Before the bell: heading for lower interest rates

Soon, the European Central Bank will make an announcement that is likely to push savings account interest rates down again. Two Belgian listed companies issued profit warnings this morning.

After a gloomy day, the stock markets bounced back yesterday, at least on Wall Street, where the Nasdaq and the S&P 500 gained 0.3% and 0.5%, respectively. Morgan Stanley released its results before the market opened and saw a 6.5% increase in its stock price. Walt Disney (+2.7%), United Health Group (+2.7%), Visa (+3%), Nvidia (+3.1%), and Cisco Systems (+4.3%) were also in demand. In Europe, the mood remained bleak. The Euro Stoxx 50 lost 0.8%, and ASML in Amsterdam dropped another 5.1%. The Bel20 performed relatively well with a loss of just 0.2%. Aedifica (+1.2%) and Solvay (+2.3%) were the top performers. Outside the index, real estate developers Banimmo (-4.5%) and Atenor (-2.4%) took a hit. The London stock exchange rose by 1% after better-than-expected inflation figures. In September, the cost of living in the UK increased by 1.7% year-on-year, compared to 2.2% in August. As a result, interest rates on pounds are also expected to fall.

In Tokyo, stock prices remained relatively flat this morning, while Hong Kong saw a 0.8% gain. Earlier in the day, the Hang Seng Index advanced by 2.2% after Beijing announced new support for those affected by the real estate crisis in China. All eyes are now on Frankfurt, where the European Central Bank is expected to announce at 2:15 p.m. that euro interest rates will drop again. Barco, Nokia, Sipef, Taiwan Semiconductor (TSMC), and Netflix are all set to release their results today.

A shareholder’s kiss

Morgan Stanley announced a quarterly net profit of $2.4 billion before the market opened yesterday. A year earlier, that figure was “only” $3.2 billion. The stock market rewarded the strong performance with a 6.5% increase in the stock price. Analysts had already expected higher profits, but the final result was 20% better than forecast. The bank made significant gains from advising on mergers and acquisitions, particularly in Europe. Morgan Stanley also reported higher commissions as clients traded more stocks. The profit engine of U.S. banks is running at full throttle. On Friday, JP Morgan released excellent results, and yesterday, US Bancorp’s stock rose by 4.7% after solid figures.

Two Belgians

Despite higher palm oil prices, Sipef has performed worse so far this year compared to last year. The plantation group’s palm oil production fell by 14.7% in the past quarter, and the company described its outlook for the rest of the year as “challenging.” Sipef also announced this morning that its recurring earnings for the year will be 4% to 18% lower than last year.

Barco has once again disappointed its investors. In the summer, there were hopes that results would improve in the second half of the year, but in the past quarter, revenue dropped by 3%. Barco now expects revenue in the second half of the year to be “around the same level” as in the second half of 2023.

Did you know…

that exactly 210 years ago today, a major disaster occurred in London? At the Meux & Co brewery, the barrels burst, releasing up to 1.4 million liters of beer. The incident became known as the “London Beer Flood.” Eight people lost their lives, and the brewery received a subsidy to avoid bankruptcy.

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