Before the bell: equity investors remain calm, bond investors on edge

Tim Cook is stepping down at Apple. Elia is being re-rated as a growth stock, and Azelis has already recovered nearly 50%.

At 2 a.m. our time on Wednesday—so overnight—the ceasefire between the United States and Iran expires. Investors are watching closely to see whether a deal or an extension will emerge. Markets are not expecting the worst—bombs and escalation—as European equities started the week with only a modest decline of about one percent, while Wall Street slipped by just a few tenths of a percent. That did, however, bring an end to thirteen consecutive trading days, often marked by strong gains. Notable winners included JPMorgan Chase (+22.2%) and Salesforce (+2.3%). Apple gained 1%. After the close, CEO Tim Cook announced that John Ternus will take over leadership from September. Within the Bel20, Elia Group (+1.6%) led the gains. Elia continues to receive target price upgrades after the return on investments in Belgium was increased by 90 basis points. Once seen as a bond proxy, the stock is now viewed as a growth name. In contrast to equities, tensions around Iran consistently spill over into bond markets. Yields on short-term bonds in particular moved higher, reflecting expectations of rising inflation and, consequently, higher policy rates from central banks.

In Asia, Tokyo and Hong Kong are trading about half a percent higher this morning. On the central bank front, Kevin Warsh, nominated by Donald Trump to chair the Federal Reserve, will outline his plans later today in the US Senate. On Wall Street, UnitedHealth Group, 3M and Halliburton report earnings before the open. After the close, Intuitive Surgical will publish results.

Customers ordering out of fear

Azelis (+1.4%), the Belgian distributor of chemical and additive formulations for sectors such as pharmaceuticals and food, has rebounded nearly 50% since its low on 20 March. Even so, the stock still trades at only half its level from early 2025. The company had been hit by customers consistently delaying orders due to prolonged uncertainty around import tariffs. The war in the Middle East initially pushed the share price lower, but as tensions escalated, the stock began to recover. Beyond what now looks like an exaggerated decline from a long-term perspective, expectations are shifting: potential shortages of chemical products could prompt customers to accelerate orders, fearing supply disruptions if the Strait of Hormuz remains blocked.

Barco struggles to regain momentum

Barco indicated with its annual results that it expected growth mainly in the second half of the year. However, with this morning’s trading update after the first quarter, the imaging group acknowledged that if current market conditions persist, its full-year targets may not be met. Revenue declined sharply by 15%, or 8% excluding negative currency effects. Orders held up better, but Barco continues to face a familiar issue: in uncertain environments, customers quickly postpone purchases. For now, that makes it difficult to return to profitable growth. Investors had already anticipated some of this. The share price is down 15% this year and trades at half its level of five years ago. Positives remain: the stock is inexpensive and the balance sheet is strong.

Did you know…

that the downgrade of Belgium’s credit rating by Moody’s has not (yet) affected the yield spread with Germany? However, S&P Global—the most influential rating agency—is due to publish its assessment on Friday.

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

(Uitgelichte afbeelding: https://www.flickr.com/photos/farber/1043600596)