Swiss stocks saw a modest recovery on Wednesday, with the Swiss Market Index finishing 0.10% higher at the close of trading. However, indicators suggest underlying economic concerns for the nation. The economic sentiment index in Switzerland experienced a decline, dropping to -12.4 points in November from -7.7 points in October.
This shift highlights a growing pessimism regarding the country's economic growth, as shown in recent data from UBS and CFA Society Switzerland. Meanwhile, across the Atlantic, the annual PCE price index in the United States increased by 2.3% year over year in October, a slight uptick from the 2.1% recorded in September.
The core PCE price index also climbed by 0.3% in October, aligning with consensus expectations and maintaining September's levels. Back in Switzerland, shares of Nestlé rose by 0.69% after Morgan Stanley upgraded its rating on the Swiss consumer goods giant from underweight to equal weight, while also lowering its price target from 80 francs to 76 francs.
Analysts predict that Nestlé's shares will remain relatively stable, even amid weaker organic sales growth. Morgan Stanley commented, “Having materially derated on the back of poor results, we think the shares have found a reasonable level, reflecting OSG remaining below the European Staples average for at least the next year.
Estimates remain a touch high, we think, but we believe the buyside already anticipates this. We think the company's plan to reinvest in marketing and digital is a positive, but that it will take time to have an impact. With valuation multiples now broadly in line with European Staples, we believe the period of meaningful underperformance is over.” In additional corporate developments, Novartis received approval from the European Commission for Kisqali, to be used in combination with an aromatase inhibitor for treating patients with hormone receptor-positive, HER2-negative early breast cancer who are at high risk of recurrence.
A regulatory review for the drug is proceeding globally, contributing to a 0.89% increase in the Swiss drugmaker's stock at market close..