Before the bell: investors blindly follow Trump’s U-turn

Oil prices fall 10%, interest rates also decline and equities recover, but how long will it last?

European markets were down around two percent on Monday morning due to major concerns about the war in the Middle East. Until the US president quickly tossed European investors a lunchbox full of tasty “tacos” around midday. They eagerly devoured them, and stock markets instantly turned green. The indices ended with gains ranging from 0.5% for the Bel20 to 1.4% for the Euro Stoxx 50. The price of a barrel of oil dropped sharply by 10%, and interest rates fell as well. Previously battered stocks such as chemical distributor Azelis (+7.3%) and airline Wizz Air (+4.4%) rebounded after a deep red start. Wall Street also eagerly consumed Trump’s quickly prepared taco. The S&P 500 gained 1.1%, while Nasdaq heavyweights such as Amazon (+2.4%) and Nvidia (+1.6%) recovered. Microsoft (+0.4%) once again lagged behind. Some investors interpret Trump’s shift as a signal of a potential withdrawal from Iran. Others doubt whether the United States can still put the lid back on Pandora’s box. Israel also remains a factor, as it continued its bombardments yesterday.

This morning, the Hang Seng (+2.3%) and the Topix index in Tokyo (+2.1%) are trading higher, but Europe appears hesitant to extend yesterday’s positive momentum. Today, the European PMI will provide insight into purchasing managers’ confidence at European companies. The same index will be published in the United States around 2:45 pm our time, after payroll processor ADP releases figures on the US labour market around midday.

A cup of coffee to recover

Amid the rattling of weapons, political rhetoric and shifting macroeconomic expectations, we gladly make room for corporate results. They come from coffee service group Miko, which issued a press release after the close with its 2025 figures. After about five difficult years during which the share price roughly halved, there is finally some improvement. Earlier than expected, especially since coffee prices continued to rise last year. Yet the company managed to pass on those increases and even reported a 24% rise in profit. The disappointment linked to the heavy write-down on the acquisition of a coffee roaster now appears to have been absorbed. Note: the share is illiquid and should preferably be traded with limit orders.

TotalEnergies swaps wind for oil

TotalEnergies lost 1.2% yesterday, which was relatively limited given the sharp drop in oil prices. The share is still up 35% since the start of the year. The price was supported yesterday by the group accepting a payment of 1 billion dollar from the US government. This effectively represents reimbursement for what the French group paid in 2022 to develop two offshore wind projects off the US coast. TotalEnergies has agreed to reinvest the same amount in fossil oil projects in the United States. In doing so, it joins many companies adapting to Trump II. According to sector specialists, this is not necessarily negative, as there has been a long period of underinvestment in the oil and gas industry. That also applies to offshore wind, however, and those projects may well be revived quickly once Trump is no longer in power.

Did you know…

that Tehran has introduced a new 10 million rial banknote, worth about 7 American dollar? It is the highest denomination ever issued, reflecting runaway inflation in Iran.

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