Before the bell: postponement is not cancellation

Wall Street is struggling as Trump confirmed that tariffs on Mexico and Canada will be implemented today. In Belgium, Ekopak announces that its losses doubled in 2024.

March 4 had long been marked in red on our calendar. On this day, Mexico and Canada were set to face 25% tariffs imposed by Trump. Investors had hoped for another postponement after the previous delay, but it never came. The Nasdaq lost 2.6%, while the broader S&P 500 fell 1.8%. Notable decliners included Nvidia (-8.6%), Broadcom (-6.1%), and Amazon (-3.4%). Microsoft also fell by 2.1%. Nvidia received bad news from Singapore, where authorities launched an investigation into illegal chip smugglers allegedly transporting Nvidia chips to China. The chips were reportedly being shipped from Singapore to Malaysia before ultimately ending up in China. This investigation increases the likelihood that the U.S. government will tighten export restrictions on Nvidia.

Asian markets are also in the red this morning, but the losses are limited. In Tokyo, the Topix (-0.9%) gives up half of yesterday’s gains. Meanwhile, the Hang Seng in Hong Kong (-0.1%) remains surprisingly resilient. Automaker BYD (-6.8%) is among the biggest losers. On a different note, Recticel has withdrawn its 2025 forecast, though its revenue grew by 15% in 2024. With a net profit of 0.32 euro per share and a net cash position of 74 million euro, the company is not facing immediate financial concerns despite low visibility for 2025. Later today, Target and Best Buy will report earnings, followed by Crowdstrike after the market closes.

A 100 billion dollar deal

“A major investment deal.” That was how U.S. President Trump described the announcement yesterday when the CEO of Taiwanese chip giant TSMC visited the White House with a plan to invest an additional 100 billion dollar in the U.S. Taiwan Semiconductor Manufacturing, the world’s largest chip producer, plans to build three new chip factories in the U.S., along with a large research center. The deal benefits both parties. The U.S. is aggressively imposing tariffs on foreign goods, and this move allows TSMC to bypass those restrictions. However, TSMC’s stock is down slightly in Asian trading today. Producing chips in the U.S. will be more expensive than in Taiwan, which could impact profit margins. From a global perspective, though, the deal is positive. If China were ever to invade Taiwan, the U.S. would have domestic semiconductor production to rely on, potentially easing future geopolitical tensions.

A cockroach never comes alone

Earlier this year, we raised our eyebrows at water treatment company Ekopak. After four years of service, CFO Els De Keukelaere unexpectedly left the company. Equally surprising for many investors was the sudden halt in the company’s growth trajectory. In December, Ekopak announced that its revenue would not reach the projected range of 70 to 75 million euro, but instead fall between 55 and 57 million euro. The reason? Customers are shifting to the more profitable WaaS (Water-as-a-Service) model, where they lease Ekopak’s solutions over a longer period. However, looking at the mere 3 million euro in revenue generated by WaaS projects in 2024, it’s clear that this model is still in its infancy. Today, the company reported that its losses doubled to 7 million euro, while net debt surged from 30.2 million euro to 67.7 million euro. With the CFO’s departure, the refusal to provide 2025 guidance, and the recent downward revision of revenue expectations, we remain skeptical about Ekopak. Until there is tangible proof that WaaS adoption is gaining traction, we will remain on the sidelines.

Did you know…

that a Citigroup banker accidentally made an 81 trillion dollar error in 2024? The mistake occurred during a manual transaction of just 280 dollar that went wrong. Five years ago, the bank mistakenly wired 900 million dollar to Revlon creditors, of which 500 million dollar could not be recovered.

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