Before the opening bell: Europe holds its ground

Despite new trade tariffs on eight European countries, European stock markets are holding up relatively well. Later today, attention will turn to the figures from tech giant Netflix.

The renewed tariff threat from the United States had little impact on European markets on Monday. The Euro Stoxx 50 (-1.7%) did lose ground, but is still trading less than 2% below its most recent record high. Among the biggest losers were stocks such as Lanxess (-5.7%), Ubisoft (-7.3%) and Adidas (-5.2%). Bayer (+7%) bucked the trend after the US Supreme Court agreed to hear Bayer’s appeal in thousands of lawsuits related to its Roundup weedkiller. In Brussels, IBA (+6.7%) was the strongest gainer after securing a major contract in the US. D’Ieteren (+6.5%) also benefited from a Financial Times report suggesting the group is preparing an IPO of Belron.

In Asia this morning, the gold price continued to rise, climbing above 4,700 dollars per ounce. In Japan, the Topix index is down 0.8%. Attention will soon turn to the reopening of US markets, which were closed yesterday for Martin Luther King Day. Futures point to a 1% decline for the S&P 500. In Brussels, there was quite a bit of pharma-related news. Drugmaker Hyloris has entered into a partnership to bring the acid suppressant Pantoprazole IV to market in the European Union, the UK, Switzerland and Norway. Gimv, meanwhile, will invest an undisclosed amount in German biopharmaceutical company Exciva. Technology company Crescent will carry out a reverse stock split today. For every 1,000 shares, investors will receive one new share, allowing the company to shed its penny-stock status. Later today, 3M, Netflix, United Airlines and Interactive Brokers will publish their results. We will also get the German ZEW index, offering insight into the health of the German economy.

Why the market is wrong about US software companies

One of the biggest losers on the stock market in 2026 so far? US software companies. With the rise of AI and so-called “vibe coding”, investors fear that software companies no longer have sufficient protection around their business models. After all, AI can easily replicate software, potentially increasing competition and making it harder to raise prices. The sector I want to focus on more at Spaarvarkens from this year onward is precisely software. Companies such as Adobe, Duolingo and Salesforce were punished last year, falling by 31%, 57% and 30% respectively. Yet revenues and profits at all three companies have continued to grow since the breakthrough of ChatGPT. And once you are a customer, switching is not easy. Entire ecosystems run on the products of Salesforce and Adobe and are too critical to replace. Duolingo customers are fiercely loyal because gamification encourages them not to lose their “streaks” and to protect their rankings. The value of these companies therefore lies not only in the software itself, but also in their distribution channels and networks. That gives them access to more data than competitors and a better understanding of what works and what does not. If revenues keep growing while fixed costs remain stable, as is traditionally the case with software businesses, then there are certainly opportunities here in the years ahead.

It’s about company results, stupid!

Investors like to pay a lot of attention to macroeconomic news, but in our view sometimes too much. For example, following the latest US trade tariffs on Europe, Citigroup’s analyst team downgraded its recommendation on European equities from “buy” to “hold”. But will these tariffs really have as much impact on markets as they once did? Personally, I doubt it. There is an unwritten rule in markets that themes which recur frequently tend to have diminishing impact over time. In April 2025, US trade tariffs triggered a sharp sell-off on European stock markets. Yesterday, Germany’s DAX index fell by just 1.3%. Macroeconomics is great for the media, and for me as a writer, because readers enjoy a compelling narrative. Reading such stories for entertainment and excitement from time to time is perfectly fine. But as an investor, there is one thing you should focus on: company results. Will Microsoft sell fewer subscriptions because of tariffs? No. Will Belgians make fewer phone calls with Proximus because of tariffs? Also no. Let Citi downgrade its recommendation. It makes for a good story. But in the end, it all comes down to company results. And that is a very different story.

Did you know…

that US stock markets more often open lower after a long weekend such as Martin Luther King Day? Investors are confronted with a backlog of news all at once, which often increases volatility upon reopening. In fact, the S&P 500 fell on the day after the holiday in seven of the past ten years, with an average decline of 0.7%.

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