Before the bell: Eli Lilly takes a hit

KBC’s share price climbed towards its May 2007 record, while Novo Nordisk scored a victory over rival Eli Lilly.

On Wall Street, the S&P 500 (-0.1%) closed virtually unchanged, while the Nasdaq gained 0.4%. Pharmaceutical company Viatris, best known for producing Viagra, rose 7.3% after strong results. Peer Eli Lilly also had an excellent quarter, yet its shares fell 14.1% after disappointing trial results for its anti-obesity pill. Cybersecurity specialist Fortinet (-22%) also plunged. Last quarter’s results were fine, but the outlook was weaker. Airbnb (-8%) and Ralph Lauren (-6.5%) were also hit. European markets closed higher, with the Euro Stoxx 50 up 1.3%. BASF (+4.7%), Allianz (+4.1%), Siemens (+3.7%), and ASML (+3%) all posted gains, but KBC (+6.3%) was the standout, with its quarterly results earning applause. Novo Nordisk (+6.7%) also benefited from Eli Lilly’s setback.

In Japan, the Topix is up 1.2% this morning. Technology holding SoftBank (+10.9%), automaker Mazda (+4.5%), and game developer Nintendo (+4.5%) are having a strong day. In Hong Kong, the Hang Seng is down 0.9%, with Alibaba falling 1.8%. Today’s earnings include bpost, Lotus Bakeries, NN Group, and Munich Re.

The greatest comeback

If you think your investments are completely “safe,” the stock market will laugh at you. On 18 May 2007, some investors paid 106.20 euro for the safe-as-houses share KBC. What could go wrong? Quite a lot, as it turned out. The credit crisis, which had already begun in early 2007, worsened in the summer. By September 2008, it had become the second-largest banking crisis ever. After Fortis and Dexia, KBC also had to be rescued by the federal and Flemish governments. On 6 March 2009, you could buy a KBC share for just 5.02 euro. Yesterday, following its earnings release, the share climbed 6.3% to 98.90 euro. Don’t assume that everything will turn out fine if you just wait long enough. At the end of 2008 and start of 2009, the bank was on the brink, just like Fortis, Dexia, and all those bank stocks in the “safe” portfolios of traditional investors. That KBC survived—and may soon hit a new all-time high—is thanks to a combination of circumstances and individuals. Tomorrow, I’ll take you back in time. On Saturday in Spamalot, we’ll revisit the thriller that was the banking crisis for Belgium and for KBC, and explain why the recovery was anything but guaranteed.

The gilded pill

Sometimes a few percentage points make all the difference. Trial results for orforglipron, Eli Lilly’s weight-loss pill candidate, showed an average weight loss of just 12.3%. Novo Nordisk’s pill, by contrast, delivers an average loss of 15.1%. That was enough to give Novo Nordisk a 6.7% gain, closing at 308.85 Danish kroner. Eli Lilly, on the other hand, plunged 14.1%, losing 105.51 dollar to close at 640.86 dollar. This sell-off seems overdone. Novo Nordisk hasn’t yet won the battle with Eli Lilly and still faces plenty of challenges. Eli Lilly posted a 38% revenue increase and a 61% rise in earnings per share. The American pharmaceutical group earned 6.31 dollar per share, beating the expected 5.59 dollar. I’m curious to see where we go today. The stock market is like a box of chocolates.

Did you know…

that today is National Dollar Day? It’s not an official US holiday, but it commemorates 8 August 1786, when the US Congress adopted the dollar as the official currency. Before that, the United States still used various European coins, such as the British pound.

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