Before the bell: US government buys shares

Hong Kong surges this morning. Is a multi-billion dollar deal brewing in the coffee sector?

Last week, the Brussels Bel20 led the pack. The index rose 1.6% while the average European stock, measured by the Euro Stoxx 50, gained only 0.7% on a weekly basis. In the run-up to Fed Chair Jerome Powell’s speech on Friday, US indices lost ground for most of the week. But on Friday the S&P 500 (+1.5%) and tech exchange Nasdaq (+0.8%) staged a rebound after Powell convinced investors that a September rate cut is highly likely. Companies exposed to renewable energy had an outstanding week after it became clear that Donald Trump’s subsidy cuts were less severe than feared. Danish wind specialist Vestas climbed 9.6%, while solar inverter makers SolarEdge (+10.1%) and Enphase Energy (+5.5%) also booked strong weekly gains.

This morning, Hong Kong’s Hang Seng Index jumped 1.8%, led by big names such as Baidu (+5.9%), Alibaba (+5.25%) and JD.com (+3.9%). (See the latest Spamalot, where Jan and Pascal already discussed Chinese player Baidu.) In Japan, the Topix was unchanged. Later this week, all eyes will be on Nvidia’s results on Wednesday night. On Friday, the US inflation report is due. Economists and Fed officials expect inflation to rise due to tariffs.

Government support for Intel

At the start of the weekend, the US government announced it would take a 10% stake — worth 8.9 billion dollar — in chipmaker Intel. Once the undisputed leader in central processors for computers and laptops, Intel completely missed the boom in data centers and artificial intelligence. President Donald Trump now wants to ensure the company gets a seat on the runaway AI train. Some observers claim Trump has just laid the foundation for a US sovereign wealth fund, similar to those in Singapore or Norway. Belgium also owns shareholdings: semi-state firms Proximus and bpost, state bank Belfius, and the National Bank. The federal government has also taken stakes in Euroclear, BNP Paribas and Umicore, while Flanders bought into Brussels Airport. But not all government investments turn out successfully.

Smells like Douwe Egberts

That must have been the thought of employees at US drinks specialist Keurig Dr Pepper when walking through the corridors of their company. Rumors suggest the firm is about to bid 18 billion dollar for Dutch coffee group JDE Peet’s. If the takeover goes through, the coffee activities would likely be spun off from the (soft)drinks division. For JDE Peet’s, it has been a short stint on the Amsterdam stock exchange. Its oldest part, Douwe Egberts, was founded in 1753. The group went public in Amsterdam in 2020 at 31.50 euro per share. If the deal materializes, it would exit the exchange again at that same price, nearly 20% above Friday’s closing price. Between 2012 and 2013, the coffee roaster was already listed in Amsterdam before being taken private by German investment group JAB Holdings.

Did you know…

Coca-Cola is also in the coffee business? It owns Costa Coffee, a Starbucks rival with 4,000 outlets in 50 countries, mainly in the UK and Ireland. But Coca-Cola is reportedly considering a sale as the chain underperforms. A sale could fetch up to 2 billion British pounds. Back in 2019, Coca-Cola paid 3.9 billion pounds to acquire Costa.

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