Before the Bell: Back to Square One

The Tokyo Stock Exchange is now trading higher than when Trump first announced his latest round of trade tariffs. In Belgium, earnings season is gradually getting underway.

If the Japanese stock market is any indication for Europe, things are looking up for investors. Today, Japan’s Nikkei index rose 0.4%. That may not sound spectacular, but it’s symbolically significant: with today’s gain, the index has recovered all losses since Trump announced new tariffs in early April. Toyota Industries stood out on the Tokyo market amid rumors that its chairman is considering a full takeover of the company. In the U.S., investors ended last week on an upbeat note. The tech-heavy Nasdaq climbed 1.3% after Google-parent Alphabet posted strong earnings. That bodes well for this week as Meta, Microsoft, Amazon, and Apple are all set to report their results.

In Belgium, all eyes are on how investors will respond to a warning from credit rating agency Standard & Poor’s. The agency cautioned that it might downgrade Belgium’s credit rating. The same goes for Dutch soil researcher Fugro. Meanwhile, the European Medicines Agency (CHMP) gave a positive opinion on approving Vyvgart—the blockbuster drug from biotech firm Argenx—for the treatment of CIDP in Europe. Later today, we’ll see earnings from Domino’s Pizza, followed by steelmaker Nucor and offshore drilling firm Transocean after the U.S. market closes.

1 + 1 = 3

“Invest in what you know”—a famous motto from Peter Lynch, the legendary manager of the Magellan Fund from 1977 to 1990. U.S.-based DoorDash seems to be following that advice with its bid for European rival Deliveroo. The offer stands at 180 pence per share, a 23% premium to Friday’s close. Whether the bid will succeed remains unclear. Since its 2021 peak, Deliveroo’s share price is still down more than 60%.

We wouldn’t personally invest in Deliveroo. The author of this piece once delivered for them as a side gig—after a day job as an investment advisor at ING. Margins in the food delivery sector are razor-thin, and the risks are high. Deliveroo often pays riders as freelancers, while many European countries demand they be treated as employees—which comes with higher social security costs. If DoorDash wants Deliveroo, they can have it. Interested in the sector? Look at Asia’s Grab instead. And no, that’s not just because we ordered from them ten times this week in Thailand. Invest in what you know, right?

Don’t Be Alarmed Later

Investors holding Umicore stock shouldn’t be startled if the price dips today. There’s a good chance the stock will open in the red—not due to poor results or a bad day on the market, but simply because Umicore is paying out a 0.25 euro dividend. On such days, shares often drop to reflect the fact that the dividend has been priced out. That said, it’s not a hard rule—sometimes shares remain stable, especially when the payout is small. Investors won’t see the dividend hit their accounts immediately. Today is the ex-dividend date, meaning only shareholders who held the stock yesterday are eligible for the payout. The actual distribution will take place on April 30.

Did You Know…

Peter Lynch became famous for achieving an average annual return of 29.2% with the Magellan Fund from 1977 to 1990? That’s more than double the return of the S&P 500 over the same period, making him one of the most successful fund managers of his era.

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