Before the bell: U.S. kicks off relief rally

The U.S. inflation report sparked a strong rally in the American and European stock markets, while early results from the banking sector were encouraging.

Yesterday was a celebratory day for the U.S. stock markets. Following the release of the U.S. inflation figure at 2.9%, as expected, investors regained hope that the Federal Reserve might pull off a rate cut this year. U.S. interest rates began to fall sharply after the announcement, sending the tech-heavy Nasdaq up by 2.5%. Stocks like Tesla (+8%), Micron Technology (+6%), Nvidia (+3.4%), and Meta (+3.9%) led the charge. The banking sector also delivered strong results, with Goldman Sachs (+6%) reporting its highest quarterly profit in three years. Meanwhile, JP Morgan (+2%) posted a significant profit increase, and BlackRock (+3.3%) set a new record for assets under management.

Corporate news is relatively quiet this morning. At the J.P. Morgan Healthcare Conference last night, UCB reaffirmed its guidance, targeting an annual revenue of nearly 6 billion euro in 2024. In November, the company had already raised its forecast to between 5.5 billion and 5.7 billion euro. Fastned has lowered its growth expectations for 2025, planning to build 400 to 425 new charging stations this year, down from the previously announced 420 to 450. Revenue per charging station is also expected to be 325,000 euro, below the earlier projection of 400,000 euro per station. In Belgium, falling interest rates boosted real estate stocks like Cofinimmo (+3.1%), Aedifica (+3.2%), and WDP (+2.9%). Today, the earnings season continues with reports from UnitedHealth Group, Bank of America, and Morgan Stanley. Additionally, U.S. retail sales figures and unemployment claims data will be released.

AI hype is far from over

Curious about the economy and demand for AI products? This morning’s earnings from TSMC, or Taiwan Semiconductor Manufacturing, provide some clues. As the main chip supplier for Apple and Nvidia, TSMC offers insight into whether the recent AI boom is nearing its end. For now, investors needn’t worry. The company projects quarterly revenue of 25 to 25.8 billion dollars, exceeding analyst expectations of 24.4 billion dollars. Capital expenditures for this fiscal year will also be significantly higher, at 38 to 42 billion dollars compared to the anticipated 35.2 billion dollars. This increase is partly driven by U.S. trade restrictions, prompting TSMC to plan new factories in Europe to sidestep Western sanctions. The stock gained 3.8% in Asian trading this morning.

The watch isn’t out of time yet

Do you still wear a watch? For younger generations accustomed to checking the time on their smartphones, using a traditional timepiece might seem antiquated. However, watches remain stylish, and the numbers suggest there’s still demand for luxury watches. Swiss company Richemont, owner of Cartier, reported fourth-quarter revenue of 6.2 billion euro, surpassing expectations. The group also owns other watch brands like Piaget, Jaeger-LeCoultre, and IWC. A 10% revenue increase outpaced the stable sales analysts had anticipated. The time for watches isn’t over yet.

Did you know…

a euro is currently worth almost as much as a U.S. dollar? Today, one euro equals 1.028 dollars on the currency market. Some analysts predict we are moving toward euro-dollar parity, where one euro will equal one dollar.

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