GE Increases Massive Debt Repurchase To $25B
Topic of the day
General Electric increased its huge debt tender to $25B from $23B. By the end of this year, GE expects to have cut its gross debt by more than $80B since the end of 2018, up from the previous plan of $75B. The repurchase was already the largest in the history of the capital markets, eclipsing AB Inbev's $16B in 2019. More than $33B in debt was tendered as of Wednesday night with GE accepting $25B for purchase using cash from divesting its jet leasing business earlier this month. The debt cut is the latest move by GE to shore up its balance sheet in recent years and is central to its decision to split into three separate companies.
The Swiss stock market ended trading on Friday with heavy losses. The SMI lost 2.0 percent to 12,199 points. Among the 20 SMI stocks, there were 17 price losers and 3 price winners. 56.57 (previously: 18.72) million shares were traded. Meanwhile, the Lonza share (+3.1%) saw a strong upward trend, as the pharmaceutical supplier produces the active ingredient for the Covid 19 vaccine of the US group Moderna. And demand for the vaccine is now likely to increase significantly. Home office equipment supplier Logitech also benefited, with gains of 4.0 percent. Substantial selling pressure was exerted in particular on cyclically sensitive stocks. Among financial stocks, UBS slumped 5.8 percent, Credit Suisse fell 3.5 percent. Insurance stocks also sold off: Swiss Re (-4.2%), Swiss Life (-2.9%), Zurich Insurance (-3.3%). Luxury stocks did not fare any better. Richemont slipped 5.1 percent, Swatch slumped as much as 7.1 percent. Shares of index heavyweight Nestle dropped 1.3 percent. Among the pharmaceutical giants, Roche closed 1.0 percent lower, Novartis fell by 2.4 percent.
Overseas, European stock markets tumbled. Losses for travel, leisure, banking and energy stocks—all of which suffered during previous periods of economic turmoil in the pandemic—led the Stoxx Europe 600 to shed 3.7% to 464.1 points. In Paris, the CAC 40 and the SBF 120 dropped 4.8% and 4.5%, respectively. In Frankfurt, the DAX 40 dropped 4.2% and in London, the FTSE 100 lost 3.6%. South African scientists announced on Thursday the discovery of this new variant, named for the moment B.1.1.529, and cases have been detected in other countries and continents, notably in Hong Kong, Israel and Belgium. According to the World Health Organization (WHO), the high number of mutations could make the disease more transmissible and potentially more resistant to vaccines, although it is too early to determine with certainty how this variant will spread or how it will affect infected individuals. Tourism and airline stocks fell on fears that health restrictions will be tightened to contain the new variant. In Paris, Airbus fell 11.5%, Accor lost 8.9%, and Aéroports de Paris gave up 8.6% and Air France-KLM dropped 9.6%. The other major European airlines, including IAG and Lufthansa, all lost between 8.7% and 13%. Shopping center operators also suffered heavy falls. Unibail-Rodamco-Westfield fell 11.9%, Klépierre 8.9%. Vaccine manufacturers and other health care stocks, on the other hand, were in demand. Valneva rose by 8.9%, Eurofins by 7.9%, Sartortius Stedim by 7.2% and bioMérieux by 4.8%.
Stocks, oil prices and government-bond yields slumped after South Africa raised the alarm over a fast-spreading strain of the coronavirus, triggering concern that travel restrictions and other curbs will spoil the global economy’s recovery. The Dow Jones Industrial Average fell 905.04 points, or 2.5%, to 34899.34. It was the Dow’s biggest one-day percentage drop since October 2020. The S&P 500 lost 106.84 points, or 2.3%, to 4594.62 and the Nasdaq Composite dropped 353.57 points, or 2.2%, to 15491.66. It was the worst Black Friday session on record for all three indexes. Markets closed early because of the holiday. U.S. crude oil tumbled 13% to $68.15. Traders fretted that lockdowns could reduce demand for transportation fuels. Bitcoin, following the path of other risk assets, skidded lower. Delta Air Lines, United Airlines and American Airlines Group all dropped 8% or more, after the U.K., Israel and Singapore restricted travel from southern Africa. The European Union said it would propose stopping air travel from the region. Cruise stocks including Royal Caribbean Group were hammered, while Exxon Mobil fell 3.5%, or $2.23, to $61.25. Chevron fell 2.3%, or $2.68, to $114.51. Moderna rose 21%, or $56.24, to $329.63. Pfizer gained 6.1%, or $3.11. to $54. Netflix and DoorDash, which previously benefited from stay-at-home orders, rose 1.1% and 1.6%, respectively. The World Health Organization on Friday said the new strain Omicron was a “variant of concern.” Rising caseloads of other variants have already led some European countries to tighten rules for transportation, shopping and workplaces.
Stock markets in Asia closed with significant reductions in view of the new mutated Omikron coronavirus on Monday. Japan’s Nikkei 225 index fell 1.4%. The Hang Seng in Hong Kong lost 1.0 percent. Shares of the casino operator Galaxy Entertainment Group slumped 7.8 percent. The shares of resort developer Sands China fell 6.3 percent. The Kospi in South Korea lost 1.1 percent. Across the region, airline stocks continue to face selling pressure due to fears of travel restrictions. In Japan, Japan Airlines fell 3.7 percent and ANA Holdings lost 4.1 percent. In Hong Kong, Cathay Pacific dropped by 3.4 percent. In South Korea, Korean Air Lines shed 1.1 percent.
Long-dated U.S. government debt yields were headed sharply lower in thin trading on Black Friday, as investors piled into government debt in a flight to safety sparked by fears of Omicron, the fast-spreading variant of the coronavirus that causes COVID-19. As investors reached for safe havens, the yield on the 10-year U.S. Treasury bond tumbled more than 13 basis points to 1.506%, from 1.641% Wednesday night. Bond markets were closed Thursday in the United States due to Thanksgiving.
UBS lifts Easyjet to Buy (Neutral) - Target 760 p
Bryan Garnier raises Remy target to EUR 176 (145) - Sell
Warburg lowers Co.don target to EUR 4.20 (6.60) - Buy
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.