Alibaba (-6%) Group’s profit sank in the latest quarter, even as revenue growth picked up due to higher sales in its key e-commerce, cloud, and logistics businesses. The Chinese company said Tuesday that net income in its fiscal fourth quarter ended March fell 86% from a year earlier to 3.27 billion yuan ($452.1 million), well short of expectations for CNY15.27 billion in a FactSet poll of analysts. Alibaba said the bottom line was hurt by a net loss in investments during the quarter due to mark-to-market changes. Adjusted net profit, which excludes the effects of share-based compensation expenses, investment gains and losses, some impairments and other items, fell 11% to CNY24.42 billion, missing analysts’ expectations of CNY25.47 billion. Quarterly revenue rose 6.6% to CNY221.87 billion, slightly beating analysts’ estimates of CNY220.62 billion. That was faster than the 5.1% expansion in the preceding quarter. Hong Kong-listed shares of the company, which is also listed in the U.S., are up 9.3% this year, underperforming the benchmark Hang Seng Index’s 12% gain. Its American depositary receipts fell 6% on Tuesday.

The cautious trend on the Swiss stock market entered its second round on Tuesday. The SMI gained 0.1 per cent to 11,784 points. Among the 20 SMI stocks, there were ten losers and ten winners. A total of 23.13 (previously: 23.39) million shares were traded. Following the disappointing results of the German Hannover Re (-3.5%), Swiss Re fell by 1.4 per cent. Alcon, on the other hand, shot up by 7.5 per cent. According to UBS, the strong first quarter of the ophthalmology specialist was well received, also because the forecast was not lowered as initially expected. Equita rated the business figures as good. Lonza was unable to keep up in the healthcare sector. The pharmaceutical manufacturer spoke of a weak performance in the first quarter, although the forecast was reaffirmed. Investors took the statements as an opportunity to take profits, with the share price losing 1.7 per cent. Roche (-1.4%) could face greater competitive pressure regarding a pharmaceutical product, according to trading. Among the second-line stocks, the shares of hearing aid provider Sonova rose by 6.8 per cent, as the company reported improved growth momentum following an acceleration in the second half of the financial year.

European stocks traded mixed on Tuesday in a cautious session ahead of U.S. inflation data. All eyes are on Wednesday's U.S. CPI data to see if upside inflation surprises in Q1 were temporary or a concerning trend. The Stoxx Europe 600 index gained 0.2% to 521.7 points. In Paris, the CAC 40 and SBF 120 also picked up 0.2%. The DAX 40 gave up 0.1% in Frankfurt, while the FTSE 100 pocketed 0.2% in London. Societe Generale (+3.8%) was the biggest riser within the CAC 40, as French President Emmanuel Macron said in an interview with the Bloomberg news agency that he was in favour of consolidation in the European banking sector. Digital assistance solutions provider Solutions 30 (+3.5%) has confirmed its sales growth target for 2024, supported by the acceleration of its activities in Benelux and Germany. In the first quarter, group sales rose by 3.8% year-on-year. British mining group Anglo American (-3.2% in London), which on Monday rejected an improved takeover bid from its rival BHP (+2.4% in London), announced that it was going to sell or spin off its coal, platinum and diamond activities in order to simplify its structure and create lasting value. Bayer (-0.5% in Frankfurt) reported adjusted EBITDA above market expectations for the first quarter.

Stock indexes traded at or near records Tuesday after traders took in one inflation report and looked ahead to another that will offer a much-anticipated look at how consumer prices have been faring. A report on wholesale prices Tuesday offered mixed signals for investors trying to assess the Federal Reserve’s path forward in its fight against inflation. The producer-price index rose more than economists expected in April but was revised lower for March. Traders saw little reason to pull back on their recent bullishness and sent the Nasdaq Composite up 0.8% to close at a record, its first since April 11. The S&P 500 rose 0.5% to just shy of a record, while the Dow Jones Industrial Average was 0.3% higher. Investors could be forced to reassess their optimism after Wednesday’s release of the consumer-price index. A surprisingly high reading for April would extend a streak of three reports that have come in firmer than expected. Economists polled by The Wall Street Journal are forecasting a 3.4% year-over-year rise in inflation. Trading in meme stocks GameStop and AMC Entertainment on Tuesday resembled the frothiest days of the pandemic-era trading craze in 2021, after social-media posts prompted a resurgence in interest. GameStop shares closed 60% higher, while AMC was up 32%. They were among the most heavily traded shares, and GameStop trading was halted several times for volatility. Walmart shares fell 0.9% after The Wall Street Journal reported the retailer, set to report earnings Thursday, is cutting hundreds of corporate jobs. The Justice Department said Boeing (+1.3%) violated a settlement reached three years ago over its employees’ role in two fatal jet crashes, exposing the company to potential criminal prosecution over one of the biggest crises in its history.

Asian stocks were mixed. In Tokyo, the Nikkei-225 rose by 0.2 per cent to 38,425 points, after being significantly higher in early trading. Shanghai was marginally down, with market participants citing the tariffs now imposed by the US on electric cars and semiconductors, among other things, as a negative factor. Accordingly, shares from the affected sectors are among the biggest losers of the day. Great Wall Motor, for example, fell by 2 per cent. There is no trading on the stock exchanges in Hong Kong and Seoul in the middle of the week. Buddha's birthday is being celebrated there. In Tokyo, Sony is shooting up by 9 per cent. The company increased its net profit by 34 per cent in the quarter under review and significantly exceeded estimates. Sumitomo Mitsui Trust Holdings also rose by around 9 per cent following a strong profit forecast.

U.S. government debt yields slipped on Wednesday. On the bond market, the 10-year US Treasury yield fell by 3 basis points to 4.449%. The 2-year US Treasury yield shed 3 basis points to 4.823%. Investors are awaiting Wednesday's release of the consumer price index (CPI) for April.

Price target Partners Group: JP Morgan upgrades to CHF 1308 (1252) - Neutral
Rating Holcim: Royal Bank of Canada starts with Sector Perform - Target CHF 91
Clariant: Julius Baer raises target price to CHF 14 (12) - Hold

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