Before the Bell: Small steps toward records—and Thursday

Oracle quadruples its order book. Belgian REIT WDP and four other stocks join the AEX 30.

New records for the S&P 500 (+0.3%) and Nasdaq (+0.4%). With such small steps, this record run could last a while. The Stoxx Europe 600 stood still, and national indices hardly moved either. The Bel20 gained 0.3%, supported by a 4% rebound in Sofina and a 2.6% rise in D’Ieteren. Bond markets were also calm. Investors are in wait-and-see mode: Thursday is the real market mover, when the European Central Bank meets and U.S. inflation data for August are released. No action is expected from the ECB, but traders will scrutinize every word of the policy statement. Big tech continues to drive markets. Nvidia rose 1.5% and Alphabet gained 2.4% after its cloud chief said the rapid expansion of sales reflects years of preparation and that the company will keep winning market share. That may be true—Microsoft is even outsourcing AI cloud traffic for years to rivals like Nebius (+44%). Apple unveiled a new ultra-slim iPhone, but its stock fell 1.5%.

In Asia, markets opened upbeat. Tokyo rose 0.5%, and Hong Kong climbed 1.3% led by Baidu (+4%). In Brussels, TINC reports results. Otherwise, it’s a quiet agenda—the calm before Thursday’s storm of U.S. inflation numbers.

Belgian REIT joins Dutch index

It was already known that Amsterdam’s AEX would expand from 25 to 30 constituents. Yesterday after the close, it was confirmed that Belgian real estate investment trust (REIT) Warehouses De Pauw (WDP) will be among the five new entrants. With 43% of its property portfolio in the Netherlands, ahead of Belgium (34%) and Romania (18%), WDP easily qualifies. As in the Bel20, foreign companies can be included if they have significant operations in the Netherlands. The inclusion, effective Monday, September 22, may not trigger immediate buying of WDP shares (+1.5%), but it will raise visibility. The other new entrants are CVC Capital Partners, InPost, JDE Peet’s, and Just Eat Takeaway. The last two are surprising choices, since both are subject to takeover bids and may exit the index again soon. Unlike WDP’s logistics real estate, the other newcomers cover various sectors:

• CVC Capital Partners: a well-known private equity investor
• InPost: operator of parcel lockers across Europe
• JDE Peet’s: coffee and tea products with brands such as Douwe Egberts, Senseo, and Pickwick
• Just Eat Takeaway: online food delivery platform connecting restaurants, riders, and customers

Order book worth 455 billion dollar

In big tech and AI, even a slight miss on expectations can be forgiven. Oracle reported quarterly revenue of 14.93 billion dollar (vs. 15 billion expected) and earnings per share one cent shy of forecasts at 1.47 dollar. Usually, such misses weigh on richly valued stocks. But not this time: after the close, Oracle shares jumped 21%. The company revealed it had signed four massive multi-billion-dollar contracts with three clients. As a result, its contract backlog more than quadrupled to 455 billion dollar. Oracle expects this figure to exceed 500 billion dollar in the coming months. Over how many years those contracts will be billed is unknown.

Did you know…

that energy prices could fall sharply next year? A glut is expected in LNG, with production rising strongly in the U.S. and elsewhere while demand in China lags behind.

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