Before the bell: Japanese economy steps back

Alibaba crashes while BYD hits a new all-time high. Today is the last day to qualify for Cofinimmo’s dividend.

Wall Street delivered mixed results yesterday. The Nasdaq dipped 0.2%, while the S&P 500 edged up 0.4%. Meta (-2.4%) lost ground after announcing a delay in the launch of its artificial intelligence model. At Coinbase (-7.2%), customer data was stolen in a hacking incident. The hacker is demanding 20 million dollar, but Coinbase refuses to pay and will instead invest more heavily in cybersecurity—possibly up to 400 million dollar. John Deere (+3.8%) was rewarded for strong earnings. In Europe, markets climbed between 0.2% and 0.7%. French gaming group Ubisoft plummeted 18.2%, and ThyssenKrupp fell 12.5%. On the upside: Bayer (+3.1%), Engie (+3.6%), and Rheinmetall (+5.7%). Among Belgian REITs, Aedifica dropped 5.2%, while takeover target Cofinimmo gained 1.8%. That’s not surprising—Aedifica’s dividend was cut yesterday. Anyone buying Cofinimmo shares today will still qualify for the dividend, which will be detached Monday morning and paid on Thursday. The dividend amounts to 6.2 euro gross or 4.34 euro net.

In Tokyo, the Topix traded flat this morning, which is a relatively mild reaction to news that Japan’s economy contracted by 0.7% in the first quarter. In Hong Kong, the Hang Seng Index lost 0.8%. Just like yesterday, Li Auto (+2%) and BYD (+2.9%) performed well. Alibaba (-5.3%) was the biggest loser. The Chinese tech firm also fell 7.6% on Wall Street yesterday following disappointing earnings. At 4:00 p.m. Belgian time, the University of Michigan will publish its consumer sentiment index. EVS will release first-quarter figures after the market closes.

Dear John

John Deere (+3.8%) reported its earnings before the bell yesterday—and judging by the share price reaction, the numbers were strong. No surprise to those who heard the December 6th analysis by student Lars Van Gompel, who walked us through the figures and product lines of the iconic American maker of agricultural machinery. Since then, the share price has gained 17%. Lars also noted that John Deere’s plans to build a new factory in Mexico did not sit well with Donald Trump. Back in September, Trump had already threatened a 200% import tariff on tractors made south of the border. Deere took the hint. Yesterday, the company emphasized its 10-year, 20 billion dollar investment plan under the banner “Building America since 1837.” Trump will love it.

Sometimes less is more

In the past, some of America’s corporate giants were split up to avoid monopolies. In 1911, Standard Oil gave rise to ExxonMobil, Chevron, and ConocoPhillips. In 1984, AT&T was broken up into seven regional “Baby Bells.” Microsoft has also faced antitrust scrutiny but has so far avoided a breakup. Still, such splits can create value. Tech analyst Gil Luria now argues that a breakup of Alphabet into separate divisions could unlock 300 dollar per share in value. The stock currently trades at only 165 dollar. Swiss asset manager Pictet has also said Alphabet is undervalued. Luria is not a buyer at the moment but says Alphabet would be his favourite among the big US tech stocks—if it were open to a breakup. Over the past year, Alphabet has fallen 5.7%, while the Nasdaq has gained 14.5%.

Did you know…

that Alphabet went public in August 2004, just six years after it was founded? Back then, the company was still called Google and had a valuation of 23 billion dollar with a price-to-earnings ratio of 80—considered sky-high at the time. Today, Alphabet has a market cap of 2.01 trillion dollar and is seen as ‘cheap’ in comparison.

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