Before the Bell: Will Europe Raise Rates?

European bond yields are climbing toward their highest level of the year, as some ECB officials signal they would support an interest-rate hike. ThyssenKrupp, meanwhile, expects to book a massive loss next year.

Belgium’s 10-year bond yield rose this morning to 3.38% after the ECB sent increasingly clear signals that a rate hike is a real possibility. In an interview, German ECB board member Isabel Schnabel noted that markets now assume the next policy move is more likely to be a hike than a cut — and that she feels “comfortable” with that view. The Euro Stoxx 50 finished Monday flat, with real estate names such as Vonovia (-3.8%) and Deutsche Wohnen (-2.6%) under pressure. In Amsterdam, Unilever was the biggest loser (-6.7%), although that decline was offset for shareholders by the spin-off of The Magnum Ice Cream Company (+1.3%). Bayer (+4.8%) was among Europe’s strongest performers, supported by a wave of analyst price-target increases after the Trump administration’s backing in a glyphosate lawsuit sharply reduced the company’s legal risk. In the U.S., AI chipmaker Marvell Technology (-7%) fell after it was passed over for inclusion in the S&P 500.

Corporate news is relatively limited this Tuesday. Asian markets show little movement. In Europe, German industrial group ThyssenKrupp warned this morning that it expects to incur a steep loss in 2026 and burn hundreds of millions of euro in cash. In the U.S., GameStop and Campbell’s will report earnings later today.

Is the Door Still Open for the West in China?

Good news, at first glance, for Nvidia investors: on Monday, the U.S. government announced a loosening of chip-export restrictions to China. The adjustment focuses on H200 chips, potentially allowing Nvidia to benefit from Chinese demand for computing power to support the AI boom. What stood out most, however, was the modest reaction in the share price — a rise of just 1.7%. Beijing continues to push domestic companies toward local alternatives and has already blocked imports of several lower-end Nvidia chips. In practice, China has been steadily closing the door on U.S. hardware. The key question is whether the H200 is advanced enough to persuade Chinese authorities to allow its import. Nvidia’s most powerful Blackwell and Rubin chips are not part of the deal. At Spaarvarkens, we no longer treat a return to the Chinese market as an assumption, but rather as a potential bonus for the stock. With governments worldwide accelerating efforts to build domestic technology ecosystems, there is a real risk that Nvidia has permanently lost its leadership position in China.

How to Invest in the Second-Hand Car Market?

How much is a Bel20 listing worth these days? Aside from prestige — not much. Funds barely invest in the Bel20 anymore, and the lack of interest in the Brussels market reflects that. The S&P 500, by contrast, offers immense value: a “ticket” into the index can be worth billions. On Monday, shares of used-car platform Carvana jumped 12% after news that the company will enter the S&P 500 at the end of December. Its market capitalisation surged by 10 billion dollar as a result. Personally, I am no fan of Carvana. I have followed the stock ever since short-seller Hindenburg targeted it. The company carries a massive debt load — more than six times EBITDA — making it vulnerable in a downturn. Critics note that Carvana approves 99% of loan applications, often to subprime borrowers below the poverty line, with interest rates up to 27.99%. That all but guarantees high default rates. If used-car prices fall and Carvana’s collateral weakens, the company becomes exposed — another reason I avoid it entirely. An S&P 500 listing is no guarantee of quality. If you watched Spamalot 172, you’ll know Pascal Paepen is a fan of competitor AUTO1 Group, listed in Germany. If you want to invest in the sector, I strongly advise against Carvana and strongly recommend Pascal’s analysis of AUTO1 Group in Spamalot 172. Yesterday, Jefferies initiated coverage of AUTO1 with a “Buy” rating and a 34-euro price target, implying 40% upside from current levels.

Did you know…

ThyssenKrupp had a strong 2025 thanks to the sale of its defence division? The unit was spun off and brought billions of euro into the group. With that tailwind gone, the spotlight returns to its steel and automotive divisions, which are struggling with geopolitical headwinds.

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