Before the bell: waiting for the Magnificent 7

Markets in the United States are taking a breather as no fewer than five of the seven Magnificent 7 stocks report earnings this week. On the French market, there was negative news about a champagne house with Belgian roots.

US markets struggled to find direction on Tuesday. The Nasdaq Composite (+0.2%) and the Dow Jones (-0.1%) closed roughly unchanged from the previous day. Investors appear to be waiting for results from five of the seven Magnificent 7 stocks reporting this week, which will likely determine the market’s direction. Meanwhile, last year’s investment themes remain intact. Micron Technology (+5.7%) and SanDisk (+8.1%) were among the strongest gainers as memory chip prices continue to rise. In the fast-food segment, the decline of Domino’s Pizza (-8.9%) stood out. The company’s growth appears to be stalling as consumers pull back and competition intensifies.

In Asia, markets are moving higher again this morning. Japan’s Topix gains 0.9%, as does South Korea’s Kospi. Chinese battery manufacturer Contemporary Amperex Technology (CATL) is planning an IPO in Hong Kong but may need to price it at the lower end of the valuation range due to limited demand. Today we will also see quarterly results from The Coca-Cola Company, UPS, Spotify, broker Robinhood, Visa and Mondelez International.

Always look at the balance sheet

A common mistake investors make? Not looking at a company’s debt before investing. One such example is Maison Pommery & Associés, whose origins date back to 1976 when Belgian entrepreneur Paul-François Vranken launched his own champagne brand. Fifty years later, the group is not performing well. On paper, it appears wealthy, with hundreds of millions of euro worth of champagne inventory in its cellars. But that is only on paper. In reality, it carries a net debt burden of 750 million euro, against an operating profit of just 20 million euro in 2025. A press release on Monday evening revealed that the group is unable to secure financing from its banks to repay a 50 million euro loan due shortly. This places the company in a difficult financial position. Shareholders may need to consider exchanging their shares for bottles of champagne. The likelihood is real that, in the coming years, a bottle from the company will provide more enjoyment than its stock.

Rock-solid figures

Returns can improve significantly when investing in cyclical companies at the right point in the cycle. Take steelmakers ArcelorMittal and Nucor. For years, steel companies were capital destroyers due to overcapacity in the sector, but in recent years the industry has regained health thanks to consolidation and a stronger focus on margins. Governments are also no longer allowing China to flood global markets with cheap steel, while European and US tariffs protect domestic industries. A more protectionist world is therefore positive for steel companies. The results are visible at Nucor, which saw its earnings per share surge from 0.67 dollar to 3.23 dollar last quarter. The stock has gained 84% over the past year, driven by Trump-era trade tariffs, which are unlikely to disappear anytime soon. We expect a positive market reaction following the latest results.

Did you know…

that global economic growth forecasts for 2026 are now higher than a year ago? In April 2025, the International Monetary Fund expected global GDP growth of 3% for 2026. This month, it revised that forecast upward to 3.1%, despite the crisis in Hormuz.

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