Before the bell: Donald Trump Day

U.S. markets are closed today, but in Asia, investors continue to ride Wall Street’s rally. In Europe, LVMH and Novo Nordisk take turns in the lead.

The trading week ended on a high note, with Friday gains of 1% (S&P 500) and 1.5% (Nasdaq). Weekly gains stand at 2.9% and 2.5%, respectively, offsetting the lukewarm start to the year and pushing Wall Street to an average year-to-date increase of just under 2%. That won’t change today, as it’s Martin Luther King Day. Wall Street, schools, banks, and even some U.S. companies are closed. It’s also Donald Trump Day, with millions of Americans expected to watch the new president’s inauguration on their screens. In Europe, uncertainty lingers over Trump’s intentions, though this may reflect a broader realization that the continent has areas in need of improvement. Investors seem to agree, lifting the Euro Stoxx 50 by 5.2% so far this year.

In Asia, markets are building on Wall Street’s momentum. Tokyo’s indices are up 1.2%, while in Hong Kong, stocks gained 2.4% this morning. This delayed reaction follows China’s reported 5% economic growth last year. The International Monetary Fund (IMF) now predicts slightly higher global economic growth this year, revising its forecast from +3.2% to +3.3%. This optimism is primarily driven by robust growth in the U.S. (+2.7%, up from +2.2% previously). In the eurozone, growth is expected to be a modest 1%.

TikTok dances again

Around 170 million Americans were left without their beloved TikTok app yesterday. The platform went dark following a ban by the U.S. Supreme Court, which deemed the risk of data being accessed by the Chinese government too high. While outgoing President Biden indicated it would ultimately be up to Trump to decide on sanctions, the app’s temporary shutdown may have been a promotional stunt to welcome the new president. Trump is likely to allow TikTok back, pleasing his followers and framing it as a defense of free expression. TikTok’s parent company, ByteDance, is privately held but partially owned via a private-equity fund, in which Belgian investment company Sofina holds a minor stake.

Even slimmer

There are few star stocks in Europe, with ASML, LVMH, and Novo Nordisk among the exceptions. Even these titans underperformed last year. On Friday, Novo Nordisk dropped another 4.3% in its home market of Copenhagen and 5.3% on Wall Street. The Danish producer of insulin and weight-loss drugs is paying the price for its weight-loss medication being less effective than Eli Lilly’s. However, even its U.S. competitor saw its stock drop 4.2% on Wall Street on Friday. In the pharmaceutical sector, Belgian champion UCB also lost 4.6% on Friday, bringing its weekly loss to 6.5%. Investors likely anticipate cost-cutting measures from the new U.S. Secretary of Health. What one investor sees as a threat and a reason to take profits, another sees as an opportunity to buy at a discount.

Did you know…

LVMH has regained its position as the most valuable publicly traded company in Europe, overtaking Novo Nordisk? The French luxury goods giant is now worth 345 billion euro, while Novo Nordisk stands at 341 billion euro. Rounding out the top five are SAP (315 billion euro), ASML (290 billion euro), and Hermès (262 billion euro).

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