Before the bell: 50/50 for 25/50

Today is dominated by the US central bank’s interest rate decision. US Steel shareholders must wait longer for possible approval of a takeover of their company, and Tupperware is already close to bankruptcy.

That the US central bank will announce an interest rate cut tonight is a certainty. We just don’t know yet whether the dollar interest rate will fall 25 basis points or 50 basis points anyway. It also remains to be seen how investors will react to that. Disappointed because it’s only 25? Panicked at a drop of 50? More than satisfied with 25 or 50 basis points? See, that’s why artificial intelligence in investing is quite difficult. People, especially investors, are unpredictable and unpredictable. As a result, the markets hardly took any positions yesterday. Both on Wall Street and in Europe, the indices ended close to previous closing levels. Hewlett-Packard (+5.6%) did manage to move nicely higher after a buy recommendation from Bank of America. In Brussels, the biggest gain in the Bel20 was for Umicore (+4.8%) while UCB shed 3.4%.  

The Hong Kong stock exchange is closed today. In Japan and mainland China, share prices are down 0.2% on average this morning. Later, at 8 p.m. Belgian time, we will know. Then we will know by how many basis points US interest rates fall. 

Will US Steel remain American? 

A good year ago, a share of US Steel paid around $23. But then US sector peer Cleveland-Cliffs launched a $35 bid for its competitor. “Too frugal,” judged US Steel, and not much later shareholders received an offer of $55 per share from Japanese steelmaker Nippon Steel. “Too dangerous,” judged the Biden administration, ”because the acquisition of an American company by a Japanese company could jeopardize the supply of steel in the US.” The closing price of US Steel shares yesterday was barely $36.33. The watchdog to judge whether Nippon Steel’s takeover of US Steel threatens national security is now postponing its decision until after the presidential election. 

Lid on the jar

Last night, as expected, Tupperware requested protection from its creditors. It is already the fourth time since November 2022 that bankruptcy is near for the well-known manufacturer of plastic jars. The protection, known in the US as “Chapter 11,” gives the company some time to negotiate with its creditors. Afterward, either a debt restructuring and often partial debt forgiveness follows, or bankruptcy. Despite the strong brand name, we think it’s time someone had the courage to pull the plug on the company. That is still not to say that it is then definitively “over and out” for Tupperware. Although the old stock will be worthless, the Tupperware brand and a number of branches could be sold to a wealthy acquirer. In that case, the creditors would get some of their pennies back and for the staff, there would hopefully be a little more job security. 

Did you know…

Tupperware was founded in 1946 after chemist Earl Tupper designed a storage box in which food could be kept longer? With that product, families could save money by reducing food waste.