Before the bell: Heads up — Wall Street closes early today

U.S. stock markets posted new records, while investors are taking profits this morning in Hong Kong.

Both the S&P 500 (+0.5%) and the Nasdaq (+0.9%) closed at all-time highs yesterday. UnitedHealth (-5.7%) gave up its gains from Tuesday, causing the Dow Jones to end slightly lower. Beyond that, there were plenty of winners on Wall Street: Nike (+4.1%) continued its recovery, and Tesla (+5%), Oracle (+5%), Nvidia (+2.6%), and Apple (+2.2%) all performed strongly. European stocks rose by an average of half a percent. LVMH (+4.2%) continued its climb, and steel and banking shares were in demand, with gains for ArcelorMittal (+5.9%), ThyssenKrupp (+8.9%), UBS (+3.5%), Banco Santander (+2.2%), and BNP Paribas (+1.9%). In Brussels, the Bel20 closed nearly flat (-0.1%). Within the index, Syensqo (+5.5%) and Solvay (+3.2%) stood out positively, while Sofina (-1.9%), Cofinimmo (-2.1%), and Aedifica (-2.2%) saw the biggest losses.

In Tokyo, markets were flat this morning. Nissan (+5.9%) benefited from loosening ties with Renault, and fellow automaker Mazda (+5.1%) also performed well. Like in Europe, Japanese steelmakers rose on expectations of reduced competition from China. Nippon Steel gained 4.2%. In Hong Kong, the index is down 1% this morning, with Xiaomi (-4.4%) and Alibaba (-3.6%) falling further. Later today, U.S. trade balance and employment figures will be released. Wall Street will close at 1:00 p.m. local time for an extended Independence Day weekend. That means Belgian investors can trade on U.S. markets until 7:00 p.m. CET today.

Why are steel stocks rising?

There’s nothing more difficult than pricing. How do you put a price on a product or service? Price too high, and you won’t sell. Too low, and you leave money on the table. In theory, fierce competition can lead to a “race to the bottom,” where prices and profit margins fall so much that only the largest player survives. And once it does, with all competitors bankrupt or acquired, that one survivor can raise prices dramatically. Risky, indeed. The Chinese Communist Party understands this. That’s why it recently called for an end to the destructive price war in the auto industry—and now it’s doing the same for steel producers. China doesn’t want production to increase at any cost. Steelmakers outside of China are thrilled to hear that. In this way, the Communist Party is helping shareholders of European, Japanese, and American steel companies turn a profit. What do we say to that? Merci, Xi Jinping!

VGP joins KBC Securities’ favorites list

At Spaarvarkens, we’ve long warned about the high risks tied to property developers—rightly so, as share prices in the sector have been decimated since interest rates began rising sharply in 2022. But back in November 2022, we made a proverbial exception: we bought VGP at 70 euro. The stock is now trading at 86.4 euro, which we still consider cheap. KBC Securities now adds VGP to its list of favorite stocks. The company specializes in logistics real estate and has strong prospects. Like Montea and WDP, VGP stands to benefit from continued high demand for logistics properties—including data centers. We don’t always agree with KBC’s analysts, but we do this time. After the announcement, VGP’s shares jumped 4.4%, though they gave back those gains by the end of the day. Still, we’re holding on to our VGP shares. Are you?

Did you know…

that VGP’s debt levels are well under control? At the end of 2024, the company’s net debt stood at just 33.6% of total assets. Competitors have struggled with far higher debt levels.

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