Before the bell: after the rain comes sunshine

American Express surprises, L’Oréal goes shopping for luxury perfume, and Asian markets kick off the week in positive territory.

Both the S&P 500 and the Nasdaq gained half a percent on Friday. Apple (+2%) and Tesla (+2.5%) did even better, but the real standout was American Express (+7.3%). The credit card issuer surprised investors with earnings per share of 4.14 dollar, up from 3.49 dollar a year earlier and above analysts’ expectations of 4.00 dollar. The U.S. consumer, it seems, is still happy to buy on credit — and American Express was even able to reduce its provisions for bad loans. That’s in sharp contrast to the credit-loss fears that haunted Wall Street earlier in the week. In Europe, investors were still on edge Friday: the Euro Stoxx 50 lost 0.8%, and Frankfurt’s DAX dropped 1.8%. In Brussels, the Bel20 fell 1%, with UCB (-2.8%), KBC (-2.9%), and Melexis (-3.2%) among the weakest performers. We expect those stocks to rebound today.

In Asia, markets started the new week on a strong note. Tokyo advanced 2.1%, and Hong Kong’s Hang Seng Index gained 2.4%, recovering part of last week’s losses. Among the winners: Alibaba (+5%), Baidu (+3.5%), BYD (+1.7%), and Tencent (+3.8%). Later today, Sandvik will report earnings in Sweden — the industrial group makes heavy machinery for the mining industry. In the United States, it’s Crown Holdings’ turn, a global producer of metal packaging.

L’Oréal adds a new scent

Four billion euro — that’s reportedly what L’Oréal is willing to pay for the beauty division of French luxury group Kering. According to the rumors, the deal would involve the high-end perfume brand Creed, which Kering itself acquired in 2023 for 3.5 billion euro. The move signals a strategic shift for Kering. Where the company previously sought to develop beauty products in-house, it now seems ready to hand that over to a specialist like L’Oréal. Along with the Creed brand, L’Oréal would also acquire the rights to develop beauty and fragrance lines for Kering’s fashion labels, including Bottega Veneta, Balenciaga, and McQueen. Kering announced a corporate restructuring and a new CEO back in June. Investors appear to like the new direction — the stock has climbed more than 50% in the past four months.

New iPhones selling like hotcakes

Against all expectations, Apple may have another hit on its hands with the iPhone 17. Based on early sales figures, analysts forecast that Apple’s smartphone revenue will rise 4% this year to 209 billion dollar, followed by another 5% increase next year. Upgrades to the cameras, screens, and batteries are convincing many users to trade in their old devices for the latest model. Delivery times for the new iPhones are now 13% longer than last year — a classic sign that demand exceeds supply. Long queues have returned outside Apple Stores. Still, analysts at Jefferies warn that expectations may be too high, arguing that other market watchers are getting ahead of themselves. Time will tell who’s right.

Did you know…

Even with a likely ceasefire in Gaza, defense stocks still took heavy hits on Friday: Rheinmetall (-6.4%), SAAB (-4.4%), and BAE Systems (-3.1%) all lost ground.

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