Geberit generated slightly lower sales in the first half of 2024 but maintained its profit margin thanks to low raw material prices. In view of the strong Swiss franc and the slump in the construction industry, the sanitary technology group now expects sales for the year as a whole to be on a par with the previous year. Net sales fell by 1.4 per cent to CHF 1.64 billion in the first half of the year, as Geberit announced on Thursday. This includes negative currency effects totalling CHF 52 million. Adjusted for these, the increase in local currencies was 1.7 per cent. Compared to the organic decline of 1.4 per cent in the first quarter, momentum picked up significantly in the second quarter (+5.2 per cent). Volumes were slightly higher than in the weak prior-year period, as the decline in market demand was compensated for by the build-up of inventories, according to the business development report. In regional terms, currency-adjusted sales in the main region of Europe increased by 1.1 per cent. The Far East/Pacific (+6.0 per cent), America (+2.0 per cent) and Middle East/Africa (+9.4 per cent) regions also developed positively. The company's net profit fell by 5.0 per cent to CHF 350 million. Geberit is forecasting sales at the previous year's level and an unchanged EBITDA margin of around 29 per cent for 2024.

The Swiss stock market ended trading in the middle of the week with a strong gain, led by the substantial performance of UBS shares. The SMI even managed to recapture the 12,000-point mark. Thanks to stronger performance in the second quarter, particularly in the investment bank, UBS generated higher revenues and earnings than expected. In addition, the Swiss bank is making better progress than expected with the integration and reduction of costs following the takeover of rival Credit Suisse: UBS increased its cost-cutting target up until the end of the year. The share was the biggest winner in the SMI with a plus of 5.3 per cent. The SMI advanced by 1.2 per cent to 12,072 points, closing only slightly below its high for the day. Of the 20 SMI stocks, there were 19 gainers and 1 loser. A total of 17.75 (previously: 14.19) million shares were traded. The news that DrSmile was to be divested was well received by Straumann shareholders. The share price jumped by 13.3 per cent.

On Wednesday, the European stock markets rose for a second session following the announcement that inflation in the United States had eased, paving the way for the Federal Reserve (Fed) to cut interest rates next month. The Stoxx Europe 600 index gained 0.5% to 504.1 points. The CAC 40 and SBF 120 rose by 0.8% each. The DAX 40 in Frankfurt added 0.4% and the FTSE 100 climbed 0.6% in London. L'Oréal increased by 1% to 380.6 euros. Jefferies raised its recommendation concerning the world leader in cosmetics from ‘underperform’ to ‘hold’ and its target price from €362 to €365. Flutter Entertainment was one of the biggest performers after the quarterly figures, with a 10.5 per cent share price increase. Analysts had welcomed Flutter's strong second quarter and upwardly revised outlook. Davy highlighted the improvement in its US business. On average, earnings were expected to rise by 4 per cent, although there were some headwinds from higher taxes in Illinois.

The S&P 500 edged higher after fresh inflation data all but assured investors the Federal Reserve will cut interest rates next month. The broad-market index added 0.4% Wednesday, bringing its advance for the year to 14%. The Dow Jones Industrial Average rose 0.6%, or around 240 points. The tech-heavy Nasdaq Composite eked out a slight gain. Traders’ focus was squarely back on inflation during the session, with the consumer-price index for July showing price gains continuing to cool. The gauge rose 2.9% from a year earlier, the lowest reading since 2021 and slightly below economists’ expectations of 3%. A day earlier, a measure of the prices businesses receive for their goods and services also came in below economists’ expectations. It isn’t just easing price pressures that have investors convinced a rate cut is in store at the Fed’s September meeting. The central bank has a dual mandate to promote stable prices and full employment, and there have been recent signs of weakness in the labor market. Among individual stocks Wednesday, Kellanova shares jumped 7.8%—the best-performer in the S&P 500—after Mars said it would buy the Pringles maker. Shares for Victoria’s Secret climbed 16% after the lingerie retailer tapped Hillary Super, CEO of competitor Savage X Fenty, to be its next chief executive. Shares of Google parent Alphabet fell 2.3%, weighing on the S&P 500 and the Nasdaq Composite. Bloomberg and the New York Times have reported that Justice Department officials might ask a federal judge to order a breakup of the company. Tesla shares fell 3.1%. Investors are also keeping close watch on corporate earnings and how consumer spending is holding up. Home Depot cut its outlook this week, due to homeowners cooling spending. Walmart earnings are due Thursday before the opening bell.

Led by Japan and China, prices on the stock exchanges in Asia and Australia rose on Thursday. Most of the economic data reported from both countries was encouraging. In Tokyo, the Nikkei-225 climbed 0.9 per cent to 36,787 points. The Shanghai Composite gained 1.0 per cent and the HSI in Hong Kong climbed 0.3 per cent. While the large corporations Alibaba and JD will present their annual reports later in the day, Tencent Holdings has already reported. Sales and operating profit beat market expectations, yet the company is still looking for its place after recent regulatory tightening in the Chinese gaming market. The share price lost 0.5 per cent in Hong Kong. In Australia, the leading index increased by 0.2 per cent, while there was no trading in South Korea due to a public holiday.

Wednesday, the policy-sensitive U.S. 2-year Treasury yield inched up by one basis point to 3.954%, after July’s consumer-price index mostly met expectations and traders saw a reduced likelihood of a larger-than-usual rate cut from the Federal Reserve next month. The 10-year Treasury note yield fell by one basis point to 3.835%.

Target price Sandoz: Julius Baer raises to CHF 44 (39) - Buy
UBS lifts Henkel to 85 (84) EUR - Neutral
UBS upgrades United Internet to Buy (Neutral) - target EUR 24 (23.80)

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