Before the bell: the Bel20 can almost smell its 2007 record

Retail sales pushed Wall Street to fresh records. The Bel20 waits for a decisive push from UCB and Argenx. Netflix meets expectations.

The S&P 500 celebrated another closing record with a 0.5% gain, while the Nasdaq rose 0.7%, also hitting a new all-time high. Despite the typically weaker summer months, investor sentiment remains upbeat. A rebound in consumer spending in June—after a dip in May—contributed to the optimism. When you compare year-to-date index gains, Wall Street is nearly catching up with European markets, but in euro terms, European stocks have delivered roughly 10% more than the S&P 500. The weaker dollar is now helping US companies report stronger growth, as shown by PepsiCo’s 7.5% gain yesterday. With a 1.1% rise, the Bel20 was among the stronger performers in Europe. The Brussels index now needs just 5% more to reach its long-standing closing record of 4,756.82 points, set on 23 May 2007. Not an impossible feat. The index has already gained 6.2% this year, and there’s still room to grow. Key drivers include KBC (+1.1% yesterday, +17.7% YTD) and AB InBev (+1.3%, +21%). But the heavyweight Belgian pharma stocks UCB (+2.5%, -9.5%) and Argenx (+1%, -18.2%) have been digesting last year’s strong gains, holding back a full take-off.

Inflation in Japan came in at 3.3%, but the Tokyo market opened flat this morning. Hong Kong started with a 0.7% gain. Friday brings fewer numbers overall, but the earnings season still offers a few notable results. In Brussels, we await Wereldhave Belgium, and in Sweden, Saab. In the United States, 3M and American Express are reporting.

Netflix comfortably meets expectations

Netflix reported results after the bell yesterday, helped by the weaker dollar, which boosted quarterly revenue to 11.08 billion dollar. The 16% growth slightly exceeded expectations. Free cash flow was also strong at 2.27 billion dollar, again just above forecasts. Profit surged thanks to a rise in the operating margin, which climbed from 27.2% to 33.1%. Netflix raised its full-year outlook for both revenue and earnings. Growing advertising income is clearly supporting margins. Despite that, the stock dropped 1% in after-hours trading.

Many Belgian winners this year

While the Bel20’s 6.2% year-to-date gain doesn’t put it in the European lead group, several Belgian stocks have been performing remarkably well—often names that had struggled in prior years. For example, Proximus has surged more than 70% (+1.3% yesterday), and construction group CFE is up over 80% (+7.4%). Tessenderlo rose 42.4%. The better-than-expected results from Barco have now lifted its share price to nearly +40% year-to-date. Ten other Belgian stocks have gained at least 30%. With a 17% return (plus 5.6% dividend), Wereldhave Belgium is one of the top-performing REITs outside the Bel20. This morning, the shopping centre operator reported that earnings per share rose 16.2% in the first half of the year. The full-year earnings forecast of 5.35 to 5.45 euro per share was confirmed.

Did you know…

that the number of registered donations in Belgium rose by 25% in the first half of this year? Donors pay 3% gift tax, but the donation is then exempt from inheritance tax later on.

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