On Tuesday, Swiss stocks showcased a commendable performance, with the Swiss Market Index closing up by 0.46%. Investors appear to brace themselves for the impending release of pivotal inflation data from the United States, a key indicator that may impact global market sentiment. Recent government data indicates that producer prices in the United States saw an increase of 2.2% year over year in July.
This figure stands in contrast to the upwardly revised gain of 2.7% in June and slightly below the consensus estimate which projected a 2.3% rise. Analysts at ING pointed out that this producer price index (PPI) data marks the first crucial inflation-related benchmark of the week for global equities, which have been on a gradual recovery path.
"Tomorrow's Consumer Price Index (CPI) will undoubtedly incite heightened foreign exchange volatility, with market attention likely fixated on the finer details of the month-over-month figures, where the consensus anticipates a 0.2% increase," the analysts noted. They remain optimistic that the data will align with the consensus expectations and support market predictions for a 100 basis points cut by the Federal Reserve by year-end. In the eurozone, the ZEW Indicator of Economic Sentiment experienced a significant decline, dropping to 17.9 points in August, down from 43.7 points in the previous month.
This latest reading is below market forecasts of 35.4, highlighting the region's growing economic concerns. Focusing back on the Swiss market, notable earnings reports were released by major companies, including the banking firm Swissquote Group and the laboratory instruments provider Tecan Group, both of which saw divergent outcomes.
Swissquote's share price surged by 2.98% as the company announced record net revenue and pretax profit for the first half of the year, totaling 316.9 million francs and 169.7 million francs, respectively, signifying year-over-year increases of 19.3% and 35.9%. Conversely, shares of Tecan Group plummeted by 17.28% following its announcement of a staggering 57.8% decline in profit to 22.5 million francs for the same period, coupled with a 13.7% decrease in sales to 467.2 million francs. In broader market news, the US Food and Drug Administration has given the green light to Galderma's product, Nemluvio (chemical name: nemolizumab), which is now approved as an injection for treating the chronic skin condition prurigo nodularis among adults.
The FDA is also in the process of reviewing a biologics license application for a monoclonal antibody targeting moderate-to-severe atopic dermatitis. Galderma’s stock experienced a minor uptick of 0.79% by the close of trading. Analysts at RBC Capital Markets express bullish sentiments regarding Galderma's future, stating, "We believe new products like nemolizumab and Relfydess are poised to drive low double-digit sales growth.
Moreover, the introduction of these products holds significant potential for margin expansion, suggesting an expected high teens EBITDA growth from 2023 to 2028, positioning Galderma as one of the fastest-growing entities within the HPC and Biopharma sectors." As the market continues to navigate through these developments, investors remain vigilant to the forthcoming data and its implications on both domestic and global economic landscapes..