Swiss stocks demonstrated a robust recovery on Friday, with the Swiss Market Index concluding the trading week up by 1.48%. The market's positive momentum can be attributed to favorable economic indicators, particularly Switzerland's annual inflation rate, which registered at 0.6% in October. This marks a decrease from the previous figure of 0.8% in September, representing the lowest level in over three years and falling short of market expectations of 0.8%.
Additionally, a slight decline in the consumer price index of 0.1% on a monthly basis has contributed to this optimistic outlook. In the manufacturing sector, the Purchasing Managers' Index (PMI) stood at 49.9 in October, indicating stability compared to previous readings and slightly surpassing consensus estimates of 49.8.
In retail, seasonally adjusted sales experienced a year-over-year increase of 2.2% in September, though this is slightly down from the revised 2.7% growth recorded in August. On the labor front, the KOF Employment Indicator inched up to 3.9 points in the fourth quarter, a moderate increase from 3.8 points in the prior quarter.
This rise points to stable employment levels in Switzerland for the upcoming months. KOF remarked, "There are hardly any changes in the individual sectors either. The indicator value suggests that employment in Switzerland will continue to perform well over the coming months." In the United States, labor market data revealed the creation of only 12,000 jobs in October; a sharp decline from the downwardly revised 223,000 jobs in September and below the market forecast of 113,000.
Nevertheless, the unemployment rate remained constant at 4.1%. Economists commented, "We knew strikes were going to subtract 44k from the total, but we were somewhat in the dark on the hurricane hit," noting the impact on job creation. They further added, "Given the inflation backdrop is less threatening and the Fed is putting more emphasis on jobs, today's report cements expectations for a 25bp Fed rate cut next week.
We anticipate another 25bp rate cut in December." In corporate developments, SFS Group, known for its precision components and fastening technology, acquired Pro Fastening Systems. This strategic move is set to enhance its market presence in the Midwestern United States, resulting in a 1.13% increase in its stock price at closing.
Simultaneously, real estate firm Allreal's stock also saw a rise of 1.56%, following the approval of building permission for its Panorama Eggen residential development project in Lucerne, Switzerland, with construction set to begin in early 2025..