Delta (-1%) warned that Americans are likely to cut their travel spending in the run-up to November’s presidential election. Delta Air Lines revealed the dollars-and-cents impact of the CrowdStrike outage on Thursday, and issued a soft fourth-quarter outlook that appears to have disappointed investors. The legacy carrier said in an earnings report that the tech glitch, which crippled Microsoft computers worldwide and forced it to ground about 7,000 flights over a five-day period in July, had cost it $380 million in revenue and 45 cents a share in profit over the three months ended Sept. 30. Delta also forecast earnings of between $1.60 and $1.85 a share for the current quarter, warning that Americans are likely to cut their travel spending in the run-up to November’s presidential election. The midpoint of those two figures falls below the $1.76 a share number that analysts had been expecting, according to FactSet data.mDelta’s adjusted earnings for the September quarter came in at $1.50 a share, down 26% from a year ago, on sales of $14.6 billion. Analysts had predicted a profit of $1.52 a share on sales of $14.55 billion, per FactSet. As well as the CrowdStrike outage, Delta also had to grapple with the Paris Olympics driving a slowdown in cross-Atlantic business travel in late July and early August. Hurricane Helene, which caused further disruption to flight plans, cost Delta 3 cents a share in profit, the company said.

The Swiss stock market relinquished some of the previous day's gains on Thursday. The SMI lost 0.4 per cent to 12,078 points. Among the 20 SMI stocks, there were 15 losers and five winners. A total of 14.9 (previously: 13.87) million shares were traded. Hurricane Milton had weakened considerably by the time it reached the US state of Florida and apparently caused less damage than initially anticipated. As a result, Swiss Re posted gains of 2.8 per cent and Zurich Insurance 0.6 per cent. Negative analyst comments, on the other hand, pushed Sika down by 1.9 per cent. The shares of fragrance manufacturer Givaudan traded 0.4 per cent higher. ‘Growth in the third quarter exceeded all expectations,’ a trader commented. Vontobel was also positive about the company's results. However, after the steep rise over the course of the year, profits were also taken, as the medium-term targets were only confirmed. Kuros continued to report strong growth after nine months. However, traders considered the peak in growth rates to have been reached, and the share price of the small cap fell by 5.6 per cent

Europe
On Thursday, the European stock markets gave up some of the ground gained the previous day as inflation fell slightly less than expected last month in the United States. The Stoxx Europe 600 index shed 0.2% to 519.1 points. In Paris, the CAC 40 and SBF 120 lost 0.2% and 0.3% respectively. The DAX 40 in Frankfurt was down by 0.2% and the FTSE 100 dropped by 0.1% in London. The biotech company Valneva (-1.5%) announced on Thursday, ahead of an investor day in New York, that it expects to be ‘sustainably profitable’ from 2027 if its vaccine against Lyme disease is approved. Valneva also confirmed its targets for 2024 and the medium term. British pharmaceuticals group GSK (+3.2% in London) confirmed on Wednesday evening its agreement to pay more than $2 billion to settle almost all the cases pending in the United States concerning Zantac, a heartburn treatment withdrawn from the US market in 2020. Airbus (+0.4%) announced on Wednesday evening that it had delivered 50 aircraft in September and a total of 497 units since the start of the year. To achieve its delivery target of around 770 aircraft by 2024, Airbus needs to deliver an average of 91 aircraft per month over the rest of the year. Soitec clawed back 0.1% to 84.30 euros, having suffered the biggest mid-day decline on the SBF 120 index. Citi lowered its target price for the stock from €120 to €97, while reiterating its ‘neutral’ recommendation.

United States
U.S. stocks declined Thursday after a hotter-than-expected inflation report sparked questions about the Fed’s next move. The S&P 500 fell 0.2%, and the Dow industrials declined 0.1%. The Nasdaq Composite slipped less than 0.1%. Major indexes notched fresh records Wednesday. Thursday’s consumer-price index showed prices rose 2.4% in the 12 months through September, running slightly hotter than expectations for a 2.3% rise. Annual core inflation also marginally overshot forecasts, with prices excluding volatile food and energy up 3.3%. A separate report showed a modest but unexpected uptick in weekly jobless claims. Investors are paying close attention to both the labor market and progress in taming inflation, given the implications for Federal Reserve policy. Traders are assigning a roughly 83% chance that the Fed will cut rates by a quarter-point at its November meeting, according to recent data from the CME FedWatch tool. Toronto-Dominion fell by 6.4 per cent. The Canadian bank is expected to pay around USD 3bn in fines and have to restrict its business activities in the US as part of a settlement over allegations of money laundering, as reported by the Wall Street Journal. Shares from the insurance sector such as Allstate (+0.5%), Progressive (+0.4%) and Everest (+1.3%), which had recently recovered from recent losses, continued to be in demand. Hurricane ‘Milton’ was downgraded by several categories when it made landfall in Florida last night. The feared damage is likely to be less than anticipated. Domino's Pizza dropped 1.1 per cent after mixed third-quarter figures - depressed by a lowered sales forecast.

Asia
Asian stocks were mixed on Friday. There is no trading in Hong Kong due to a public holiday. The Shanghai Composite dropped significantly by 1.6 per cent. The Nikkei index increased by 0.7 per cent. In Seoul, the Kospi advanced by 0.3 per cent after the Bank of Korea cut interest rates for the first time in four years. As expected, the key interest rate was reduced by 25 basis points to 3.25 per cent. Analysts assume that the central bank will gradually ease monetary policy further.

Bonds
U.S. Treasury yields were mixed Thursday as traders wrestled with the Federal Reserve’s likely next steps on interest rates after September’s slightly stickier consumer-price index inflation report The 10-year U.S. Treasury note yield remained stable at 4.070%. The 2-year Treasury note yield, on the other hand, fell by 6 basis points to 3.962%.

Analysis
Galderma price target: Goldman Sachs upgrades to CHF 95 (83) - Buy
Deutsche Bank raises Holcim target to CHF 93 (91) - Buy
UBS lowers Kion target to 45 (50) EUR/Buy - Trader

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