Swiss stocks commenced the new trading week on a negative note as the market prepares for crucial inflation and economic data releases anticipated in Europe and the US in the coming days. The Swiss Market Index (SMI) closed down by 0.76% on Monday, reflecting investor caution ahead of significant economic indicators. "On Wednesday, the key focus will be the December US and UK Consumer Price Index (CPI) inflation releases.
Aligning with the consensus forecast, we predict a 0.3% month-over-month increase in US consumer prices for the second consecutive month," analysts at Daiwa Europe commented. "In the UK, after reaching an eight-month high in November at 2.6% year-over-year, we expect a slight reduction in the headline inflation rate for December, decreasing by 0.1 percentage points to 2.5% year-over-year, consistent with the Bank of England's forecast for the month." Turning to Switzerland, recent data indicates that the consumer sentiment index improved, increasing to -30.3 points in December 2024, compared to -37.2 points in the preceding month and surpassing consensus estimates of -35 points.
This marks a substantial recovery from a more pessimistic -44.4 points in December 2023. In corporate developments, the US Court of Appeals for the Federal Circuit upheld the validity of the combination patent for Novartis' heart failure medication, Entresto. The Swiss pharmaceutical powerhouse plans to enforce its patent rights during the pediatric exclusivity period, which is set to expire in July.
As a result, Novartis shares closed down by 0.33%. Conversely, Eli Lilly experienced a robust upswing, with its shares soaring by 5% after it was announced that the company has agreed to acquire Scorpion Therapeutics' STX-478, an oral mutant-selective PI3Kα inhibitor that is currently being evaluated for breast cancer and other advanced solid tumors.
Eli Lilly will commit up to $2.5 billion for this transaction. Following the deal, Scorpion will establish a new independent entity, and Eli Lilly is expected to retain a minority equity stake in this new venture. Overall, the market shows mixed signals as corporations adapt to the evolving economic landscape, with investor focus keenly set on upcoming inflation indicators that could impact future monetary policies..