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Swiss Market Index Recovers; Novartis Gains Amid Positive Late-stage Multiple Sclerosis Drug Data

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The Swiss Market Index recovered on Tuesday, closing 0.34% higher, amid a barrage of business surveys, company updates and economic data prints.

Switzerland's manufacturing PMI climbed to 57.1 in August from 53.2 in July, supported by an increase in production, order backlogs and purchasing activity, according to procure.ch and UBS data. The latest reading also marks the sixth straight month the index came in above the growth threshold of 50.

On the retail front, data from the Federal Statistical Office showed that seasonally adjusted retail sales in the country ticked up 0.1% month over month in real terms in July, following a revised 0.3% increase in June.

Zooming out to the euro area, the annual inflation rate accelerated to 3.3% in August from 2.9% in July, while the annual core inflation rate ticked down to 2.4% from 2.5%, Eurostat's flash data showed.

Over to corporates, Novartis (NOVN.SW) reported that its phase 3 Remodel-1/-2 trials for remibrutinib met their primary endpoint of "significantly" reducing annualized relapse rate in adult patients with relapsing multiple sclerosis, compared with teriflunomide, without liver safety issues. The oral Bruton's tyrosine kinase inhibitor also showed "clinically meaningful" reductions, against teriflunomide, in key secondary endpoints related to disability progression. The Swiss drugmaker's stock added 6.25% at closing.

"We forecast $3bn un-risk adjusted peak sales for remi, with upside potential based on exact progression data The positive remi MS data likely increases investor conviction in remi's potential as a [greater than] $10bn asset across indications (CSU, CINDU, MS, HS data 4Q26, MG PIII FY28, Food Allergy PIII started). An anchor, large asset supports growth profile through patent cliff," analysts at BofA Global Research said in a note. "We model a total $26bn MS market and see potential for BTKi's to replace most existing orals (c$7bn) due to better efficacy, and potential to compete in certain settings vs CD20s (c$15bn)."

UBS Group (UBSG.SW) acknowledged recommendations from the Swiss parliament's Economic Affairs and Taxation Committee of the upper chamber offering alternatives to the Federal Council's "extreme" banking regulation proposals, requiring the group's parent bank UBS AG to hold 50% common equity Tier 1 capital and up to 50% additional Tier 1 capital, up from the current 45% and 15%, respectively. However, the group warned that the recommendations would still lead to "a significant increase in costs" for the banking group.

Meanwhile, Swiss Finance Minister Karin Keller-Sutter criticized the committee's plan to soften the substantial new capital requirements to be imposed on UBS. At the end of trading, UBS shares declined 0.32%.

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Asia Markets

Update: US Equity Indexes Fall Amid Gains in Crude Oil, Benchmark Treasury Yield as Iran War Hostilities Resurge

(Updates with index/price moves, macroeconomic data, and company/geopolitical news from the first paragraph.)US equity indexes fell as crude oil jumped amid renewed Washington-Tehran military escalation and the 10-year government bond yield rose to its highest in about a month.The Nasdaq Composite fell 0.1% to 26,370.89, the S&P 500 retreated 0.3% to 7,686.14, and the Dow Jones Industrial Average slid 0.7% to 53,185.90 on Monday. All sectors, except energy and technology, declined. Communication services led decliners, followed by utilities and industrials.President Donald Trump said the US will respond to an Iranian attack on US forces overnight in Jordan, Fox News reported. US air defenses intercepted all but one Iranian missile, which was allowed through because it was not expected to hit anything of consequence, the report said, citing the president. Iran said it attacked US bases in Jordan and US military targets at the Al Menhad airbase in the United Arab Emirates after US forces bombed two rocket launchers on Iran's Larak Island.Iran's military has reiterated a warning to the region not to allow the US military to launch attacks from their soil or risk retaliation, Al Jazeera, a Middle Eastern broadcaster, reported. "As we have demonstrated on the ground, while respecting the national sovereignty of our neighbours, we will never tolerate any form of aggression and will respond with a far heavier retaliation," Al Jazeera cited a military statement.The front-month US West Texas Intermediate crude oil contract advanced 3.1% to $85.96 per barrel, and global benchmark North Sea Brent climbed 2.7% to $90.50 per barrel in the final leg of trading.In economic news, the Dallas Fed's monthly manufacturing index jumped to 11.6 in August from 1.3 in July, above expectations for 1.6 in a survey compiled by Bloomberg, indicating a faster pace of expansion."Along with the increase in output, other measures of manufacturing activity also pointed to faster growth this month," said Jesus Caas, senior business economist at the Dallas Fed. "However, employment growth slowed slightly. Price pressures were relatively stable but remained markedly elevated while wage pressures eased."Federal Reserve Chair Kevin Warsh's speech Friday was "particularly hawkish, according to a note from Capital Wealth Planning. The next Fed policy meeting will be in mid-September, with the August inflation print due beforehand, per the note. Citing the CME's FedWatch tool, the futures market is pricing in one or two rate hikes by the year-end, potentially one in September followed by another in December.US Treasury yields were mixed ahead of the close. The 10-year yield climbed 3.4 basis points to 4.76%, the highest since July-end, while the two-year was steady at 4.35%.In company news, Tesla (TSLA) is selling a simplified version of Model 3 at a lower price in Hong Kong and Macau than in mainland China, according to media reports and the company's regional websites. Shares jumped 5.5%, the second-biggest gainer on the S&P 500 and the Nasdaq.Shares of PG&E (PCG) and Edison International (EIX) were among decliners, down 20% and 23%, respectively, after California amended legislation to protect wildfire survivors' right to sue utilities for equipment-caused blazes, ABC7 reported Sunday. The duo was the worst performers on the S&P 500.

