Federal Reserve Chair Jerome Powell still sees a soft landing ahead for the U.S. economy, aided by the central bank shifting interest rates lower. That process started with a September rate cut and will include further “recalibration” as incoming economic data dictates, Powell said on Monday. “With an appropriate recalibration of our policy stance, strength in the labor market can be maintained in an environment of moderate economic growth and inflation moving sustainably down to our objective,” Powell said in prepared remarks for a Monday address at the annual meeting of the National Association for Business Economics in Nashville, Tenn. “Overall, the economy is in solid shape; we intend to use our tools to keep it there,” Powell said. The Fed chair said that if the economy continues on its current course, he expects to see two more quarter-point interest-rate cuts this year. Markets have been betting on a more aggressive cutting cycle.

The Switzerland market ended weak on Monday after moving in a tight band right through the day's session as weak global markets and concerns about rising geopolitical tensions rendered the mood bearish. Investors awaited Swiss and Eurozone inflation data. The benchmark SMI, which moved in a range of just 55 points, ended with a loss of 65.18 points or 0.53% at 12,168.87, the session's low. Adecco ended nearly 2% down, and Geberit lost about 1.7%. Julius Baer and Schindler Ps closed down 1.47% and 1.35%, respectively. SGS, Lindt & Spruengli, Novartis, ABB, Swiss Life Holding, Holcim, UBS Group, Lonza Group, Swiss Re, Richemont and Zurich Insurance Group lost 0.5 to 1%. SIG Group advanced nearly 2%. Givaudan, Logitech International and Swatch Group gained 0.6 to 0.7%. Sonova ended with a modest gain. In economic news, a measure signaling future turning points in the Swiss economy strengthened in September, reflecting a recovery tendency on path in the economy, the results of a survey by the KOF Swiss Economic Institute showed. The economic barometer climbed 101.5 in September from an upwardly revised 105.0 in August. Economists had forecast a score of 101.0.

European stocks closed on a weak note on Monday, weighed down by concerns about escalating geopolitical tensions, and profit taking after recent gains. Automobile sector stocks were among the major losers. The pan European Stoxx 600 fell 0.98%. The U.K.'s FTSE 100 dropped 1.01%, Germany's DAX ended down 0.76% and France's CAC 40 closed down 2%. Switzerland's SMI ended lower by 0.53%. Among other markets in Europe, Belgium, Denmark, Finland, Greece, Netherlands, Poland, Portugal, Spain, Sweden and Turkiye closed weak. Russia edged down marginally, while Austria, Iceland and Norway ended higher. In the UK market, RightMove slid 7.7% after the British online property website rejected a £6.2bn takeover offer by Rupert Murdoch's Australian property group. Smiths Group, ICG, Frasers Group, EasyJet, IMI, Rentokil Initial, Melrose Industries, IAG, Entain and Endeavour Mining lost 3 to 5%. In the German market, Volkswagen declined sharply after cutting its 2024 outlook. Porsche, Infineon, Puma, Continental, Mercedes-Benz, BMW, Daimler Truck Holding, RWE, Merck, BASF, Qiagen, HeidelbergCement and Adidas closed down 1 to 4.3%.

Stocks showed a lack of direction over the course of the trading session on Monday before eventually ending the day mostly higher. The major averages all finished the day in positive territory following the mixed performance seen last Friday. The Dow inched up 17.15 points or less than a tenth of a percent to a new record closing high of 42,330.15, while the Nasdaq climbed 69.58 points or 0.4 percent to 18,189.17. The S&P 500 also rose 24.31 points or 0.4 percent to a new record closing high of 5,762.48. Stocks initially came under pressure in reaction to remarks by Federal Reserve Chair Jerome Powell before rebounding going into the close. The Fed's next monetary policy meeting is scheduled for November 6-7, with CME Group's FedWatch Tool currently indicating a 65.3 percent chance the central bank will lower rates by 25 basis points and a 34.7 percent chance of another 50 basis point rate cut. Despite the advance by the broader markets, most of the major sectors ended the day showing only modest moves. Shares of Apple Inc. surged Monday, enough to put them into positive territory for the month, after J.P. Morgan made an upbeat call on iPhone availability, with improvement led by the base 16 models. PepsiCo is in advanced talks to acquire tortilla-chip maker Siete Foods for more than $1 billion, according to people familiar with the matter. A deal for the closely held business could be announced soon, provided the talks don’t fall apart, the people said.

The Tokyo stock exchange is on the road to recovery on Tuesday. The Nikkei 225 index rose by 2.0 per cent to 38,687 points. On Monday, speculation that Prime Minister-designate Ishiba could raise taxes and cut spending and also support the tightening program introduced by the Japanese central bank weighed heavily on sentiment.

In the U.S. bond market, treasuries came under pressure in reaction to Powell's remarks. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 5.3 basis points to 3.802 percent.

UBS raises DSM-Firmenich to EUR 137 (133) – Buy
Deutsche Bank lowers Forvia to EUR 15 (18) – Buy
ING lowers Heineken to EUR 64.62 (69.54) – Sell

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