ABB has reported a strong increase in fourth-quarter profits and sales, with momentum in the Electrification business continuing to drive results. The Swiss industrial technology company said on Thursday that fourth-quarter net profit was up to $987 million from $921 million a year earlier, on like-for-like sales up 4% to $8.59 billion. The results exceeded analysts' expectations, based on the company's own consensus of net profit of $960 million and sales of $8.37 billion. Operating profit before interest, tax, depreciation and amortisation rose by 9% on a like-for-like basis to $1.43 billion, with the margin increasing to 16.7% from 16.3%. This figure also topped the $1.42 billion expected, according to the same consensus. For the next quarter, the company is targeting like-for-like sales growth of around 5% and a broadly stable year-on-year operating Ebita margin.

The recent upward trend on the Swiss stock market continued in the middle of the week. The SMI reached a new high for the year. A better-than-expected reporting season so far provided support, as did the recovery in the technology sector after headlines about the Chinese AI model Deepseek triggered a sell-off in AI shares. Good business figures from ASML provided support here. In line with this, the recently battered shares of ABB were the day's winner in the SMI with a gain of 2.2 per cent. The company will present its results for the fourth quarter on Thursday morning. The SMI improved by 0.6 per cent to 12,530 points. Among the 20 SMI stocks, there were 16 winners and four losers. A total of 19.38 (previously: 22.36) million shares were traded. Among the individual stocks, Logitech shares gained 7.6 per cent. Richemont shares rose by 1.4 per cent. Roche shares increased by 0.2 per cent in the run-up to the announcement of its financial figures for 2024 on Thursday. The annual results of Novartis (+1.1 per cent) will follow on Friday.

Europe
On Wednesday, the European stock markets rose across the board, with the exception of Paris, penalised by the luxury goods sector following disappointing results from LVMH, the world leader in the sector. The Stoxx Europe 600 index gained 0.5% to 534.3 points. The DAX 40 added 1% in Frankfurt and the FTSE 100 advanced 0.3% in London. By contrast, the CAC 40 and the SBF 120 each fell by 0.3%. LUXURY: the world's number one luxury goods company LVMH slumped 5% after the publication of its results for the final quarter of 2024. ‘The slight improvement in organic sales performance in the fourth quarter was offset by a margin slightly below expectations (already revised downwards),’ analysts at RBC Capital pointed out. In the wake of LVMH, Rémy Cointreau dropped 7.4%, Kering lost 5.4% and L'Oréal shed 3.1%. SEMI-CONDUCTORS: shares in European semiconductor manufacturers rebounded on Wednesday, as orders from Dutch group ASML exceeded analysts' expectations in the fourth quarter of 2024, thanks to the boom in artificial intelligence. In Amsterdam, ASML jumped 5.6% and ASM International gained 3.2%. Soitec and STMicroelectronics pocketed 2.6% and 0.8% respectively on the Paris Bourse.

United States
Stocks edged lower after the Federal Reserve, as widely expected, paused its recent stretch of interest-rate cuts and signaled it was in more of a wait-and-see mode for subsequent moves. The Dow Jones Industrial Average slipped 0.3%, or 137 points with the S&P 500 and Nasdaq Composite both down 0.5%. Traders remain concerned that inflation will persist above the Fed’s 2% target and that Treasury bond yields will keep rising without a cut in interest rates. AI bulls had something to cheer about in Europe as ASML, the Dutch supplier of chip-making equipment, said orders had outstripped expectations in the final quarter of 2024. Earnings boosted shares in T-Mobile US, F5 and Starbucks, while Danaher stock fell and Nvidia’s slide continued. President Trump’s social-media company, Trump Media, surged on plans to move into financial services. Chinese e-commerce giant Alibaba has released a new version of its AI model, claiming that it outshines Deepseek's AI model with its performance in various categories. The depositary receipts (ADR) rose by 0.7 per cent. In the solar sector, Nextracker surged by 24.3 per cent following an improved forecast for 2025.

Asia
The Nikkei-225 in Tokyo improved by 0.1 per cent to 39,440 points on Thursday. Elsewhere, business is paused on the occasion of the Chinese New Year celebrations. Work will resume in Seoul on Friday, in Hong Kong on Monday and in Shanghai on Wednesday. Among the individual stocks, Softbank's share price is again lower after the recent recovery gains following the Deepseek shock at the start of the week, falling by 1.2 per cent. According to sources, the technology investor is in talks to invest 15 to 25 billion dollars in OpenAI and would thus overtake Microsoft, which has so far invested almost 14 billion dollars. Honda fell by 1.4 per cent. The car manufacturer has decided to recall almost 300,000 cars in the USA due to software problems. The quarterly figures presented by Japan Exchange in the course of trading caused disappointment, with the share price falling by a good 6 per cent. Sumitomo Mitsui Financial (-1.0%) also reacted negatively to its nine-month annual report. Advantest, on the other hand, rose by 2.5 per cent after the end of trading in Tokyo following the presentation of its figures the previous day.

Bonds
U.S. Government bond yields climbed after Fed officials indicated comfort with their interest-rate stance for an economy where inflation remains somewhat above their goal and where labor market conditions have been solid. The 10-year Treasury note yield oscillated around 4.55%. The 2-year Treasury note yield increased by 3 basis points to 4.23%.

Analysis
Vontobel upgrades Logitech target to CHF 101 (98) - Buy
Warburg lowers DocMorris target to CHF 33 (50) - Hold
Vontobel downgrades Nestle target to CHF 95 (100) - Buy

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