Before the Bell: Nasdaq and gold at record highs

Robinhood jumps into the S&P 500 four years after its IPO. Belgian yields follow France’s lead. Klarna eyes Wall Street.

European markets opened the week higher, with the Stoxx Europe 600 gaining 0.5%. The French government lost its confidence vote, as expected. The CAC40 rose 0.8% despite lingering political malaise and the state’s inability to put its finances in order. A bit like Belgium—but even more problematic. On Wall Street, the S&P 500 gained 0.2%, while the Nasdaq hit a fresh record after rising 0.5%. Tech stocks led the way. Broadcom (+3.2%) extended its post-earnings momentum. Investors also appear confident in upcoming results from Adobe (+2.8%) and Oracle (+2.5%). Index provider MSCI rose 3.5%.

In Asia, Tokyo opened at new records this morning but couldn’t hold on. Hong Kong gained 0.6%, while mainland Chinese markets slipped. In Brussels, X-Fab is hosting an analyst day. After hours on Wall Street, Oracle and GameStop are among those reporting results. Apple will unveil new versions of the iPhone and several other products.

Robinhood enters the S&P 500

Soon WDP (Warehouses De Pauw) may join the revamped Dutch AEX, and Argenx is set to be included in the Euro Stoxx 50. But neither compares to a seat in the S&P 500, the world’s most closely tracked index. Yesterday it was announced that Robinhood (+15.8%) will join the index on September 22. The broker only went public in 2021 and became famous as young traders flocked to speculate on meme stocks like GameStop. Trades on Robinhood are free, but the platform makes money by selling order flow data to market makers, as well as by offering options trading and crypto storage. Since January, the stock has surged 170%. Its market capitalization of 90 billion dollar secured it a place in the S&P 500. After yesterday’s rally, its market cap climbed to 104 billion dollar.

Customers don’t become shareholders

Swedish payments group Klarna is setting its IPO price today. The company wants to list on Wall Street—a better fit than Europe, given its business model as a consumer credit provider. Klarna fronts online purchases and collects later, often with late-payment fees. For websites, the service boosts sales. For consumers, however, it is a debt trap. Back in 2021, Klarna attempted a listing but pulled back amid fears of tighter regulation. At the time, founder Sebastian Siemiatkowski was aiming for a valuation of 45 billion dollar. Today, at the top of its price range, the company would be valued at just 14 billion dollar. Most shares being sold are existing ones, and the firm is still loss-making. We give Klarna no credit—but in the U.S. IPO market, anything can happen.

Did you know…

that Belgian government bond yields last week began tracking the rise in French yields, while those of other European countries such as Spain and Italy remained stable?

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