Before the bell: record number 44 of 2024

Advice from a bond specialist: “buy more bonds!” One of India’s greatest entrepreneurs has passed away.

While the Chinese stock markets continue to fluctuate wildly, the S&P 500 index reached its 44th record high of 2024. With a 0.7% increase, it happened without much fanfare, but as vacuum cleaner salesman Theofiel from the Suske & Wiske comics used to say, “With small percentages, you can go far.” Bill Gross has noticed this too. Gross is the founder of the asset management firm PIMCO (sold to Allianz), which specializes in bond investments. He is still frequently quoted in financial media, often warning of potential risks. He observes that U.S. stocks have nearly doubled in value over the past five years, but the strength of this bull market is starting to weaken. While he still believes stocks will continue to offer positive returns, he advises making portfolios a bit more defensive—such as by adding some bonds. Today, around 2:30 p.m. our time, the U.S. CPI figure will be released: the inflation rate for consumer prices. A modest increase of just 0.1% is expected. If the number is favorable, bond prices will likely rise, but the opposite could cause bond prices to fall. Fortunately, Gross doesn’t live in Belgium, where, according to a report in De Tijd, a Belgian bank was ordered to pay damages for advising a client to sell Netflix stock. After years of gains, that position had grown to account for a quarter of the portfolio. The bank is appealing the decision.

This morning, Fagron announced strong results. Meanwhile, the stock markets in China and Hong Kong are climbing again, posting gains of nearly 4%.

Search engine under pressure

The U.S. Department of Justice is reportedly considering forcing Alphabet (Google) to break up the search engine giant. Google controls 90% of the market and, according to prosecutors, behaves like a monopolist. There is still a long way to go before any action is taken, but big tech companies are facing increasing pressure from governments, individuals, and businesses accusing Alphabet of abusing its dominant position. Tim Sweeney, CEO of Epic Games, the company behind the video game Fortnite, is also a thorn in the side of tech giants. He won a court ruling requiring Google to allow competition in its Play Store app marketplace. Google is also facing increasing pressure in Europe. While there’s no panic about Alphabet’s stock yet (-1.5%), if this continues, it could eventually weigh on profits.

RIP Ratan Tata

Indian industrialist Ratan Tata has passed away. For decades, he was one of India’s most well-known business figures. He took over leadership of the Tata companies, which had been founded by his grandfather long before. He modernized the companies, giving them a flatter organizational structure. As India itself modernized, the Tata group entered a period of strong growth. Ratan Tata turned Tata Consultancy Services into the group’s cash cow, and today it remains the company with the largest market capitalization. No fewer than 16 Tata companies are publicly listed in India. Tata Motors is also well known; it acquired Jaguar and Land Rover from Ford. Tata Motors has risen by 670% over the past five years, yet it trades at just eight times earnings. In India, automakers don’t receive high valuations, but IT companies do. Tata Consultancy is valued at 33 times earnings.

Did you know…

that X (formerly Twitter) is allowed to operate in Brazil again? Apparently, Elon Musk complied with all the demands of the Brazilian Supreme Court and paid the fines.

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