Before the bell: dollar above euro

The impending collapse of the French government threatens to bring uncertainty to European markets. Meanwhile, we await a press release from Exmar, as the United States imposes new export restrictions on chips bound for China.

The euro-dollar exchange rate tells the story: since Trump’s election, investors have favored the United States, while Europe struggles. Strong U.S. economic data and European uncertainty contribute to this trend. Following Germany’s government collapse last month, France now appears close to losing its own government. Le Pen has announced a motion of no confidence with the left-wing coalition, creating additional instability. The yield gap between German and French bonds widened to nearly 90 basis points. Meanwhile, the S&P 500 reached its 54th record close this year, and Japan’s stock market surged.

In Brussels, Floridienne gained 8.1% after strong earnings, KBC rose 1% thanks to a new buy rating from a U.S. investment firm, and Syensqo climbed 3.4% following a Deutsche Bank buy recommendation. All eyes are on Exmar, whose trading was suspended yesterday at 5 p.m. after a sudden spike. This morning, it became clear why: Saverex announced a new takeover bid for Exmar at 11.50 euros per share. Later today, Salesforce is set to report its earnings.

To Split or Not to Split?

One way to create value for shareholders is splitting holdings into separate businesses, and Vivendi’s CEO Vincent Bolloré seems ready to do just that. The media conglomerate plans to divide itself into four parts: the Canal+ Studio division would be listed in London, the Havas marketing division in Amsterdam, and the Louis Hachette Group on another exchange. This split could reduce the discount at which Vivendi trades relative to its individual components. However, activist investor CIAM has strongly opposed Bolloré’s plan. With Bolloré controlling nearly 30% of Vivendi’s shares, it will be challenging for CIAM to rally enough shareholders. The outcome will be determined at the next general meeting.

The Soup Is Not Always Served Hot

How do investors react to bad news that’s not as bad as feared? That was the question yesterday when the U.S. announced new export restrictions targeting China’s computer chip sector. Aimed at curbing China’s AI ambitions, the measures include sanctions on 140 Chinese companies. Market reaction was closely watched, especially for companies like Samsung Electronics during Asian trading hours. The answer? Little to no movement. In fact, Western companies such as ASML, AMD, ARM Holdings, and Micron Technology closed higher on Monday. Clearly, investors had expected worse. The real question now is how markets will react when Trump assumes office and potentially introduces more sanctions.

Did You Know…

The oil tanker industry is struggling? Amid falling oil prices and peace talks in the Middle East, the sector has taken a hit. The Breakwave Tanker Shipping ETF has lost 29% since October 18.

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