The Swiss Market Index (SMI) experienced a notable advance on Thursday, concluding the trading session with a 0.65% increase. This uptick comes as investors closely examine the latest gross domestic product (GDP) figures from Switzerland, alongside significant economic data emerging from the United States. According to preliminary estimates released by the State Secretariat for Economic Affairs, Switzerland's GDP expanded by 0.5% in the second quarter.
This 'slightly above-average' growth can primarily be attributed to the robust performance of the industrial sector, while the services sector also contributed positively to the overall economic growth witnessed this period. In parallel, data from the Federal Statistical Office indicated that the country's producer and import price index remained stable on a month-over-month basis in July, defying market expectations which had forecasted a 0.2% increase.
Year-over-year, Swiss producer and import prices observed a decline of 1.7%, aligning with analyst predictions and reflecting a decrease from June's decline of 1.9%. Shifting focus to the United States, retail sales figures surged by 1% month-over-month in July, rebounding from a downwardly revised decline of 0.2% in June.
Additionally, jobless claims saw a dip, falling to 227,000 during the week ending August 10, a decrease from the upwardly adjusted figure of 234,000 from the previous week. Analysts at ING expressed that, "Stronger retail sales and jobless claims numbers have provided evidence to suggest a 25 basis points cut at the September Federal Open Market Committee (FOMC) meeting now appears more plausible than a 50 basis points reduction." They further noted, however, that with Federal Reserve officials placing increasing emphasis on labor market dynamics, the forthcoming jobs report on September 6 will play a pivotal role in determining future monetary policy decisions. Returning to Switzerland, two notable companies that reported their earnings included Geberit, a manufacturer of sanitary products, and Basler Kantonalbank.
Geberit experienced a decline of 1.82% following a year-over-year drop in net income, which fell to 350 million francs from 369 million francs, while net sales decreased to 1.64 billion francs from 1.66 billion francs. The company has projected that its net sales in local currencies for the full fiscal year of 2024 will be approximately on par with the previous year. In other corporate developments, a consortium led by investment manager Sixth Street Partners has reportedly reached an agreement to purchase the mortgage servicing division of UBS Group's Credit Suisse, as reported by Bloomberg News.
During its recent second-quarter earnings call, UBS acknowledged an agreement to sell this business unit but refrained from identifying the prospective buyer. As a result, UBS shares closed down 1.02% for the day. Swiss Market Index participants are keenly observing these shifts in corporate performance and macroeconomic indicators, which will undoubtedly influence market sentiment in the coming weeks..