One artificial intelligence chip maker’s earnings have landed with a bang. It was Broadcom, not Nvidia, who jolted the market this time. Broadcom shares were up 24.4% at $224.80 on Friday following its fourth-quarter earnings report, pushing its market value above $1 trillion for the first time. The stock needs to close at or above $214.11 to hold that level. Broadcom makes processors across the networking, broadband, server storage, and wireless sectors, as well as owning software business VMware. However, the part of Broadcom’s business that is getting the market excited is its position in high-end ASICs - application specific integrated circuits - that can be used as custom AI chips. Broadcom said it had been selected by two more large customers to help develop their next-generation AI chips. The new customers are likely to be Apple and ChatGPT-developer OpenAI, on top of existing clients Google-parent Alphabet, Meta Platforms, and TikTok-parent ByteDance, according to analysts at William Blair. AI sales within Broadcom’s semiconductor segment amounted to $12.2 billion for its fiscal year, more than triple the previous year. That compares with the company’s overall annual revenue of $51.6 billion, which was up 44%. It expects its AI chip market to keep growing at a similar rapid clip for the next two years.

The Swiss stock market followed the prevailing trend on the European stock exchanges on Friday and recorded small losses. The SMI shed 0.2 per cent to 11,694 points. Of the 20 SMI stocks, there were 11 losers and 9 winners. A total of 15.99 million shares were traded (Thursday: 20.22 million). Swiss Re was the clear winner of the day with a gain of 4.5 per cent. Swiss Life also advanced by 0.9 per cent along with Zurich Insurance. The reinsurer Swiss Re has announced a strong rise in profits for the coming year and also intends to increase its dividend. The company expects to achieve a net profit of more than 4.4 billion dollars. By comparison, the target for the current year is 3.0 billion. Lonza (-2.8%) was at the bottom of the SMI in a countermovement. The share had risen sharply the previous day, driven by the planned exit from the nutritional supplements segment.

Europe
European stock markets lost ground on Friday, as the European Central Bank's (ECB) rate cut failed to reassure investors in the face of a gloomy outlook for the eurozone economy. The Stoxx Europe index fell by 0.5% to 516.5 points. In Paris, the CAC 40 and SBF 120 were each down 0.2%. The DAX 40 in Frankfurt and the FTSE 100 each declined by 0.1%. Soitec gained 6.5% to 86.45 euros. Bernstein maintained its ‘outperform’ recommendation on the manufacturer of advanced materials for the semiconductor industry and raised its target price from €130 to €135. Euroapi dropped by 5.2%. The manufacturer of active pharmaceutical ingredients will leave the SBF 120 index on 20 December, along with Casino (-1.3%) and Eutelsat (-3.6%), Euronext announced. They will be replaced by aromatic products manufacturer Robertet (+0.4%), software publisher Planisware (+1.1%) and pharmaceutical company Medincell (+8.5%). Moeller-Maersk climbed by 3.1 per cent, Kühne & Nagel by 0.8 per cent and Hapag-Lloyd by 0.2 per cent. Danish container giant Moeller-Maersk is expecting strong global trade growth of 5 to 7 per cent in the coming year. Steel stocks were weak following a profit warning from Finland's Outokumpu, the shares of which fell by 12.4 per cent. Arcelormittal slipped 2.3 per cent, Thyssenkrupp 2.1 per cent and Salzgitter 4.3 per cent.

United States
U.S. stocks finished mixed on Friday with consumer brands dragging the Dow Jones Industrial Average 0.2% lower. The S&P 500 was flat and the Nasdaq inched ahead 0.1%. On Thursday, all three indexes fell. Broadcom’s shares jumped after the company reported that revenue from its artificial-intelligence business more than tripled. The news lifted other chipmakers, including Micron Technology. Concerns about softer spending by lower-income customers dragged down consumer-goods stocks such as Nike and Coca-Cola. Shares of Progressive popped up when the auto-insurance company reported strong November results. Healthcare insurers, including UnitedHealth and Cigna, rebounded after losses earlier in the week tied to concerns about increased regulation of the industry. Looking ahead to next week, investors will turn their attention to the Federal Reserve’s interest-rate decision. A quarter-percentage point rate cut appears all but guaranteed. Bitcoin hovered above $100,000. Costco (+0.1%) reported better-than-expected earnings of 4.04 dollars per share for the last quarter on Thursday evening, although its sales of 62.2 billion dollars missed the consensus. Boeing (+1.1%) announced on Thursday evening its intention to invest a billion dollars in its South Carolina facilities in order to boost production of its 787 Dreamliner aircraft, with the aim of making up for the backlog caused by various manufacturing, safety and parts shortage problems. Salesforce lost 1.1% despite Keybanc upgrading its recommendation to buy, with a target price of $440. The home equipment distributor RH soared 17% after returning to profit in the last quarter. The group forecast 18-20% sales growth in the current quarter ‘despite the worst housing market in 30 years’.

Asia
Stocks in Asia mostly fell on Monday. The Shanghai Composite added 0.1 per cent, while the Hang Seng Index in Hong Kong lost 0.6 per cent. The Nikkei-225 shed 0.1 per cent. The focus here is on the outcome of the BoJ meeting on Thursday. ‘We expect an increase of 25 basis points to 0.5 per cent. However, the odds of a December hike versus a January hike are 60 to 40,' according to Moody's Analytics. The Kospi in Seoul also fell by 0.3 per cent. The parliament has voted in favour of impeaching President Yoon Suk Yeol. The background to the proceedings was the president's decision to temporarily impose martial law.

Bonds
U.S. government debt yields finished higher for a fifth straight session on Friday, as traders grappled with data this week that showed the Federal Reserve is struggling with the final stretch of its inflation fight. The 10-year Treasury note yield gained 6 basis points (0.06 percentage point) to 4.4%. The 2-year Treasury note yield added 5 basis points to 4.25%.

Analysis
LBBW upgrades Swiss Re to CHF 140 (120) - Hold
JP Morgan lowers Helvetia target to CHF 160 (170) - Neutral
Warburg downgrades Peach Property to Hold (Buy) - Target CHF 9 (12)

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