Atos slashed its revenue and earnings forecasts through 2027 as clients cancel or delay signing new contracts while the beleaguered French IT company seeks to implement a financial restructuring aimed at restoring profitability. The group said the cuts were necessary as it faces soft demand in some business areas, with customers exercising caution before inking deals with a company that is awaiting a liquidity injection from banks and bondholders. Atos now expects to close the year with 9.73 billion euros ($10.75 billion) in revenue, down from a previous forecast of 9.76 billion euros. That is projected to grow to 10.61 billion euros in 2027, down from the 11.05 billion euros previously expected. Meanwhile, operating profit should come in at 238 million euros this year compared with a previous estimate of 282 million euros. That figure is expected to climb to 999 million euros in 2027, below a prior forecast of nearly 1.10 billion euros.

Despite languishing in negative territory till about an hour before the closing bell, the Switzerland market ended slightly up on Monday with a few top stocks finding some support in the final minutes ot the day's session. The benchmark SMI ended with a gain of 14.89 points or 0.12% at 12,451.48. The index touched a low of 12,367.29 in the session. Swisscom gained 1.21%. Zurich Insurance Group ended nearly 1% up. VAT Group, Lindt & Spruengli, ABB, Schindler Ps, Novartis, Kuehne + Nagel, Holcim and Geberit advanced 0.4 to 0.75%. Sandoz Group, Straumann Holding, SIG Group and Lonza Group ended down 1.2 to 1.47%. Julius Baer drifted down 0.81%, while Swatch Group, Logitech International, SGS, Nestle and Sonova ended down 0.4 to 0.6%. In economic news, retail sales in Switzerland unexpectedly grew 2.7% year-on-year in July 2024, easily beating market forecasts of a 0.2 % fall, and recovering from an upwardly revised revised 2.6% drop in June, data from the Federal Statistical Office showed. It marked the first increase in retail sales since April and the fastest pace since February 2022. Compared to the previous month, retail sales unexpectedly rose 1.4% in July, the most in 13 months, rebounding from an upwardly revised 0.3% fall in June. The Swiss procure.ch and Credit Suisse Manufacturing PMI rose to 49 in August 2024, compared to the previous month's and market estimates of 43.5. This marked the 20th consecutive period of contraction, although the softest since January 2023.

Europe
European stocks closed on a mixed note on Monday, continuing to digest last week's economic data, and looking ahead to more updates to assess the outlook for global growth and the interest rate trajectory of major central banks. Data showing continued contraction in eurozone manufacturing activity weighed on sentiment. The HCOB final manufacturing Purchasing Managers' Index posted 45.8 in August, unchanged from June and July, final data from S&P Global showed. The August reading was revised up from 45.6. The score signaled another sharp deterioration in operating conditions. The reading remained below the threshold 50.0 mark since July 2022. Elsewhere, the U.K. manufacturing PMI was finalized at 52.5 in August, up from July's 52.1 and hitting a 26-month high as a result of rising output, new orders and employment. The pan European Stoxx 600 edged down 0.02%. The U.K.'s FTSE 100 ended down 0.15%, while Germany's DAX and France's CAC 40 gained 0.13% and 0.2%, respectively. Switzerland's SMI closed up 0.12%. Among other markets in Europe, Austria, Finland, Greece, Netherlands, Poland and Portugal ended higher. Denmark, Iceland, Norway, Russia and Sweden closed weak, while Belgium and Spain ended flat. In the UK market, RightMove soared 27.5% as Australian digital advertising company REA Group confirmed that it is considering a possible cash and share offer for the British real estate online portal. Barratt Developments and Auto Trader Group both gained more than 3%, with the former surging on a rating upgrade by UBS. Beazley, Vodafone Group, Sainsbury (J), Berkeley Group Holdings, Whitbread, Segro, IHG, Mondi and IMI advanced 1 to 2%. Rolls-Royce Holdings dropped about 6.5%. BAE Systems and JD Sports Fashion lost 2.8% and 2.25%, respectively. Endeavour Mining, B&M European Value Retail, Rio Tinto, Croda International, Weir Group, Halma, Entain and Standard Chartered lost 1 to 1.7%. In the German market, Vonovia gained about 2%. Deutsche Post, Volkswagen and Munich RE climed 1.3 to 1.5%. SAP, Deutsche Telekom, Bayer, Hannover Rueck and HeidelbergCement also closed higher. Sartorius ended down 4.65%. Zalando and Rheinmetall lost about 2.9% and 2.7%, respectively. Daimler Truck Holding, Porsche, MTU Aero Engines and Adidas also ended notably lower.

United States
Business is very quiet overall due to the ‘Labour Day’ holiday in the USA.

Asia
Even in the absence of any guidance from Wall Street, where there was no work on Monday due to the public holiday, there was little action on the stock markets in East Asia and Australia on Tuesday. Overall, the trend is just about unchanged. The biggest losses are on the stock exchanges in Hong Kong and Shanghai, with losses of up to 0.5 per cent. The most recent, mixed purchasing managers' data could still have a slightly negative impact here. According to economists, they continue to indicate that government stimuli are necessary to boost consumption. However, the markets have so far been waiting in vain for this. In Tokyo, the Nikkei 225 index fell by 0.2 per cent to 38,634 points, while the indices in Seoul and Sydney were also just below the previous day's levels.

Bonds
Rising yields on international sovereign debt and the scale of new corporate bond issuance last week weighed on yields on investment grade corporate bonds denominated in euros and sterling, say analysts at CreditSights. Yield spreads on euro-denominated high-yield debt have narrowed, however, due to increased expectations of interest rate cuts following the deceleration in headline inflation in the eurozone, the analysts say.

Analysis
Deutsche Bank lowers Nestle target to CHF 90 (95) – Hold
UBS lowers Signify target to EUR 23 (30) – Neutral
Deutsche Bank lowers Curevac target to USD 3.90 (5) – Hold

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