Before the bell: golden week

Chinese stock prices are not rising today, but there is a good reason for that. In Japan, the stock market is recovering and the S&P 500 closed the month at a new record.

On Wall Street, technology and other stocks finished 0.4% higher on average yesterday. The S&P 500 closed the month with yet another new record. In September, the index posted a 2% gain, even though that month is statistically the worst stock market month of the year. Apple (+2.3%) and FedEx (+2.3%) were in good spirits yesterday, while Dollar Tree (-3.8%), Ulta Beauty (-3.7%), Micron Technology (-3.5%) and General Motors (-3.5%) took a big hit. In Europe, car manufacturers also took a step back following profit warnings from Stellantis (-14.7%) and Aston Martin (-24.5%). The Eurostoxx 50 fell 1.3%, even as ECB President Lagarde reiterated that a new interest rate cut is imminent. The Bel20 still did relatively well with a loss of 0.4%, thanks to gains in Argenx (+1.4%) and Solvay (+1.6%).

The rally in Chinese stock markets is over, although that is due to the fact that the stock markets there are closed today. In fact, Chinese stock markets will keep their doors closed for seven days because of the “golden week”. During that period, a lot of Chinese traditionally travel relatively long distances to visit their families. We wonder if the strong performance in the stock markets will be a talking point. After yesterday’s blow, stock prices In Tokyo are recovering this morning with a gain of almost 2%. Soon we will get inflation data in the Eurozone and after-hours Nike will come out with quarterly results.

Should there still be cars?

It’s starting to get a bit monotonous, because after Volkswagen, BMW and Mercedes-Benz slipping, yesterday it was the turn of Stellantis and Aston Martin to send a profit warning into the world. That one apparently came as a surprise after all, as shares of the French-Italian-American carmaker still posted a 14.7% loss yesterday, while its British sector peer lost even a quarter of its value. Stellantis has already lost 54% off its share price since the end of March. Aston Martin lost 60% in one year. Are we glad we only have Chinese car manufacturer BYD in our portfolio. That stock is up 60% since the beginning of February. The sharp difference in share price performance shows that traditional car manufacturers are having a very difficult time holding their own in a market shaken by Tesla and BYD. We do not expect a turnaround anytime soon and so we are not buying the sharply discounted shares. In the wake of Stellantis, Renault (-5.6%) and D’Ieteren (-3.6%) were also down yesterday.

Cruising

Fortunately, cruise ship operators are doing much better than carmakers. Carnival Corporation’s figures show that. Last quarter, operating profits went up 34% to a new record. Carnival posted quarterly revenue of $5.24 billion from ticket sales, 15% more than in the same quarter last year. Once on board, customers spent $2.66 billion, also 15% higher than a year ago. For this year, the company expects ebitda of $6 billion from a previous estimate of $5.8 billion. Initially, investors reacted only lukewarmly to the good results. The stock lost 3%. But it looks like Carnival will soon be picked up at opening. 

Did you know…

Some 60% of Chinese domestic travelers take long-haul trips during Golden Week? Last year, the figure was barely 39%. That increase is no doubt due to lower airfares.

This article was translated from Dutch and was originally published on Spaarvarkens.be.