Before the bell: fourth time’s the charm

Today marks the much-anticipated European Central Bank (ECB) interest rate cut, though the extent of the reduction remains uncertain. Meanwhile, Belgium’s telecom market is in turmoil as a price war ignites.

Will it be 25 basis points or 50? That’s the decision ECB President Christine Lagarde and her board members will finalize today. For the fourth time since initiating rate reductions, the ECB is set to lower interest rates. The consensus is for a modest 25 basis point cut. A 50-point reduction could push the euro down further, bringing euro-dollar parity within reach. Meanwhile, in the U.S., celebrations continue as the Nasdaq hits an all-time high of 20,000 points.

In Belgium, the mood was less jubilant. Colruyt’s stock tumbled 8.3% as competitive pressures in the Belgian supermarket sector intensified. Storage provider Shurgard received a sell recommendation from BNP Paribas Exane, with a price target of 36 euros per share. It was also announced this morning that the merger between Vastned Retail and Vastned Belgium will be finalized on January 1. Broadcom and Costco are scheduled to release earnings later today.

Competition heats up

Investors will have their first opportunity to react to Adobe’s earnings report later today, but the outlook isn’t promising. The company’s full-year forecast has left much to be desired, potentially leading to a significant drop in its share price. Revenue came in at 23.4 billion dollars, 400 million dollars below expectations. Growing fears that emerging AI startups may chip away at Adobe’s dominance in the creative software market are becoming harder to ignore. Despite touting its generative AI tool, Firefly, which has already been used 16 billion times, Adobe’s projected growth remains lackluster. The concern is that competitors like OpenAI may capture Adobe’s market share. A lower opening is expected.

Romanian disruptors cause panic in Brussels

Digi, Belgium’s fourth telecom provider, made a memorable entrance yesterday, judging by the market’s reaction to Proximus’ stock, which fell a staggering 7.6%. Digi announced plans to offer fixed internet for 10 euros per month and 15 GB of mobile data with unlimited calls and texts for just 5 euros. The catch? Fixed internet is currently unavailable in most parts of Flanders. However, that could change, putting Proximus’ profit margins under further pressure. Notably, there was little panic around Orange Belgium‘s stock, which has shown near-flat performance over the past six months with minimal trading volume. Orange Belgium did respond immediately by launching a new budget brand, Hey!, offering 15 GB of mobile data for 5 euros. The price war in Belgium has officially begun.

Did you know…

Donald Trump will ring the opening bell at the New York Stock Exchange today? In the past, Trump has frequently taken credit for rising stock markets.

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