Before the bell: S&P 500 enters correction

Investors welcome intel’s new CEO while adobe takes a beating.

Anyone who thought the markets would rise yesterday was in for a disappointment. European markets started the trading day in the green, but later switched back to familiar red territory. The Euro Stoxx 50 fell 0.6%, while the Bel20 lost 0.5%. Umicore (+5.8%) was removed from Goldman Sachs’ sell list. Meanwhile, GBL is getting a new CEO after 13 years. Ian Gallienne, son-in-law of Albert Frère, will become chairman of the board and hand over leadership to German executive Johannes Huth. Huth, who has over 25 years of experience at private equity firm KKR, is tasked with steering the underperforming GBL in the right direction. Across the Atlantic, the positive inflation report from two days ago was no longer enough to reassure investors. The S&P 500 dropped 1.4%, and since its peak on February 19, the index has fallen by just over 10%, meaning we can now “officially” call it a correction. The Nasdaq recorded a 2% loss. Investors in Intel (+14.6%) can hardly believe they are getting a new CEO, driving the stock higher for the second day in a row. Meanwhile, Adobe (-13.9%) took a hit despite releasing decent quarterly earnings. Shareholders are particularly concerned that the software giant has missed the AI wave. Investors are flocking to gold, with the precious metal’s price rising 1.9%, bringing it close to breaking the psychological barrier of 3,000 dollars per troy ounce.

This morning, Asian markets are attempting to start the day on a positive note. The Topix in Japan is up 0.9%, while the Hang Seng Index in Hong Kong is surging 2.5%. Today, Belgium will release its January trade balance, and Roularta will publish its earnings. In Germany, it’s BMW’s turn to open its books. On the macroeconomic front, the University of Michigan will release its U.S. consumer sentiment survey.

Drained Batteries

South Korea’s Samsung SDI lost 5.5% on the Seoul stock exchange this morning. The drop came after the battery manufacturer announced plans to issue new shares to finance production facilities in Europe and the U.S. The new shares will be sold at a 17% discount to Thursday’s closing price. Investors see the new factories as “too little, too late.” Despite a rally in Asian markets, Samsung SDI has been underperforming for some time. Over the past six months, the stock has lost about half its market value. Another major South Korean battery manufacturer, LG Energy Solution, has also seen its stock decline by 20% over the past year. Both companies, which have partnerships with GM and Stellantis, are struggling with an American president who remains skeptical about electric vehicles. GM is even seeing a decline in demand for plug-in hybrid vehicles.

Novo Nordisk Gains Again

Analyst David Evans from Kepler Cheuvreux was long skeptical about Danish pharmaceutical company Novo Nordisk. But now that the stock has undergone a serious “weight loss” of its own, the analyst has changed his stance. Shares of the manufacturer of popular weight-loss drugs Ozempic and Wegovy have nearly halved in value. However, the stock got a boost yesterday thanks to Evans’ new outlook, rising 3.5% to 525 Danish kroner (DKK). His price target is set at 630 DKK. Where there is honey, there will be bees. While many small and large pharmaceutical and biotech companies are scrambling to make breakthroughs in the booming weight-loss drug market, Novo Nordisk and its American counterpart Eli Lilly already have a head start.

Did You Know…

Sony Music has already removed more than 75,000 AI-generated music tracks? Major international artists like Harry Styles, Queen, and Beyoncé are among the most affected. According to the record label, deepfake music is causing enormous damage to the industry.

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