Update Equities: Strong start to US holiday spending
December historically has been a good month for equity markets, but we have to see if this pattern will repeat itself in 2025. For now, December is off to a relatively calm start.
Last week we saw the unofficial start of the US shopping season. Financial markets had relatively cautious expectations, as some macroeconomic indicators pointed to potential weakness for spending budgets. However, during the five-day stretch from Thanksgiving last Thursday through Cyber Monday, the consumer has been holding up well, and spending activity was clearly better than expected.
In-store spending was showing growth compared to last year, but the growth of online spending is still increasing at a faster pace. All in all, it is a solid start to the shopping season, which is a supportive sign for retailers.
Airbus was confronted with several issues over the past week. First of all, they announced a large recall after uncovering the possible corruption of flight controls because of cosmic radiation. This software glitch was fixed relatively quickly but had a disrupting effect. Only shortly after the recall, the company announced a quality issue with so-called fuselage panels. The impact was predominantly seen with planes that are currently in production. As a result, Airbus expects to deliver a slightly smaller number of planes this year compared to earlier targets, while sticking to its financial targets for this year.
The news flow at Boeing was more positive. At a conference, Boeing’s CFO was positive regarding the outlook for next year. The company expects 737 and 787 model deliveries to increase in 2026, improvements in the defence and space unit and a return to positive free-cash-flow generation. These messages were taken well by investors.
In Europe, apparel giant Inditex showed strong financial results this week. Revenue growth accelerated in the third quarter and margins were also healthy.
Cybersecurity company CrowdStrike was able to deliver strong numbers for the third quarter with recurring revenues growing strongly and reporting very healthy margins. However, the next quarter’s outlook wasn’t really able to positively surprise investors.
Marvell Technologies delivered results and near-term guidance that was more in line to slightly better compared to expectations. But the commentary around the data-centre business growth forecast for the next couple of years was a positive surprise. It was the core element of the results that grabbed the attention of investors and drove the share price to higher levels.