STOCK MARKET BLOG JULY 2024

by the CEO Silvano Grimaldi of the independent asset management company GRIMALDI & PARTNERS AG

MONTHLY REVIEW

International stock markets ended the month of JULY mixed.

DRIVING FACTORS

US labor market report from June was significantly weaker than expected.
The market expects the US Federal Reserve to make its first interest rate cut next September.

STRESSFACTORS

Profit taking in tech stocks.

EQUITIES IN FOCUS

ROCHE with strong start after increasing profit outlook

The pharmaceutical company surprised positively with its half-year figures and exceeded forecasts. Analysts expect additional momentum from the increase in forecasts.

In their initial comments, analysts are pleased with the half-year report. Barclays speaks of a "strong" result in terms of both sales and profit. Octavian believes that Roche has shown a "strong business base".

Jeffries, in turn, particularly highlights the increased profitability in the pharmaceutical business. The core margin of 50.4 percent is significantly above the consensus. UBS also praises the strong core operating profit of the important pharmaceutical division. Goldman Sachs, in turn, praises the "strong cost control."

The increase in the profit outlook is surprising for most experts. Roche is known for its cautious forecasts. The increased profit outlook is likely to drive the EPS consensus estimate upwards, according to the market assessment.

The pipeline changes announced by Roche are not significant from ZKB's point of view. Octavian, on the other hand, expects strong growth in newer products and faster development cycles.

MONTHLY OUTLOOK

Opportunities

As the corporate earnings season for the second quarter of 2024 progresses, the volatility in the tech sector that increased last July is expected to subside.
Investors' expectations of a first interest rate cut by the US Fed are supporting share prices.

Risks

The coming summer weeks of August and September usually show price weakness.
The presidential election campaign is expected to amplify and bring every financial news item into focus as November approaches.

We expect a sideways trend on the stock markets for the month of August.

STOCK RECOMMENDATION: ROCHE