Before the bell: gold drops, golden oldies shine

Netflix disappoints, but 3M, General Motors, and Coca-Cola deliver strong results for their shareholders.

After a bright start in Asia yesterday, European and U.S. markets failed to keep up the momentum. The average European stock rose just 0.1%, while the Bel20 managed a modest 0.3% gain. In the United States, the S&P 500 was flat, and the Nasdaq slipped 0.2%. Gold, which had been on a record-breaking run, fell more than 5%. Still, a few corporate heavyweights made up for it with strong quarterly results. General Motors (+14.9%) raised its full-year profit guidance, helped by the U.S. government’s tariff-compensation program, designed to support automakers producing on American soil. Coca-Cola rose 4% after announcing plans to spin off its African bottling operations into a separate group.

In Asia, markets were mixed this morning: Hong Kong’s Hang Seng Index fell 1.1%, while Japan’s Topix gained 0.8%. Today’s earnings slate features SAP in Germany, and in the U.S., results are expected from Vertiv, Hilton, AT&T, Thermo Fisher, Tesla, IBM, and Lam Research.

Golden oldies back in style

American conglomerate 3M reported third-quarter revenue of 6.3 billion dollar (+3.5%), with earnings per share rising 10% to 2.19 dollar, well above analysts’ expectations of 2.07 dollar. The strong results prompted management to raise full-year guidance to 8.05 dollar per share on 2.5% revenue growth. Once thought to have lost its sparkle, the maker of Scotch tape and Post-its has more than doubled in value in just two years. Investors had forgotten that even a “golden oldie” can profit from new megatrends such as vehicle electrification, data-center demand, and the global energy buildout. You’ll find a deeper look at this topic in next Saturday’s Spamalot. Just be cautious now that even “contra-indicator” Jim Cramer is calling 3M a “great growth stock.”

Brazilian tax hit knocks Netflix

Netflix’s third-quarter results came in below expectations. Revenue reached 11.5 billion dollar, but profit was 5.87 dollar per share, well short of analysts’ forecast of nearly 7 dollar per share on similar revenue. The company blamed a tax dispute in Brazil, which could cost 620 million dollar. Although Netflix is contesting the charge, management has already booked the expense in its income statement. In after-hours trading, the stock fell 6.5%, wiping out roughly 34 billion dollar in market value. That seems excessive relative to the fine, but with a price-to-earnings ratio of 53, Netflix is hardly cheap.

Did you know…

that OpenAI, the company behind ChatGPT, has launched its own web browser, called Atlas? The AI-powered browser can even control your cursor and keyboard to perform tasks automatically — such as booking tickets or filling out forms for you.

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