Before the Bell: Markets on edge ahead of 2:30 p.m. data

Sofina beats expectations, but D’Ieteren disappoints. In Asia, markets are higher this morning after Wall Street’s strong rally yesterday.

Wall Street had a stellar session yesterday. The S&P 500 rose 0.8% and the Nasdaq gained 1%. The driver? Anticipation of today’s U.S. employment and unemployment figures, due at 2:30 p.m. Brussels time. Investors expect the data to show relatively modest job creation and a slightly higher jobless rate. That would almost certainly pave the way for the Federal Reserve to cut dollar interest rates at its meeting on September 17. The circle is complete: on Tuesday Wall Street fell on higher rates, by Thursday it rallied on the expectation of lower ones. European stocks also rose yesterday, though more modestly (+0.4%). Siemens Energy (+3.7%), ASML (+3.6%), and Heidelberg Materials (+3.5%) stood out, while Sanofi (-8.3%) and private equity manager CVC Capital Partners (-6.3%) were pummeled. In the Bel20 (+0.2%), D’Ieteren plunged 9.8% after results that were even worse than feared. Argenx (+3.4%), Melexis (+1.5%), and Sofina (+1.5%) had a good day.

Asian markets are also higher this morning. Tokyo is up about 0.5%, while Hong Kong gained 0.7%. In Germany, July factory orders were released this morning. Belysse reports earnings today. And at 2:30 p.m., all eyes will be on the U.S. jobs data.

Sofina calculates net asset value

As of June 30, one share of Sofina was worth 296.38 euro, management announced after the close on Thursday. At the start of the year, the figure was 311.77 euro, a drop of 4.9%. Not great—but not mismanagement either. Sofina’s portfolio is largely invested in companies denominated in dollar, and the U.S. currency fell 13.46% against the euro in the first half of the year. Had Sofina kept its accounts in dollar, results would have looked much better, but European shareholders would still have lost the same amount in the currency translation. The figure was also slightly better than what Sofina communicated on July 22, when it estimated net asset value at 293 euro per share as of June 30. Now, with the euro/dollar rate stabilizing and the dollar even gaining 0.8% since June 30, the actual value is likely somewhat higher today.

Driving on an empty tank

In recent days, I’ve spoken with insurers. “This car insurance also covers you if you get a flat tire or run out of electricity,” one told me. The nightmare scenario for drivers? Running out of fuel. As Luc Tack says: you shouldn’t drive with an empty tank. And yet, some do just that—like the management of D’Ieteren. They even appointed a CEO tasked with loading the company up with debt. An expert in that field, but hardly reassuring. Not surprisingly, the stock plunged 9.8% yesterday. Year-to-date gains shrank to just 0.5%. “The 23% drop in adjusted profit before tax was largely due to higher financing costs.” Predictable. Still, not all is lost at D’Ieteren. As insurers told me: “If your windshield is damaged, go to Carglass and you pay nothing. If you go elsewhere, you pay upfront and we reimburse.” I can advance the invoice, but many cannot. That gives Carglass—and thus Belron, and thus D’Ieteren—a competitive edge.

Did you know…

that D’Ieteren is older than Belgium? Founded in 1805 in Brussels as a carriage maker, the company began producing coach bodies for motor vehicles in the late 19th century. In 1931 it became an importer of American cars, and in 1948 it started importing Volkswagens. It still does so today.

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