Dow JonesNasdaq CompositeS&P 500$EIX$PCG$TSLA
Asia Markets

Update: US Equity Indexes Fall While Benchmark Treasury Yield Jumps With Crude Oil as Iran Hostilities Resume

(Updates with index/price moves, macroeconomic data, and company/geopolitical news from the first paragraph.)US equity indexes declined as investors weighed renewed Washington-Tehran military escalation amid higher crude oil prices and a march up in the 10-year government bond yield to the highest in about a month.The Nasdaq Composite fell 0.4% to 26,309.5, the S&P 500 retreated 0.4% to 7,677.6, and the Dow Jones Industrial Average slid 0.7% to 53,208.3 after midday Monday. All sectors, except energy, declined. Communication services led decliners, followed by utilities, industrials, and real estate.Iran and the US traded attacks for the first time in over a month overnight into Monday, CNN reported. Iran said it attacked US bases in Jordan and US military targets at the Al Minhad airbase in the United Arab Emirates after US forces bombed two rocket launchers on Iran's Larak Island, according to a report from Al Jazeera, a Middle Eastern broadcaster.The US military struck the two launchers that a US official said were attempting to deploy mines into the Strait of Hormuz, Reuters reported. The United Arab Emirates condemned the Iranian drone attack on Monday as a "dangerous escalation" and a flagrant violation of its sovereignty, the news report said.President Donald Trump said the US will respond to an Iranian attack on US forces overnight in Jordan, Fox News reported. US air defenses intercepted all but one Iranian missile, which was allowed through because it was not expected to hit anything of consequence, the report said, citing the president.The front-month US West Texas Intermediate crude oil contract advanced 2.7% to $85.62 per barrel, and global benchmark North Sea Brent climbed 4.8% to $90.32 per barrel.In economic news, the Dallas Fed's monthly manufacturing index jumped to 11.6 in August from 1.3 in July, above expectations for 1.6 in a survey compiled by Bloomberg, indicating a faster pace of expansion.Federal Reserve Chair Kevin Warsh's speech Friday was "particularly hawkish, emphasizing that the Fed's 2% inflation target remains the objective but recently, there has been no meaningful movement toward that mark," according to a note from Capital Wealth Planning. Inflation is still above the Fed's target, and Warsh believes that short-term interest rates are the central bank's primary tool to reel it in.The next Fed policy meeting will be in mid-September, with an inflation reading for August to be released beforehand, per the note. Citing the CME's FedWatch tool, the futures market is pricing in one or two rate hikes by the year-end, potentially one in September followed by another in December.US Treasury yields were mixed after midday. The 10-year yield climbed 3.4 basis points to 4.76%, while the two-year was steady at 4.35%. The 30-year yield jumped 4.5 basis points to 5.25%.In company news, Aon (AON) said it has agreed to acquire insurance brokerage USI Insurance Services from KKR (KKR) and other shareholders in an all-cash deal worth roughly $17 billion, as the professional services firm aims to strengthen its presence in the US middle-market insurance segment. Aon shares were down 8%.Eli Lilly (LLY) has agreed to acquire Merida Biosciences for up to $2.875 billion in cash, as it seeks to expand its portfolio of autoimmune and allergic disease therapies, the companies said Monday. Eli Lilly shares were down 1.5%.Tesla (TSLA) is selling a simplified version of Model 3 at a lower price in Hong Kong and Macau than in mainland China, according to media reports and the company's regional websites. Shares jumped 5.2%, the top gainer on the S&P 500 and the Nasdaq.Shares of PG&E (PCG) and Edison International (EIX) were among the decliners, down 18% and 24%, respectively, after the state of California amended legislation to protect wildfire survivors' right to sue utilities for equipment-caused blazes, ABC7 reported Sunday.

