Before the bell: investors back in buying mode

Will Elon Musk get the chance to earn a 1 trillion dollar bonus? Toyota stays strong, but the stock is pricey.

European stocks held up remarkably well after Wall Street stumbled the day before. When a correction is widely expected by every man and his dog, it usually fails to follow through. Usually, at least — short term certainty is a luxury nobody really has. In New York, markets briefly bounced before fading again into the close. Final score: Nasdaq +0.7%, S&P 500 +0.4%, Dow Jones +0.5%. With no official US labour data available, investors leaned on upbeat private payroll figures from ADP. Chipmaker AMD gained 2.2% after its quarterly report a day earlier. McDonald’s rose 2.2% thanks to a better-than-expected 3.6% revenue increase, mainly driven by sales outside the US. Melexis (-4.5%) failed to impress at its analyst day, and sister company X-Fab dropped another 2.8%, now trading a quarter below its pre-earnings level. bpost reported a loss and sank 10%. Kinepolis (+4%) continued to benefit from its US acquisition. Tubize fell 4.3% after a 2% stake was placed at a discount of more than 7%. One wonders: was the investment bank arranging the placement paid by the seller… or by the buyers?

This morning, Chinese markets are off to a strong start, with mainland indices up more than 1% and the Hang Seng jumping 1.7%. Tokyo’s Topix adds 1.4%. In Brussels we get results from GBL, Shurgard, Solvay, Syensqo and VGP. Elsewhere in Europe: ArcelorMittal, AstraZeneca, Engie, Euronext, Lanxess and Rheinmetall report. On Wall Street, all eyes are on Tesla’s shareholder meeting, where a vote will be held on Elon Musk’s potential 1 trillion dollar bonus package. Pride comes before the fall.

A strong — but expensive — Japanese carmaker

Toyota has weathered the auto sector crisis remarkably well. The world’s largest automaker reported solid quarterly numbers: vehicle sales rose 5%, revenue climbed 5.8%. But operating profit fell 18.6%, pressured by US import tariffs and a stronger yen. For the full year, profit is still expected to fall nearly 30% — not great, but still better than most rivals. Even so, the stock fell 3.6%. At 11 times last year’s earnings, Toyota trades at a steep valuation for an automaker — especially when profits are heading 30% lower.

Clean results, fewer orders

Jensen, the Belgian-Danish world leader in industrial laundry systems, once again delivered strong quarterly results after the close. Revenue grew 19% over the first nine months, while operating profit jumped 46%. That already translates into 47.4 million euro in profit — or just over 5 euro per share. With the stock closing at 61 euro yesterday, the valuation remains modest, all the more so given Jensen’s long track record of rising revenue and earnings. Order intake in the past three months fell 20% to 95.5 million euro, but the overall order book held up well at 354 million euro, only 2% lower. Jensen also consistently buys back its own shares — and will likely get another opportunity soon, as Quest for Growth prepares to liquidate its listed equity portfolio.

Did you know…

that the compensation of up to 100 million euro for residents affected by the Ventilus high-voltage power line will be paid entirely through a surcharge on Belgian electricity bills?

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