Before the bell: Hedge fund manager Ray Dalio thinks the 1970s are back

All eyes on Verisure’s stock market debut in Stockholm. Gold at 4,000 dollar makes the National Bank of Belgium shine again.

For a change, nearly all markets ended in the red yesterday — though losses rarely exceeded 1%. A small group of AI infrastructure suppliers still gained ground, led by AMD (+3.8%), while Nvidia (-0.3%) and other chipmakers fell. Even new AI darling Oracle (-2.5%) lost traction. The debate over whether AI is becoming a bubble naturally continued. American investor Robert Kipp deVeer warned that the massive capital inflows into AI data centers signal looming overcapacity. Tesla slipped 3% after launching budget versions of the Model Y and Model 3. Several chipmakers, including ASML (-3.9% in its U.S. listing) and Applied Materials (-5.5%), also declined after being named by a China task force in the U.S. House of Representatives as “drivers of the Chinese chip industry.” Ray Dalio, founder of hedge fund Bridgewater Associates, advises investors to allocate 15% of their portfolios to gold. The gold price reached 4,000 dollar per ounce yesterday for the first time. Dalio sees parallels with the 1970s, marked by large government deficits and high inflation. That inflation, however, isn’t coming from Germany — where factory orders fell for the fourth consecutive month in September.

In Asia, Hong Kong is down 0.8% this morning, while Tokyo is little changed. Umicore announced it is monetizing its gold reserves, bringing in 410 million euro in extra revenue. Today’s focus will be the stock market debut of home-security group Verisure in Stockholm, the largest IPO in Europe in years. The company represents a European growth story with high profit margins and what seems to be a reasonable valuation. Shares were priced at 13.25 euro, valuing Verisure at 13.7 billion euro.

Dell joins the AI club

Dell Technologies — no longer “Dell Computer” — gained 3.5% yesterday and is increasingly seen as an AI-related stock, since it supplies servers for data centers. The company raised its guidance, yet trades at only 15 times forward earnings, far below typical valuations for the most popular AI names. Perhaps Dell is indeed helping to build the AI infrastructure, but it’s doing so in a segment with fierce competition. Its operating margin of just 7.25% doesn’t exactly point to dominant market power.

Fewer Americans hitting the bottle

American drinks and beer group Constellation Brands rose 1% yesterday, after reporting an 8% drop in comparable quarterly revenue post-market on Monday. Still, investors had expected worse. The company cited a tough environment: younger consumers are drinking less, and alcoholic beverages are falling out of favor. On the one hand, people are paying more attention to their health, and rising cannabis use is another reason for weaker alcohol sales. Some analysts even point to lower immigration under Trump’s policies. Constellation Brands holds the U.S. rights to Mexican beers Corona and Modelo Especial from AB InBev, which is why AB InBev analysts also watch the U.S. brewer’s results closely — though the outlook doesn’t look particularly promising.

Did you know…

that the National Bank of Belgium’s share price has risen 40% over the past six months? Although the Belgian government maintains that minority shareholders have no claim to the bank’s gold, some investors are starting to dream again.

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