Before the bell: America First

Investors shoot first and ask questions later. Wall Street celebrates, Europe looks on. Trump trade hits record levels.

Against expectations, it quickly became clear that Trump won. It was even a landslide, with a red Senate and possibly a Republican House of Representatives as well. Game, set, and match? Not quite yet, as delivering on promises is harder than making them. But investors were all in. European markets ended the day clearly negative: the Eurostoxx 50 dropped 1.4%, Frankfurt lost 1.1%, and the Bel20 fell 0.6%. Stocks like Vestas declined by 12%, and Belgian company DEME dropped 5.7%—Trump is no fan of green energy. Wall Street, however, reacted euphorically, and the dollar surged. Many Trump trade stocks soared, including Tesla (15%), owned by Trump supporter Elon Musk, Caterpillar (8.8%), and prison operator GEO Group (+40%!). Banking giant JP Morgan surged 11.7%, while Goldman Sachs gained an impressive 13.4%. Trump delivered the best stock market day post-election in history. U.S. long-term interest rates initially jumped by 20 basis points, later settling at 16. This means the U.S. government now has to pay 4.41% on ten-year government bonds, which is a potential Achilles’ heel for a president planning significant tax cuts and steep import tariff increases, likely leading to even higher debt and inflation.

Asia seems to be reacting positively to Trump’s victory. The Nikkei 225 is up 0.25%, and the Hang Seng has gained 1.5%. This evening, the Fed is unlikely to consider Trump’s win when it cuts interest rates. In Brussels, KBC, Euronav, GBL, and Titan Cement are reporting earnings. ArcelorMittal, Engie, Euronext, and Rheinmetall will also release their results, and on Wall Street, Barrick Gold, Airbnb, and Rivian are set to report.

American losers

You might forget, but American stocks can also decline. In a kind of reverse Trump trade, they do so when companies mess up or both. Nike (-3.4%) is an example of the latter. Its failed attempt to boost margins through direct online and store sales hurt its more important wholesale and retail sales. And if Trump imposes high tariffs, American companies with global sales could suffer from retaliatory measures. Coca-Cola (-2.6%) is also very international, though fears over inflation’s impact on low-income Americans tightening their belts likely play a role here. Home Depot (-2.9%) also dropped; higher mortgage rates mean a slowdown in home buying.

Bringing money back to the local bank

KBC earned 1.39 billion euro in net interest income, 740 million euro in insurance income, and 641 million euro in net commission income (investment funds, etc.) in the third quarter. Together, this totaled 2.78 billion euro, or just under 3% more than the same quarter last year. Operating costs and taxes were slightly higher, resulting in a net profit of 868 million euro or 2.14 euro per share—4% less than last year but still significantly higher than analysts expected, thanks to a 78 million euro gain. Besides that boost, KBC performed in line with expectations. KBC took in a total of 6.5 billion euro from customers, compared to 5.7 billion euro in the same quarter last year, recovering 0.8 billion euro, thanks to actions aimed at bringing funds from the expiring ‘notorious’ state bonds back in-house. KBC will pay an interim dividend of 1 euro on November 12.

Did you know…

that things look bleak for U.S. server and data center equipment supplier Super Micro Computer (-18%)? The company fell far short of expected quarterly results and is more than two months late with its annual report.

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