Dow JonesNasdaq CompositeS&P 500$AON$EIX$KKR$LLY$PCG$TSLA
Asia Markets

Exchange-Traded Funds Lower as US Equities Fall After Midday

Broad Market IndicatorsBroad-market exchange-traded funds IWM and IVV were lower. Actively traded Invesco QQQ Trust (QQQ) eased 0.2%.US equity indexes declined after midday Monday as crude oil prices rose following renewed fighting between the US and Iran overnight.EnergyIShares US Energy ETF (IYE) and the State Street Energy Select Sector SPDR (XLE) each added about 0.8%.TechnologyThe State Street Technology Select Sector SPDR ETF (XLK) edged up 0.1%; iShares US Technology ETF (IYW) and iShares Expanded Tech Sector ETF (IGM) were softer.The State Street SPDR S&P Semiconductor (XSD) rose fractionally, while iShares Semiconductor (SOXX) added 0.2%.FinancialThe State Street Financial Select Sector SPDR (XLF) dipped 0.6%. Direxion Daily Financial Bull 3X Shares (FAS) declined 1.6%, and its bearish counterpart, Direxion Daily Financial Bear 3X Shares (FAZ), advanced 1.8%.CommoditiesCrude oil rose 2.3%, and the United States Oil Fund (USO) added 2.6%. Natural gas gained 1.7%, and the United States Natural Gas Fund (UNG) was up 1.9%.Gold on Comex slipped 1%, and the State Street SPDR Gold Shares (GLD) was down 0.6%. Silver fell 1.1%, and iShares Silver Trust (SLV) shed 0.2%.ConsumerThe State Street Consumer Staples Select Sector SPDR (XLP) fell 0.6%. The Vanguard Consumer Staples ETF (VDC) lost 0.4%, and iShares Dow Jones US Consumer Goods (IYK) was down 0.6%.The State Street Consumer Discretionary Select Sector SPDR (XLY) eased 0.3%. VanEck Retail ETF (RTH) was down 0.5%, and the State Street SPDR S&P Retail (XRT) dipped 0.5%.HealthcareThe State Street Health Care Select Sector SPDR (XLV) fell 0.4%. iShares US Healthcare (IYH) and Vanguard Health Care ETF (VHT) were also lower. IShares Biotechnology ETF (IBB) eased 0.3%.IndustrialThe State Street Industrial Select Sector SPDR (XLI) fell 1.2%. Vanguard Industrials Index Fund (VIS) and iShares US Industrials (IYJ) were also in the red.CryptocurrencyIn midday activity, bitcoin (BTC-USD) eased 0.2%. Among cryptocurrency ETFs, ProShares Bitcoin ETF (BITO) added 1.4%, ProShares Ether ETF (EETH) was up 1.5%, and ProShares Bitcoin & Ether Market Cap Weight ETF (BETH) gained 1.6%.

Dow Jones^EEM^EXI^FAS^FAZ^GLD^IBB^IGM^IGV^IPK^IVV^IWMNasdaq Composite^IYE^IYH^IYJ^IYK^IYW^PMR^QQQ^RTH^SOXXS&P 500^SPY^UNG^USO^VDC^VHT^VIS^XLE^XLF^XLI^XLK^XLP^XLV^XRT^XSD$BETH$BITO$EETH