Before the bell: strong gains in Hong Kong

In Belgium the “Week of Money” begins, China welcomes encouraging macroeconomic data, and on Wall Street investors are looking ahead to cost-cutting at Meta and the keynote speech by Nvidia chief executive Jensen Huang.

Friday the 13th showed no black cat on the stock market landscape. Rather, a chameleon. While markets were deep red in the morning, a few hours later they had turned green. Shortly after the opening, the Bel20 was down 0.8%, then rose 1.3%, only to close the day with a loss of 0.8%. The share of brewer AB InBev (+1.8%) was a notable exception in an otherwise red landscape. On Wall Street, traders also turned their carts around. The S&P 500 traded an early gain of 0.9% for a loss of 0.6% by the closing bell. Within the index, the performance of memory card specialist SanDisk (+6.9%) stood out. Micron Technology (+5.1%), Blackstone (+4.6%) and Estée Lauder (+4.3%) also had a strong day. Beauty retail chain Ulta Beauty (-14.2%) and technology company Adobe (-7.6%) were the biggest losers. Broadcom (-4.1%), Live Nation (-4%) and Meta (-3.8%) were also notable laggards.

In Tokyo, share prices are following the direction of Wall Street. The Topix index is down 0.4%. In Hong Kong there is a gain of 1.5% this morning after the publication of encouraging figures for Chinese industrial production and retail sales. The Hang Seng index includes 88 stocks, and the share of carmaker BYD (+7.9%) is the strongest riser this morning, followed by smartphone and car manufacturer Xiaomi (+5.5%). Today we will also receive results from Belgian coffee machine producer Fountain. Globally, investors are looking ahead to what chief executive Jensen Huang will have to say at Nvidia’s AI conference. In Belgium, the “Week of Money” begins today. This annual tradition focuses on financial education for young people. At Spaarvarkens.be we wholeheartedly support this FSMA initiative, because we too are convinced of the importance of financial literacy.

Money burning a hole in his pocket

It was a striking confession by Nico Inberg during the investor debate organised by Lynx on 27 January. “Mark Zuckerberg has a hole in his hand.” Yet Inberg still recommends Meta’s stock, perhaps under the motto: “those who spend too much can also cut back.” That is apparently exactly what Mark Zuckerberg is now planning to do. The founder and chief executive of Meta Platforms is reportedly preparing to cut up to 16,000 jobs at Meta. That amounts to as many as one in five jobs at the social media company. Zuckerberg has carried out major cost-cutting measures before. In November 2022 Meta announced 11,000 layoffs (13% of the workforce) and a few months later, in March 2023, another 10,000 jobs were cut. At the time this gave the share price a boost. For that reason I expect the new round of cost cuts to once again give shareholders the prospect of higher share prices. The hole in Zuckerberg’s hand will be patched up once again—at least temporarily.

The Week of Money

Today the “Week of Money” begins. In the eleventh edition of this themed week, the FSMA once again wants to highlight the importance of financial literacy among young people. At Spaarvarkens we applaud the initiative. For us, every week is a “Week of Money.” Financial knowledge is essential. We certainly do not underestimate our young people. This morning the FSMA already issued a press release stating that one in two young people manages their budget properly, on paper, through a digital spreadsheet, or via their bank’s app. That is fantastic and shows that many young people are doing what our governments still cannot. The same press release also points to a phenomenon that is gaining ground and raises some concerns for us: “buy now, pay later.” We are obviously not fans of this trend, because it encourages consumers to take on credit for purchases they might be better off avoiding. We hope teachers remind their students that the peace of mind that comes from saving and investing wisely is far more valuable than the short-lived pleasure of consumption.

Did you know…

that today marks the sixth anniversary of the Covid crash? On 16 March 2020 the Dow Jones fell by no less than 2,997 points, or 13%. In points, that was the largest one-day drop ever recorded at the time.

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