Before the Bell: Defense Stocks Rally as Ukraine Peace Plan Falters

European defense stocks are leading the rebound as investors position themselves for a Federal Reserve rate cut tonight.

With peace talks surrounding the war in Ukraine now seemingly collapsing, investors are rotating back into defense names that corrected sharply over the past month. Shares of Rheinmetall (+3.7%), Leonardo (+2.6%) and Hensoldt (+7.3%) were among the strongest performers. In the U.S., the steep drop in JPMorgan (-4.7%) drew attention after the bank told a Goldman Sachs conference that next year’s costs would come in 4 billion dollar higher than analysts had expected. Oil major ExxonMobil (+2%) expects higher profits in coming quarters thanks to shale production. The Nasdaq and the S&P 500 hovered near record highs and ended the session almost unchanged. In Asia, Chinese shares retreated after inflation came in hotter than expected, dampening hopes of a rate cut.

This morning, Belgian construction group CFE announced it has reached a settlement with Befimmo over the ZIN IN NO(O)RD project. According to CFE, the deal should have a positive impact on the 2025 net result and on net financial debt. All eyes are now on tonight’s Federal Reserve meeting. Markets place the probability of a 25-basis-point rate cut at 90%. More important, however, will be Jerome Powell’s press conference, where investors will look for hints about additional cuts in 2026. Today, Adobe and Oracle will publish their quarterly results, and insurer Aegon is hosting its investor day.

Don’t Catch Falling Knives

On 17 September, we wrote about Cracker Barrel’s renewal plans — plans that ignited a national uproar when management proposed changing the logo and Donald Trump publicly opposed it. The issue today? The revamp has been scrapped, but the old problems remain. Revenue fell another 5.7% year-on-year last quarter, while net losses widened to 24.6 million dollar. The collapse in adjusted EBITDA to 7.2 million dollar from 45.8 million a year earlier points to severe margin pressure. With the company now expecting full-year revenue of only 3.2 to 3.3 billion dollar and adjusted EBITDA of just 70 to 110 million dollar, a sharply lower opening seems likely. Be careful with falling knives.

Goalkeepers, Stay in Your Goal!

A goalkeeper who doesn’t dive during penalty shots is seen as a bad one — or so spectators believe. That pressure forces keepers to dive, even though statistics show the opposite: keepers who stay still or delay movement save more shots than those who leap immediately. Politics works much the same way. Leaders feel compelled to “do something” in front of the cameras. But when you want to increase tax revenues, doing nothing can sometimes be more effective. In Belgium, higher aviation taxes are backfiring: the government expects lower revenues in 2026 because Ryanair is cancelling one million seats in response to the tax increase. In the Netherlands, parties such as GroenLinks are proposing exit taxes for companies moving headquarters abroad. What you tax and punish tends to disappear. During Aegon’s investor day today, the insurer will announce that it plans to move its headquarters to the United States by 2028. The relocation will cost an estimated 350 million euro. A message to policymakers: sometimes the best move is to stay still in your goal. It may not look impressive, but diving for the cameras often costs far more.

Did you know…

the silver price closed above 60 dollar per pound yesterday for the first time? Media attention in recent weeks has intensified the rally, and like many markets, new highs often create their own positive momentum.

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