Swiss stocks initiated the new trading week on a positive note, reflecting optimism in the market as investors look forward to the upcoming US Federal Reserve's economic symposium. The Swiss Market Index (SMI) achieved a notable increase, closing 0.71% higher on Monday, marking a favorable start amidst a relatively uneventful day of domestic economic reports. As we transition into the latter part of August, all eyes are set on the Jackson Hole Economic Symposium scheduled from Thursday evening through Saturday.
Analysts at Deutsche Bank highlighted that this event is pivotal for investors. They indicated that market participants are on high alert for indications regarding the timing and magnitude of potential rate cuts, particularly from Fed Chair Jerome Powell's address. While the economists from Deutsche Bank do not foresee a definitive commitment to a specific rate cut trajectory from Powell, they anticipate he will convey that the Fed is gaining the necessary confidence to consider easing monetary policy soon.
Such rate cuts would be supported by the Fed's dual mandate, addressing both maximum employment and stable prices. In parallel, the Swiss National Bank (SNB) is preparing to adjust the threshold factor for sight deposit remuneration from 25 to 22, effective October 1. This change implies that sight deposits up to this threshold will accrue interest at the central bank's policy rate, while those exceeding this threshold will experience a reduction in interest earnings.
Furthermore, deposits leveraged to meet minimum reserve requirements will not earn any interest. The Swiss National Bank indicated that these thresholds are anticipated to escalate in the next three years, following the introduction of increased minimum reserve requisites that came into play in July. On the corporate landscape, Holcim saw its shares ascend by 1.90% after Deutsche Bank upgraded its rating from hold to buy, along with a raised price target from 81 francs to 91 francs.
Analysts attributed this upgrade to the Swiss building materials company's robust value creation initiatives, particularly as it prepares for a potential listing in the US market. Holcim's strong foothold in the North American cement sector and its significant advancements in the roofing market over the past three years reflect its competitive edge.
The company has voiced expectations to conduct its US listing in the first half of 2025. Conversely, Metall Zug experienced a decline in its stock prices, dropping by 1.18% following the announcement of its first-half financial results. The industrial holding company reported a decrease in net sales, which fell to 181.2 million francs from the previous year's 228.4 million francs, attributing this drop to a challenging market environment.
However, Metall Zug reported a rise in net income, climbing to 56.6 million francs from 12.6 million francs over the same period, suggesting resilience in its earnings despite lower sales figures..