Before the bell: Trade War Weighs on Markets

Tech giants tumble as Umicore presents its new strategy in London.

Investors on Wall Street hit the sell button again yesterday. Both the S&P 500 (-1.1%) and the Nasdaq (-2%) ended the day lower. Nvidia (-5.7%) and Tesla (-5.6%) were hit hard. The announcement by the U.S. president of a 25% import tax on cars and car parts certainly didn’t help improve market sentiment. European indices also fell by around 1% on average. The London Stock Exchange (+0.3%) outperformed the rest. Shell (+2.4%) was a notable gainer. In Brussels, Elia (+2.4%) and Sofina (+2.4%) topped the Bel20 index. The grid operator is allowing shareholders to participate in a capital increase at a discount, and the Boël family holding company announced its final results after market close yesterday. The net asset value of a Sofina share was 311.8 euro as of 31 December. With the share closing at 247.6 euro, the holding discount still stands at 20.6%. Tessenderlo (+7.9%) managed to rise despite a drop in profits.

In Japan, the Topix index is down 0.5% this morning. Tech holding SoftBank (-3.8%) and Mitsubishi Motors (-3.9%) saw even steeper losses. In contrast, Hong Kong’s market rose 1.1%. Chinese search engine Baidu (+3.1%) outperformed the broader index. Later today, after market close, Belgian soil research specialist ABO-Group Environment will report its results. Exmar, Exor, Sligro, and Titan Cement are also publishing earnings today. Wall Street will welcome a new company to the exchange: CoreWeave, an artificial intelligence specialist, is aiming to cash in on the sector’s hype, though many analysts are questioning its lofty valuation.

Much Higher Valuation for OpenAI

In the same sector, OpenAI is reportedly close to finalizing a new funding round. This would bring the San Francisco-based company an additional 40 billion dollar in capital, with Japan’s SoftBank contributing the largest share. OpenAI would be valued at 300 billion dollar, including the new funding. Back in October, during its previous round, the company was valued at 157 billion dollar. Not bad for a business that posted 3.7 billion dollar in revenue last year. This year, OpenAI expects sales to hit 12.7 billion dollar, and by 2026, revenue could reach 29.4 billion dollar. Expectations for OpenAI are sky-high—just like its valuation.

Boël vs. Agnelli: 1–0

Investing isn’t a competition—but if it were, the Belgian billionaire Boël family would have beaten Italy’s Agnelli dynasty last year. The net asset value of Sofina rose by 13.9% in 2023. The Agnellis had to settle for a +9.0% gain with Exor. Not bad, but clearly underperforming the +24.8% return of the MSCI World in euro, which the Italians use as their benchmark. Will the Agnellis’ holding company outperform in 2024? They’re certainly trying. At the end of last month, Exor announced the sale of a 4% stake in Ferrari, reducing its ownership to 20%. The deal brought in 3 billion euro, with 1 billion earmarked for a share buyback. Exor also invested 223 million euro in Philips. A year and a half ago, the Italians surprised investors by acquiring a 15% stake in the Dutch company. That stake has now grown to 18.7%, making Exor Philips’ largest shareholder.

Did you know…

that Umicore’s management is in London’s City today to convince large institutional investors of the company’s new strategic direction? The investor day is expected to provide more clarity on plans for the battery materials division.

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