The Swiss stock market experienced a decline, continuing a negative trend from the previous day. Market participants are exercising caution due to the upcoming US presidential election and the earnings season, particularly with UBS in focus.

Market Performance

The Swiss Market Index (SMI) closed below the critical 12,000-point threshold, reflecting concerns about economic stability and investor sentiment. In contrast, Wall Street showed resilience, gaining ground in the morning session, buoyed by positive economic indicators from the US.

Economic Growth

The first estimate of US economic growth revealed an annualized expansion of 2.8% in the third quarter, slightly below the anticipated 3%. Consumption and investment growth exceeded expectations, providing a more optimistic perspective on the overall economic landscape. The eurozone reported stronger-than-expected growth of 0.4% in the third quarter, but challenges are expected in the coming months.

Swiss Economy Outlook

The UBS-CFA indicator saw a modest improvement, but the outlook for the Swiss economy remains "moderately negative" for the next six months. The KOF Economic Barometer fell below the long-term average for the first time since January, indicating a slow pace of economic recovery. The SMI, SLI, and SPI all experienced declines.

Stock Performance

Sandoz and SIG Group were the only stocks to post gains, with Sandoz rising due to a robust performance in its biosimilars business. UBS faced profit-taking despite strong Q3 results. Swatch and Straumann also declined.

Global Economic Trends

The cautious sentiment in the Swiss market reflects broader global economic trends, as investors remain vigilant in the face of potential volatility. The upcoming US presidential election adds an additional layer of uncertainty. The mixed results from major financial institutions and corporations highlight the complexities of navigating a recovering economy. The overall outlook remains tempered by uncertainty and mixed corporate results.

Conclusion

Market participants will need to stay informed and agile in their investment strategies as the global economic landscape continues to evolve.