Swiss equities exhibited resilience and maintained their positive trajectory as investors closely monitor the latest economic data and business surveys emerging from both the United States and Europe. On Thursday, the Swiss Market Index (SMI) experienced an impressive 0.56% uptick, aligning seamlessly with a regional rally taking place across European markets. The United States Bureau of Economic Analysis has released its second estimate, revealing a robust growth of 3% in real GDP on a yearly basis for the second quarter.
This substantial increase has been largely attributed to heightened consumer spending, coupled with robust private inventory investments and nonresidential fixed investments. Notably, this figure marks an improvement from an initial estimate of 2.8% and is significantly higher than the 1.4% rise recorded in the first quarter. Turning to the European economic landscape, the economic sentiment indicator within the euro area showed a slight improvement, reaching 96.6 in August, an increase from 96 a month prior.
In a similar vein, the employment expectations indicator rose to 99.2 from the previous 97.9. Concerning Germany, Europe’s largest economy, preliminary estimates indicate that the inflation rate has dipped to 1.9% in August, down from 2.3% in the preceding month and the 2.1% forecast. Berenberg, a leading financial firm, noted that "in Germany, the Eurozone's largest member state, EU-harmonised inflation fell to 2.0% year-over-year in August for the first time since March 2021." This decline in inflation could potentially prompt the European Central Bank (ECB) to consider a rate cut in the upcoming September meeting.
The firm added, "While we anticipate a slight uptick in both German and Eurozone inflation in the fourth quarter due to unfavorable base effects stemming from a reduction in energy prices late last year, the ECB will likely take a cautious approach and look past such temporary fluctuations." In a notable development within the corporate sector, GAM Holding, an asset management company with the ticker symbol ($GAM), announced plans to inaugurate its second office in the United States, specifically located in Miami's financial district.
This strategic move comes amid rising demand from offshore clients, as relayed by a spokesperson from GAM to Bloomberg News. However, the company's stock saw a decline of 2.07% at the close. Conversely, Galderma ($GALD) experienced a 1.58% increase following the successful issuance of its inaugural bond, which totaled 500 million Swiss francs in two distinct tranches.
The Swiss dermatology firm intends to utilize the proceeds for partial refinancing of an existing bank term loan and for general operational purposes. As the Swiss market continues to navigate through these economic indicators and corporate developments, both investors and analysts remain optimistic about future growth prospects in the region..