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Research Market strategy
by Swissquote Analysts
Morning News

Amazon Sales Surge Amid Pandemic-Driven Online Shopping

Topic of the day

Amazon.com Inc. online orders continue to surge during the Covid-19 pandemic, with the e-retail giant projecting a bumper end to the year as it posted strong third-quarter earnings. Amazon said third-quarter sales in the period rose 37% to a record $96.2 billion to generate a $6.3 billion profit, or $12.37 a share. Profit roughly tripled from the year-ago period when the company's bottom line was weighed down by heavy investment in its push to one-day shipping for customers. Wall Street expected sales of $92.8 billion and a net profit of $3.8 billion for the latest quarter, according to analysts surveyed by FactSet. The scale of online shopping during the pandemic at times has strained Amazon, driving up staffing and costs to get goods to customers. The company said it would add 100,000 seasonal workers in the U.S. and Canada heading into the Thanksgiving and Christmas holidays ahead of an expected increase in online orders.

Swiss stocks

After the previous day’s rout, the SMI was calmer Thursday, but still fell 0.6 percent to 9,556 points due to ongoing COVID-19 pandemic and lockdown worries. Markets were in waiting mode before US tech giants Alphabet, Amazon, Facebook and Apple released Q3 figures Tuesday evening and before the upcoming US presidential election, and ECB President Christine Lagarde prepared markets for more easing measures in December. Credit Suisse crashed 5.6 percent on posting financials slightly below market expectations but disappointing compared with UBS. Competitor UBS slid 0.2 percent. Swiss Re rose 0.7 percent, Zurich Insurance fell 0.3 percent. Swisscom rose 1.8 percent after posting higher profits and confirming its full-year outlook. Geberit fell 0.8 percent despite posting higher revenue and profits; it expects a weaker Q4. Clariant slid 2.4 percent despite exceeding EBITDA expectations and forecasting less impact from the pandemic in Q4 on lack of clarity about its long-term strategy.

International markets

Europe

European stocks close modestly lower and the Dow is flat as traders juggled the potential effect of more lockdowns with the prospect of more potential help for the eurozone economy. The Stoxx Europe 600 drops 0.1%, the FTSE 100 is down 0.02% and the CAC-40 falls 0.03%, while the DAX gains 0.3%. The European Central Bank intends to scale up its support of the eurozone's economy, seeking to cushion the region from the fallout of a new wave of coronavirus infections that threatens to knock back a currency area that was still recovering from spring lockdowns. A day after Europe's biggest economies, Germany and France, announced the toughest coronavirus restrictions since the spring, European Central Bank President Christine Lagarde said the bank intended to further expand its massive monetary stimulus in December. Shares in French telecommunications giant Orange jumped at market open Thursday after the company moved to reinstate its original dividend for 2020, while revenue for the third quarter rose ahead of expectations. Orange's board of directors backed the return to a 2020 dividend of 70 European cents a share ($0.82), which it slashed to EUR0.50 earlier in the year as companies reckoned with fallout from the coronavirus pandemic. Orange also said it would pay an interim dividend of EUR0.40 a share on Dec. 9, marking an increase of EUR0.10 from the amount it announced in July. Shares of Nokia (NOKIA.HE) slumped 13% in Helsinki after the telecom equipment maker lowered its 2020 guidance.

United States

U.S. stocks rose Thursday, rebounding after fresh data showed jobless claims dropped and the economy expanded sharply in the third quarter. The Dow Jones Industrial Average gained 139.16 points, or 0.5%, to 26659.11, snapping a four-session losing streak. The S&P 500 added 39.08 points, or 1.2%, to 3310.11. The Nasdaq Composite advanced 180.72 points, or 1.6%, to 11185.59. All three indexes are still on course for sharp weekly losses. The Cboe Volatility Index, a gauge of investors' expectations for swings in U.S. stocks, fell but remains near its highest level since June. Ford Motor Co. stock rallied late Wednesday after the auto maker surprised Wall Street with a $2 billion jump in quarterly profit, saying its focus on pickups and SUVs paid off and that it took advantage of "stronger" demand amid low inventory. Ford (F) said it earned $2.4 billion, or 60 cents a share, in the third quarter, compared with $400 million, or 11 cents a share, in the year-ago quarter. Adjusted for one-time items, the auto maker earned 65 cents a share, compared with 34 cents a share a year ago. Revenue rose to $37.5 billion from $37 billion a year ago. Analysts polled by FactSet had expected adjusted earnings of 20 cents a share on sales of $35.7 billion. Marvell Technology Group Ltd. (MRVL) said Thursday it has agreed to acquire Inphi Corp. (IPHI) in a cash and stock deal that will create a semiconductor company with an enterprise value of $40 billion. Under the terms of the deal, Marvell will pay $66 in cash and 2.323 shares for each Inphi share. Marvell shareholders will own 83% of the combined company, while Inphi shareholders own the remaining 17%. The deal is expected to close by the second half of 2021.

Asia

Investors sold off bonds, driving the benchmark 10-year Treasury yield to 0.81%, off the day's early low of 0.77%, a move likely reflecting risk-on optimism in the market as major stock indexes rally.

Bonds

Asian stocks sank Friday as investors looked ahead to next week's U.S. presidential election. Japanese stocks were down, weighed on by falls in pharmaceutical and electronic stocks. Earnings remained in focus with Mitsubishi Heavy Industries set to report its results later in the day. South Korea's Kospi was lower as well,, dragged down by retail and internet stocks. Sentiment remained negative on dimming hopes for a quick global economic recovery, as the U.S. and Europe struggle with the pandemic's resurgence

Analysis

IR rises the Dt. Bank target to 7,40 (6,70) EUR – Sell
JPM rises the Puma target to 87 (85) EUR – Overweight
UBS lowers the Beiersdorf target to 84 (85) EUR – Sell

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.

 
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