Before the bell: gains in China

Investors respond to reassurance that China will take sufficient measures to support its economy.

Wall Street ended the week on a positive note. The Nasdaq gained 0.3% on Friday, while the S&P 500 closed 0.6% higher. On a weekly basis, both indices posted a gain of 1.1%. JP Morgan (+4.4%), Boeing (+3%), and Goldman Sachs (+2.5%) performed well on the last day of the week. In Brussels, UCB (+2.1%), real estate companies Aedifica (+1.7%), WDP (+1.6%), and Cofinimmo (+1.5%) were the top performers on Friday. IBA (Ion Beam Applications) jumped 14.2% after receiving high praise in a German investment magazine. The Bel20 gained 0.9%, slightly outperforming the Euro Stoxx 50 (+0.7%). Across Europe, Novo Nordisk (+2.2%) and Airbus (+3.9%) posted gains, while Bayer dropped 1.9%.

This morning, investors are reacting relatively well to the announcement made in Beijing on Saturday. China’s Finance Minister stated that the government would take sufficient measures to give the economy a boost. While no specific amount was mentioned, the declaration that it would be “sufficient” evokes memories of Mario Draghi’s famous “whatever it takes” speech. In July 2012, the former president of the European Central Bank assured that he would do whatever was necessary to resolve Europe’s debt crisis, which marked a turning point in market sentiment at the time. Hong Kong’s stock market is trading around Friday’s closing level this morning, but in Shanghai, share prices are up an average of 1.9%. Automaker BYD rose by 2.6%.

A fairytale in Hollywood

Watching one of the many videos from Tesla’s event late last week at Warner Bros. Studios in Hollywood, you can’t help but think: “this company has it all figured out.” Tesla’s robotaxis, robots, and the self-driving minibus were presented flawlessly. This could very well be what the future looks like. Yet, Tesla’s stock dropped by 8% on Friday. Did investors expect more? Indeed. Elon Musk stated that the robotaxi would go into production “by 2027.” In the recent past, this timeline was often “next year.” Now we implicitly hear “late 2026.” This is, in effect, a disguised profit warning.

Bank on the rise

JP Morgan was the first major U.S. company to report quarterly results on Friday. The bank posted a net profit of 12.9 billion euros. Although this is 2% lower than the same quarter last year, it still exceeded expectations. Analysts had anticipated an 8% decline. While a series of anticipated interest rate cuts could lead to lower interest income, investors seem convinced that this decline will be offset by increased loan applications. The stock was heavily bought on Friday, closing the day 4.4% higher.

Did you know…

that Morgan Stanley and JP Morgan were founded by the same family? Henry Morgan, a grandson of John Pierpont Morgan, established the brokerage firm Morgan Stanley in 1935 after U.S. regulators prohibited commercial banks like JP Morgan from operating in the stock market.

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