(ABM FN) The stock exchange in Brussels continues to seek higher levels and is targeting 4,000 points on Tuesday, partly thanks to Solvay’s price gain.
The Bel20 index rose by one percent to 3,970 points at the end of the morning on Tuesday.
Frank Vranken of Bank Edmond de Rothschild took stock of the American results season so far on Tuesday. Now that 400 companies from the S&P500 index have already reported, the result is strong. According to Bank of America, 72 percent performed better than expected on revenue, 59 percent on profit, and 50 percent performed better than expected on both revenue and profit.
This is in line with the past quarter, but according to Vranken is still better than expected. This was mainly due to the higher margins, because the large companies in particular do not seem to suffer from the higher interest rates. They have a lot of cash. This is also used to buy back own shares on a large scale.
This is very different for small companies, Vranken warned.
And when Vranken looks at the next quarterly figures, the forecasts that companies have given so far are important. Bloomberg Intelligence noted that so far, only 15 percent of companies reporting have provided guidance that exceeds analyst expectations. Over the past five years, this is on the low side.
Goldman Sachs, on the other hand, increased its forecast for earnings per share growth for European companies in 2024 from 3 to 6 percent. According to KBC, not so much because margins or growth are increasing, but mainly because of a 10 percent annual increase in the oil price and a 10 percent decline in the dollar.
KBC also drew attention to the hope among investors that interest rates will really go down. And we see this clearly in the American futures, because they again take into account two interest rate cuts by the Fed, with a 90 percent chance of a rate cut in September and an 80 percent chance in December.
According to KBC, the chance of an interest rate cut by the ECB in June also increased again, which provided counter pressure on Monday, despite the French services sector.
The euro/dollar fell to 1.0759 on Tuesday.
Risers and fallers
Solvay’s quarterly results were better than expected. This was the conclusion of analysts from ING and Kepler Cheuvreux, among others. And investors also had this opinion, causing the share to trade almost 9 percent higher.
Melexis and Sofina also did well with gains of almost 2 percent. Melexis may benefit from the price gain of Infineon, which this morning lowered its outlook for this financial year. But Citi called that reduction “sensible.”
KBC was the only share in the star index that was in the red, but the loss was modest at 0.2 percent.
Bpost stood out on the broad market with a gain of 1.6 percent. IBA gained 1.5 percent. Orange Belgium and Deceuninck lost one percent.
There were no major outliers among the small caps.
Source: ABM Financial News
ABM Financial News is a supplier of stock market news, video and data, both for real-time trading platforms and dealing rooms and for online and offline media publications. The information in this article is not intended as professional investment advice or as a recommendation to make certain investments.
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