Before the Bell: U.S. Tech Stocks Tumble

U.S. equity markets came under pressure as major tech names were sold off sharply. In Europe, today marks the final trading day for Just Eat Takeaway.

Investors holding the most popular technology stocks on Wall Street took heavy hits on Thursday. Federal Reserve governor Neel Kashkari remarked that he did not support the most recent rate cut. In recent days, several other Fed officials have made statements aimed at tempering expectations for further rate reductions. The damage was especially severe in AI-related tech stocks such as Nvidia (-3.6%) and Palantir (-6.5%). Electric-vehicle makers also suffered, with Tesla sliding 6.6% and Lucid Group dropping 8.6%. Cisco, meanwhile, rose 4.6% after raising its profit outlook, making it one of the few bright spots on Thursday.

In Asia, the tech-selloff continued this morning, with losses for Alibaba (-3.8%) and Baidu (-6.6%). In Europe the corporate agenda is relatively light, with few earnings releases expected. Medtech firm Nyxoah will complete a 66 million euro capital increase. Hyloris reported positive study results for its IV aspirin treatment. Today is also the final trading day for Just Eat Takeaway shares: the Prosus acquisition has been finalized, bringing an end to the Dutch food-delivery company’s stock-market listing.

Investing in Boring Things

When I studied finance and insurance, one of my best subjects was—ironically—insurance. I excelled at dissecting policy details, understanding the underlying legislation, and applying the rules. The only problem? Digging through insurance documents is painfully dull compared to the stock market. But why become an insurance broker if you can simply buy shares in those companies? German insurer Allianz released mouthwatering results this morning. Net profit rose 15%, and the giant raised its earnings guidance. It now expects operational profit of 17 to 17.5 billion euro per year. Anyone holding Allianz shares has seen them rise about 90% over the past five years, excluding dividends.

Chinese Investors Return to the Stock Market

At Spaarvarkens, we still believe in the Chinese stock market. Not only is Asia heavily investing in the future of AI, but after years of neglect, valuations are now far lower than in the rest of the world. A few years ago, you could argue that Chinese stocks deserved a discount because of government interference. Today, ironically, you could make a similar case for the United States. We closely monitor several macro-indicators, including how much money Chinese households deposit into their brokerage accounts. According to data from the People’s Bank of China released today, these deposits rose by the equivalent of 253 billion dollar last month—a sign that Chinese investors are returning to their domestic equity market. It is already the fourth consecutive month in which households have parked more money into brokerage accounts than the ten-year average. This could ultimately help push up share prices of companies such as Baidu, Alibaba and BYD.

Did You Know…

that Allianz has paid an uninterrupted dividend throughout Europe’s post-war history? The insurer has increased or maintained its dividend for nearly a century—an extremely rare achievement in Europe.

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