Before the Bell: KBC Reports €1 Billion Profit in One Quarter

Belgian bank KBC delivered a remarkably strong quarterly result. In the United States, the government shutdown has finally come to an end.

Trump signed a bill late Wednesday night, officially ending the 43-day government shutdown. Just last month, the Congressional Budget Office calculated that a six-week shutdown would shave 1.5% off U.S. GDP. With the government reopening, we will once again receive a stream of macroeconomic data in the coming weeks. Investors expect those figures to be weak, increasing the likelihood of U.S. interest rate cuts. Gold responded by surging above 4,200 dollar per ounce. AMD jumped more than 9% thanks to upbeat AI expectations and strong chip sales tied to OpenAI and Microsoft. CM.com plunged over 6% in the final minutes of trading, making it one of the day’s biggest losers.

In Asia, all eyes are on the continued weakening of the Japanese yen. The currency is sliding back toward levels that forced the Bank of Japan to intervene last year. The Topix rose 0,7% this morning in Tokyo, reaching a new record. In Belgium, the flow of corporate news was substantial: KBC raised its full-year guidance and reported a net profit of 1 billion euro last quarter, exceeding analyst expectations. Dredging group DEME announced that 2025 will be a record year, with EBITDA set to surpass last year’s level. Solvay signed a series of contracts to supply rare earth materials to customers in the United States and the United Kingdom. The materials will be used to produce magnets. Later today, Disney, JD.com, Applied Materials and The Metals Company will report earnings.

Is Siemens Preparing to Invest Billions in AI?

Today, the main focus will not be Siemens’ quarterly earnings but rather its investor day, where management will outline its plans for its stake in Siemens Healthineers. Siemens has long held a 71% interest in the healthcare group, worth roughly 36 billion euro. The valuation is easy to track: Siemens Healthineers has been publicly listed since 2018. Since then, management has faced increasing pressure to unlock the value of that stake. While Siemens’ own share price has risen 146% since 2018, Siemens Healthineers has gained only 48%. After seven years, investors have lost patience — and management now agrees. The plan is to sell a 30% stake, worth about 15 billion euro, and redirect that capital toward faster-growing areas such as software and AI. From a shareholder-value perspective, reallocating capital toward higher-growth sectors makes sense. However, reinvestment risk comes with the territory. Seven years ago, healthcare was expected to boost Siemens’ growth — it didn’t. Will AI be different? Let’s discuss again in seven years.

Not Every Investment Is Worth Making

It feels like watching a documentary. On the YouTube channel Spartan, I’ve followed the videos covering the war in Ukraine. In the 21st century, Ukrainian soldiers move around with bodycams, allowing you to witness firefights almost as if you were there yourself. One of the horrors of modern warfare? The flying drones targeting soldiers who would rather be anywhere else. These airborne weapons can pierce even the toughest tanks. I was reminded of this as drone manufacturer Red Cat Holdings releases its quarterly results today. The company is listed on the Nasdaq and its share price has soared 900% since early 2024. Financially, Red Cat still struggles with profitability and has reported losses for several years, but military demand is driving enormous revenue growth. Its partnership with Palantir is also catching investors’ attention. Yet I would rather not see these shares rise. A booming order book for companies producing combat drones rarely signals anything good for the world. There is more to life than money — something the Spartan videos made painfully clear again this week.

Did You Know…

that in the summer of 2024, the Japanese stock market plunged suddenly due to a sharp surge in the yen? Investors who had borrowed heavily in yen to invest were forced to liquidate positions to cover skyrocketing currency-hedging costs, triggering a domino effect that sent Japanese stocks down more than 12% in a single day.

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