Before the bell: Jerome Powell is in the game, too

Investors don’t believe Trump will upend the economic order, even outside the U.S. European markets and the euro recover, and long-term interest rates fall.

Will Donald Trump isolate the U.S. from the rest of the world, raise high tariffs, and massively deport immigrants? Yesterday, stock markets in Europe, Latin America, and Asia showed little evidence of those expectations. On the contrary, markets rose nearly everywhere. Europe rebounded from the initial “Trump shock,” with gains ranging from about half a percent to a full percent. The Bel20 added three-quarters of a percent. GBL gained 2% after the CEO discussed how the holding company could address its high discount. Umicore climbed 3.9% after pausing operations at its Canadian plant and announcing a small round of layoffs; the stock has been bottoming out for months. In the U.S., as expected, the Fed cut interest rates by 25 basis points. Jerome Powell, however, did not hint at another cut in December. The dollar lost half of Wednesday’s gains. Powell was, of course, asked about the impact of Trump’s election—and whether the new president could fire him. “No,” replied Powell curtly. He added, “The Fed doesn’t speculate on the new president’s plans. In the short term, there’s no impact on monetary policy.” After Wednesday’s sharp rise in long-term rates, the ten-year yield reversed yesterday, dropping by a hefty 11 basis points, meaning Trump’s effect on this rate is only five basis points higher in total. This allowed Wall Street to keep the party going, albeit at a quieter pace. The S&P 500 rose by 0.75%, and the growth index gained 1.5%, largely driven by stocks like Tesla (2.9%), Nvidia (2.2%), and Meta Platforms (3.4%), likely because investors assume Trump isn’t keen on regulation.

In Asia, Japan posted a small gain, while Chinese markets saw a slight decline, as investors anticipate an announcement of government support. Markets are awaiting new stimulus measures. This morning, earnings reports are expected from bpost, VGP, and Aperam, with Exmar reporting after the close. In Amsterdam, Azelis competitor IMCD and Eurocommercial Properties are also reporting. Friday will be a quieter day, with no major companies releasing earnings.

Arm wants more

Arm, the British chip designer primarily for mobile devices and listed on Nasdaq, met expectations. In the third quarter, royalty revenues increased by 23%. For the next quarter, Arm expects revenue between 920 million and 970 million dollar. The company is in a dispute with Qualcomm, one of its biggest clients. Qualcomm wants to pay lower fixed fees, while Arm is demanding an additional $500 million from the client. Investors appear to believe Arm will prevail, as the stock rose by more than 4%. Nvidia, which was denied permission by competition authorities to acquire Arm a few years ago, remains an important client.

Sunshine for logistics real estate

Real estate developer VGP, which holds a significant portion of its buildings through five large joint ventures with financial partners, released figures for the first 10 months of 2024. Business is strong: during the reporting period, VGP signed 64.9 million euro in new and renewed leases, bringing annual rental income to 394.3 million euro – a 12.4% increase since the beginning of the year. This pace is expected to accelerate in the last quarter. Occupancy is at 99%. VGP is also exploring the possibility of developing data centers in the future. The logistics real estate developer is rapidly installing solar panels: capacity has increased by 48% since the start of the year, and by the end of the year, VGP aims to reach a capacity of 318 megawatts. VGP expects to pay a dividend of 80 million euro, or around 2.9 euro per share.

Did you know…

that ThyssenKrupp, Germany’s largest steel group, is implementing cost-cutting measures that require employees to pay for their own coffee, milk, and cookies? The company has also canceled Christmas parties.

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