euros and confirmed its "overweight" recommendation. Plastic Omnium (-0.2%) announced that it was changing its name to OPmobility. Hennes & Mauritz (H&M) jumped by more than 10% on the Stockholm Stock Exchange, as the ready-to-wear retailer announced better-than-expected results for the first quarter, boosted by the positive response to its spring collections.

Major stock indexes rose Wednesday, with the S&P 500 snapping a three-day slide to close at a record. The S&P 500 rose 0.9%, while the Dow Jones Industrial Average added 1.2% and the Nasdaq Composite closed 0.5% higher. The S&P 500 is little changed on the week but heading for a spectacular first quarter, currently up 10% year-to-date. Bitcoin is trading near a record, and meme-stocks have seen a revival. The latest example: Trump Media & Technology, the parent company of the former president’s social-media platform Truth Social, jumped 14% Wednesday after climbing 16% on its first day of trading Tuesday. The company closed with a $9 billion market cap. Not all meme stocks are soaring. GameStop shares tumbled 15% Wednesday after it reported a sharp drop in quarterly sales. Among single stocks, Merck was one of the S&P 500’s best performers, rising 5% to a record high after its new drug treating a potentially deadly lung disease was approved in the U.S. Cintas shares jumped about 8% to also close at a record after the uniform rental and business services provider raised sales and earnings guidance.

Asian stocks were mixed. The Nikkei-225 suffered a particularly sharp setback in Japan, with the leading index losing 1.5 per cent to 40,161 points. In China, on the other hand, stock markets rose substantially: The HSI in Hong Kong is up 1.6 per cent, while the Shanghai Composite gains a further 0.9 per cent. In Taipei, Hon Hai Precision (Foxconn), the Apple contract manufacturer for mobile phones, climbed 4.5 per cent to a record high, driven by the AI boom. Meanwhile, the South Korean Kospi declined by 0.3 per cent. Traders are referring to profit-taking. For example, the defence stock Hanwha Aerospace shed 3.4 per cent after an eight-day rally.

U.S. government debt yields slipped on Wednesday. 10-year U.S. Treasury yields fell by 5 basis points to 4.192%. 2-year Treasury yields dropped 2 basis points to 4.579%. The growing nervousness ahead of the PCE data on Friday brought some inflow to the US bond market from investors in search of safety. Rising bond prices put pressure on yields. Observers also pointed out that Wednesday was the last full trading day of the quarter for the bond market. On Thursday there is only a shortened session.

Price target Swatch: Julius Baer downgrades to CHF 215 (250) - Hold
Price target Sandoz: JP Morgan raises to CHF 33.50 (31.50) - Overweight
Rating Rieter: UBS upgrades to Buy (Neutral) - Target 155 (93) CHF

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