U-turn - The wind is turning: A US bank is again thinking positively about Swiss stocks

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In the past few weeks and months, Bank of America has made a name for itself with its pessimistic stance on Swiss equities. But that was once.

As I can gather from a strategy paper sent to me from London, the authors led by Sebastian Rädler still expect falling prices on the European stock markets until the end of December. The year-end target of 420 points for the Stoxx Europe 600 Index will not be shaken, which from today's perspective would correspond to a setback of a little more than eight percent.

As far as the Swiss stock market is concerned, Rädler and his co-authors strike an unusually forgiving tone. They even upgraded it from "Underweight" to "Overweight" and expect to perform 5 percent better in relative terms over the next 12 months. This is surprising insofar as the strategists continue to give European pharmaceutical stocks such as Roche or Novartis only a below-average weight in the customer portfolios.

When you consider that these two heavyweights alone are responsible for almost 40 percent of the total capitalization of the Swiss Market Index (SMI), the strategists' optimism for the Swiss stock market seems a bit half-hearted.

Stoxx Europe 600 Index (red) in a 12-month comparison with the SMI with dividend correction (green) (Source: www.cash.ch)

I would therefore be very interested to know whether and how the aforementioned upgrade will be implemented in the customer portfolios of the American investment bank. Maybe someone from my esteemed readership knows more about it...?

By the way, this is not the first time Bank of America has warned of a weak final quarter. As early as the end of August, there was an outcry through the trading rooms of local banks when Rädler and his employees predicted double-digit percentage price losses.

I wrote then:

However, this horrifying forecast is not entirely unselfish, as the strategist recently downgraded the European stock markets from "Positive" to "Neutral".

At this point, strategists saw the Swiss equity market underperforming even the broader Stoxx Europe 600 index. That no longer seems to be the case. The European stock markets as a whole are now even classified as "negative" and no longer just "neutral" by the American investment bank.

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In the world of electronics, Apple enjoys something of a cult status. As always when the latest iPhone generation goes on sale, large crowds form in front of the sales outlets.

One or the other stock analyst may have mingled with those waiting these days and bought one of the new iPhones - only to be able to disassemble it into its individual parts. In American stock market circles, this procedure is also called "teardown". Because, as always, when Apple or another major supplier comes up with new devices, it is of course of interest to know which components were installed by which suppliers.

As I gather from a comment by Stifel analyst Jürgen Wagner, the "teardown" of the new iPhone 13 shows that it no longer has an ambient light sensor from AMS, but a competitor product from rival ST Microelectronics.

Price development of AMS shares since the beginning of this year (source: www.cash.ch)

Wagner assumes that AMS already knew about the loss of this order when the sensor manufacturer estimated the extent of the collapsing sales at 250 million euros. The analyst himself estimates that Apple will contribute a total of 470 million euros to the supplier's sales in the coming year, 360 million euros of this alone with components for iPhones.

After the takeover and integration of the former Siemens subsidiary Osram, this is no longer 10 percent of annual sales. Wagner therefore sticks to his buy recommendation and the price target of CHF 26 for the shares of AMS.

Also due to the reports that Apple is likely to miss its own production targets for the new iPhone models due to problems along the supply chain, I assume that the first analysts could also start making cuts in their estimates for AMS in the coming days. Usually something like this does not remain without consequences for the course development.