Tesla’s (+10%) vehicle sales slid for a second straight quarter but not as much as expected, lifting the company’s stock price and keeping Tesla ahead of rival BYD as the world’s largest seller of electric vehicles. The company said it delivered 443,956 vehicles globally in the three-month period, a 4.8% decline from the same quarter a year ago. The decline comes as Tesla is contending with lukewarm demand for its cars and intensifying competition. Tesla’s slowing growth underlines the challenges facing the broader industry. Other carmakers have rolled out dozens of new electric models, but demand has fallen short of initial expectations, despite falling prices and a spurt of low-interest and lease deals. The better-than-expected results boosted Tesla’s stock price by 10% in trading. Before the news, Tesla’s share price had declined 16% this year. Chief Executive Elon Musk is facing his greatest test in years as he tries to juggle the need to spend money on developing new and more affordable models while investing in pricey bets on robots and self-driving technology. The company is ramping up production of an updated Model 3 sedan and its newest model, the hulking Cybertruck, which costs $61,000 to $100,000. As sales continued to shrink, Tesla’s manufacturing volume fell sharply in the second quarter. The company produced 410,831 vehicles during the period, a 14% reduction from the prior year. The company, which plans to spend $10 billion on artificial-intelligence research this year, is expected to show off an autonomous robotaxi in August.

On Tuesday, the SMI lost 0.3 per cent to 12,011 points. Of the 20 SMI stocks, there were 12 losers and 7 gainers, with only UBS closing unchanged. A total of 18.19 million shares were traded (Monday: 15.19 million). Swiss Re brought up the rear in the leading index with a drop of 4.0 per cent. The share prices of other reinsurers in Europe declined more significantly. Reference was made on the trading floor to the hurricane season in the Caribbean and the risk of major losses. Zurich Insurance shed 1.2 per cent. The SMI was supported by the defensive heavyweight Nestlé (+0.7%). Partners Group (+2.0%), which had been the second-biggest loser the previous day following news of a takeover, topped the index. Richemont gained 0.4 per cent.

European stocks were in the red on Tuesday, weighed by political risk, and with investors wary that wider government deficits are likely in the U.S. and France, whoever wins the elections. The Stoxx Europe 600 index fell by 0.4% to 510.9 points. In Paris, the CAC 40 and SBF 120 lost 0.3% each ahead of Sunday's second round of parliamentary elections in France. The DAX 40 was down 0.7% in Frankfurt, while the FTSE 100 gave up 0.6% in London. Foodservices group Sodexo (-4.7%) confirmed its outlook for the financial year ending August 2024, following the publication of third-quarter sales in line with its expectations but slightly below analysts' forecasts. Teleperformance climbed 4.1% to 107.05 euros. Tyre manufacturer Michelin (-3.1%) warned that its sales volumes would fall more sharply than expected this year. Engie advanced 1% to €13.87. Carrefour (+0.9%) has completed the purchase of the Cora and Match chains in France from the Belgian group Louis Delhaize, on the basis of an enterprise value equivalent to €1.05 billion. Philippine airline Cebu Air has signed a memorandum of understanding with Airbus (+0.2%) to buy up to 152 aircraft from the manufacturer.

A jump in Tesla shares Tuesday helped the Nasdaq Composite and S&P 500 notch new highs on an otherwise quiet preholiday trading session. Major indexes fluttered between small gains and losses throughout the day, then veered higher before the closing bell. The tech-heavy Nasdaq edged up by 0.8%, for its 22nd record close of 2024, while the S&P 500 logged its 32nd of the year with a 0.6% increase. The Dow Jones Industrial Average advanced 0.4%, or 162 points. Stocks and bonds largely shrugged after Federal Reserve Chair Jerome Powell said the U.S. has made “a lot of progress” on inflation and Labor Department data suggested the jobs market is gradually cooling to prepandemic norms. Speaking at a conference in Portugal Tuesday, Powell stopped short of saying the rate cuts that Wall Street is clamouring for are now justified. “We want to be more confident that inflation is moving sustainably down…before we start the process of loosening policy,” he said. Investors have been gliding through a sparse stretch of economic and corporate data before earnings season kicks into gear. Meanwhile, Wall Street has begun considering the possible implications of a second Trump administration following President Biden’s widely panned debate performance last week. Traders in recent days have sold off U.S. government bonds, betting that proposed Trump policies including tax cuts could drive up deficits and inflation. In the event of a Republican sweep of the White House and Congress, some investors believe a flood of new debt could pressure bond markets and prop up borrowing costs. In the stock market, Tesla jumped after the company said vehicle deliveries slid for a second consecutive quarter—but not as much as analysts expected. Shares surged 10%, extending their winning streak to six days. Aside from Nvidia, every other member of the so-called Magnificent Seven also logged gains. U.S. markets will have a shortened trading session Wednesday and will be closed Thursday for the Fourth of July holiday. On Friday, economists expect the monthly jobs report to show about 200,000 positions were added in June.

In Asia, major indexes broadly closed with gains on Wednesday. In Japan, the yen stabilised near its 38-year low, but did not recover from the recent slump. The weakness of the yen continues to support the stock market, where the Nikkei-225 advances by a further 1.1 per cent to 40,512 points, bringing the all-time high within striking distance. Weighed down by software and property stocks, the Shanghai Composite lost 0.4 per cent. Sentiment in Hong Kong brightened, with the HSI rising by 1.2 per cent. Meanwhile, the Kospi in South Korea increased by 0.5 per cent - fuelled by battery and automotive stocks. Following the Tesla rally in the USA, the share prices of battery manufacturers LG Energy Solution and Samsung SDI jump by 4.8 and 2.1 per cent respectively.

U.S. government debt yields slipped on Wednesday. The 10-year U.S. Treasury note yield fell by 3 basis points to 4.435%. The 2-year Treasury note yield declined by one basis point to 4.749%. On Tuesday, the market estimated a 63% probability of a Fed rate cut of 25 basis points in September, according to CME Group's FedWatch tool.

Price target Roche: Jefferies upgrades to CHF 250 (240) - Hold
Price target Galderma: Goldman Sachs lowers to CHF 81 (82) - Buy
Rating Kuehne+Nagel: Barclays raises to Equal Weight (UW) - Target CHF 255 (210)

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