LVMH Moet Hennessy Louis Vuitton reported a decrease in revenue for the first quarter, missing analysts’ expectations, amid what it called a geopolitical and economic environment that remains uncertain. The French luxury conglomerate—which houses brands Dior and Louis Vuitton, among others—said Tuesday that revenue for the first three months of the year came in at €20.69 billion, down 2% in reported terms compared with the year-earlier period. Analysts expected group revenue of €21.14 billion, according to a poll of estimates compiled by Visible Alpha. Revenue rose 3% organically, which compares with the 17% organic increase the company reported during the same months last year, when it saw a significant rebound in Asia. The core fashion and leather-goods division contributed €10.49 billion to group revenue, which compares with €10.73 billion in the year-prior period. This came below analysts’ forecasts of €10.66 billion, according to Visible Alpha consensus. As for the wines and spirits business, the company saw an organic 12% decline. The division has been under pressure as demand for high-end liquors fell in the U.S, leading to high inventory levels. Regionally, LVMH, the owner of jewellers Bulgari and Tiffany, saw strong momentum in Japan, where it achieved organic growth of 32%. However, Asia excluding Japan saw a decline of 6%. The company faced a tough comparison base in the region, since in the same period of 2023 it benefited from the lifting of sanitary restrictions in China and a rebound in international travel.

The ongoing crisis in the Middle East and, above all, the continued rise in bond yields caused the Swiss stock market to fall sharply on Tuesday. The SMI lost 1.7 per cent to 11,197 points. At the day's low, the index had stood at 11,172 points. All 20 SMI stocks closed lower. A total of 25.46 (previously: 17.58) million shares were traded. Julius Baer lost a further 2.6 per cent, having already traded "ex-dividend" on Monday. On Tuesday, Swiss Re (-8.9 per cent) and Adecco (-11.1 per cent) declined far more than the dividend discount would suggest. UBS shares were also under pressure, dropping 2.7 per cent. Media reports about a possible capital requirement of up to 25 billion dollars at the bank had a negative impact. The Sika share shed 0.6 per cent, outperforming the market as a whole. Analysts at Baader spoke of a strong start to the year in light of the financial results.

European stocks were sharply lower on Tuesday, tracking falls in equities globally on fears of Middle East tensions escalating and prospects of U.S. interest rates staying higher for longer. The Stoxx Europe 600 index lost 1.5% to 498.2 points. In Paris, the CAC 40 and the SBF 120 each fell by 1.4%, closing below the symbolic thresholds of 8,000 and 6,000 points respectively. The DAX 40 slipped 1.4% in Frankfurt and the FTSE 100 in London dropped 1.8%. Steelmakers ArcelorMittal (-6.9%) and Aperam (-6.7%) suffered from negative analyst comments. Asset management company Amundi (-1.1%) signed a memorandum of understanding to merge its US operations with Victory Capital, in exchange for a stake in its US competitor and long-term reciprocal international distribution agreements. Project management software publisher Planisware has launched its initial public offering (IPO) on Euronext Paris, in a deal valuing the company at €1.11 billion. Postponed last October due to difficult market conditions, the IPO on the regulated market of Euronext Paris is now scheduled for Thursday at a price of 16 euros per share. Swedish telecoms equipment supplier Ericsson (up 1.7% in Stockholm) reported better-than-expected margins and net profits for the first quarter.

The Dow Jones Industrial Average ended higher and Treasury yields hit new five-month highs after Federal Reserve Chair Jerome Powell suggested that the central bank would likely need to wait longer to cut interest rates than it had previously anticipated. Stocks and bonds have both hit a rough patch ever since the Labor Department reported last week that the consumer-price index rose more than expected in March, marking the third consecutive month of firmer-than-expected inflation data. That has dented investors’ conviction that interest rates would come down later in the year. In recent months, Powell has signaled that the Fed would likely cut rates soon, suggesting that officials needed just a little more confidence that inflation was sustainably on the path to their 2% target. Speaking at a conference Tuesday, however, Powell said that recent data “indicate that it is likely to take longer than expected to achieve that confidence” and that current policies need “further time to work. Stocks had been wavering all session before Powell spoke and continued their choppy trading during and after his remarks. Some analysts noted that Powell’s comments didn’t come as a surprise, mostly confirming what investors had already concluded after last week’s economic data. Coming off its largest two-day decline since March 2023, the S&P 500 edged down 0.2%. The Dow snapped a six-day losing streak, rising 0.2%, or roughly 64 points. The Nasdaq Composite slipped 0.1%. Earnings reports helped boost the Dow industrials. UnitedHealth Group rose 5.2% after the healthcare giant reported better-than-expected first-quarter results. Those earnings also provided a lift to other insurers, which have been hurt in recent months by investor worries about rising medical costs. Among that group, Humana climbed 0.9%, while Elevance gained 1.4%. Bank earnings, meanwhile, continued to earn mixed reviews from traders. Morgan Stanley rose 2.5% after its first-quarter earnings showed a pickup in investment-banking revenue. But Bank of America shares fell 3.5% after the bank reported an 18% drop in first-quarter profit. Shares of smaller companies performed worse than those of larger businesses—continuing a recent trend—with the Russell 2000 edging lower.

Asian stocks were mixed on Wednesday. In Tokyo, the Nikkei 225 index lost 0.3 per cent to 38,362 points. The biggest gains were seen in Shanghai, where the Composite recovered by 1.2 per cent, while Hong Kong held its ground. Industrial & Commercial Bank of China climbed 0.8 per cent after initial losses, while Bank of China increased by 1.5 per cent.

Long-dated U.S. government debt yields finished at new five-month highs on Tuesday, after Federal Reserve Chair Jerome Powell indicated that policy makers will likely need to delay any interest-rate cuts and the International Monetary Fund projected faster economic growth for the U.S. this year. The 10-year Treasury note yield rose by 3 basis points to 4.663%. The 2-year Treasury note yield climbed by 4 basis points to 4.979%.

Target price Adecco: Goldman Sachs downgrades to CHF 41 (41.50) - Neutral
Rating Barry Callebaut: UBS raises to Neutral (Sell) - Target CHF 1350 (1180)
Target price Meyer Burger: Goldman Sachs cuts to CHF 0.02 (0.03) - Neutral
Produced by MBI Martin Brückner Infosource GmbH & Co. KG on behalf of Swissquote. All news is acquired with journalistic accuracy. No liability is assumed for delays or errors.