Before the bell: European stocks steal the spotlight in the shadows

Umicore leads the Bel20. US banks, along with ASML and Barco, kick off the earnings season.

Last week, most of the attention was on fresh record highs for the US stock indices, but overall Wall Street ended the week slightly down. Europe performed much better. The Euro Stoxx 50 gained 1.8% and is now up 10% since the start of the year. As we’ve come to expect, Donald Trump stole the show again on Thursday and Friday by pre-announcing new import tariffs: 35% for Canada and 30% for the European Union, effective 1 August. This could weigh on markets today, but investors also know that the proverb “speech is silver, silence is golden” doesn’t quite apply to the American president. A surprisingly large number of European stocks outperformed last week, with gains for Bayer (+4.4%), Airbus (+4.5%), Mercedes (+6%), Prosus (+4.2%), and Umicore (+3.7%). These are strong results from names that many investors would not expect. And the year-to-date gains are even more striking: Bayer is up 41%, Umicore 48%. Sometimes laggards can pay off too.

This morning, Tokyo trades flat, while Hong Kong climbs 0.6%: Chinese exports rose in June despite the ongoing tariff war with the United States. JPMorgan, Wells Fargo, and BlackRock will kick off the new earnings season in the US on Tuesday. On Wednesday, we’ll hear from ASML and Barco, and on Thursday, Taiwan Semiconductor and Netflix will report. Also on Tuesday, we expect US inflation data. Investors will be watching closely to see whether the import tariffs had any effect on June’s price levels.

Insuring damage is big business

You may not have heard of Gjensidige Forsikring, but it’s a major Norwegian non-life insurer and a member of the Stoxx Europe 600 Index. On Friday morning, it released excellent second-quarter results. The share jumped 9%. Profits surged thanks to rising premium income combined with fewer claims being paid out. The key metric here is the Combined Ratio—the ratio between premiums collected and expenses paid. This dropped from 82.6% to 79%, meaning the Norwegian “insurance company” kept 21% of premium revenue as profit after claims and costs. Ageas is also aiming for growth in non-life insurance, with the added advantage that it can reinsure its own risks thanks to its diversified operations across Europe and Asia.

A jolt of energy for Brussels

Since last Wednesday, the Brussels stock exchange welcomed a rare newcomer: EnergyVision. That alone is worth celebrating. Less ideal is the fact that, like many Brussels-listed companies, the stock has very limited free float—just over 5% of shares are publicly traded. That helps explain the extreme share price volatility we’ve seen. What’s more, investors could only subscribe through the banks leading the IPO, which likely contributed to the surge in price driven by enthusiastic customers and employees. With a 25% gain, the share now trades near the top of its IPO price range. Whether this business story becomes a success will depend on the viability of its model—EnergyVision is still a pioneer in Belgium, acting both as a green energy producer and a retail energy provider, for example through its concession to install charging stations at NMBS train stations. The stock valuation is steep, but so are its growth ambitions.

Did you know…

European products in the United States are already nearly 25% more expensive this year? The euro has appreciated 14% against the dollar, and Donald Trump has imposed a general import tariff of 10%. Often, producers and/or importers absorb part of that cost.

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