Before the bell: Donald Trump and trade wars

ARM and Qualcomm are feuding, L’Oréal disappoints, and McDonald’s is having stomach troubles.

The Euro Stoxx 50 remained flat yesterday, while the Bel20 in Brussels fell by 0.4%. UCB (-1.7%) is ending its collaboration with Swiss company Roche on Alzheimer’s research after four years. UCB has regained all rights to the potential drug bepranemab and will continue its development independently. The IMF sees inflation falling in many countries but warns of the disastrous economic consequences of excessive trade wars. In the United States, the S&P 500 was also flat, while the Nasdaq rose by 0.2%. General Motors (+9.8%) shone as it exceeded expectations and raised its outlook. Genuine Parts (-21%), an auto parts supplier, had to lower its forecasts. Overnight, it was revealed that ARM has suspended its chip design license with Qualcomm. The two companies are locked in a legal battle, and ARM has issued its customer a mandatory 60-day notice.

In Asia, the Hang Seng Index is up 1.7% this morning, while the Topix in Tokyo is down 0.4%. AkzoNobel announced a profit decline this morning, with the Dutch paint producer expecting its annual result to be on the lower end of its forecast. Later today, Heineken will release its results. In Germany, Deutsche Bank will report its figures, and in France, Thales will open its books. In the U.S., Boeing, Coca-Cola, IBM, and Tesla will all present their results.

Unmaskable numbers

Beauty giant L’Oréal has disappointed. In the third quarter of this year, the French group reported revenue of €10.3 billion, a 3.4% increase compared to the same period last year. However, analysts had expected growth of 6%. The situation is particularly bad in Asia, where sales dropped by 6.5%, despite analysts forecasting a 2.9% increase. It says something about the economy when beauty companies are struggling. L’Oréal hasn’t seen its growth stagnate like this since the COVID-19 pandemic. At the end of the month, Estée Lauder will release its earnings, and we’re curious to see if the American competitor performs better.

Stomach troubles

In the western U.S., McDonald’s is facing a suspected E. coli outbreak. So far, 49 people have fallen ill, and there is even a report of someone dying from the infection. Everyone with symptoms had eaten a ‘Quarter Pounder’ burger from the fast-food chain. This burger, known in some places as the ‘Royal’ burger, is the only one in the U.S. made from fresh, never-frozen beef. As usual, the E. coli bacteria is also infecting the stock prices of the companies involved. McDonald’s stock took an 8.5% hit after-hours. Typically, companies manage to get such outbreaks under control quickly, and attentive investors can take advantage of the situation. No, this incident is not connected to the restaurant where Donald Trump helped out a day earlier.

Did you know…

that despite trade restrictions, Chinese company Huawei is still trying to order high-tech chips from TSMC? The Chinese are attempting to do this through other customers. As soon as TSMC realizes the chips are for Huawei, the company halts the order.

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