Mixed in Asia ends the week – year-high interest rates in the US on increased inflation concerns – Saab beats the forecast – Cornucopia?

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Stock markets start Friday mixed in the Asian time zones. Interest rates in the US are rising on increased inflation concerns ahead of the reporting of PCE inflation today and are also pulling up the price of gold. The large Swedish defense group Saab beat the analysts’ forecasts and raises the full-year forecast.

The Stockholm Stock Exchange continued to decline and OMXSPI went -1.32% while OMXS30 went -0.70%. The Swedish krona is back at 11:64 SEK for the EUR and is at 10:87 SEK for the USD. The gold price rises to SEK 817 per gram at the time of writing.

In the US, preliminary PCE for the first quarter should have come in higher than expected and definitive figures for core PCE in March will come this afternoon Swedish time before the American stock markets open. There is thus concern that the US inflationary pressure remains and that interest rate cuts will therefore not occur, be delayed or go more slowly than the market expected.

Thus, the US interest rates rose yesterday. The ten-year recorded an annual high of 4.70%, a record that the other long maturities for the 3-, 5-, 7-, 20-, and 30-year-olds also set. The twenty-year interest rate is now 4.93%. The two-year-old reached 4.96%, which, however, is not the annual high of 4.98%. But the longer expectations for interest rates do not directly signal that the low interest period will return.

PCE stands for personal consumption expenditure and includes some other than CPI and refers to consumption purchases.

The American stock markets retreated and the Nasdaq 100 went -0.55% while the S&P-500 went -0.46%.

Among the FAANGSTs, Facebook plunged -10.96%, while Tesla rallied +4.97% and has turned up from its support area, so it will probably continue for a while.

In the Asian time zones, the stock markets are mixed. Faller makes the ASX 200 in Australia and goes -1.32%. The index is mostly driven by Western money, and therefore fairly reflects the general situation in the US and Europe. The Hang Seng surges +2.48%, the KOSPI +1.11% and the Nikkei 225 +0.81%, while the Straits Times is unchanged at -0.07%.

The large Swedish defense group Saab beat analysts’ estimates and raises its forecast for the full year. Turnover landed at SEK 14,185 million against the estimate of SEK 12,707 million and is up from SEK 11,485 million in the first quarter of last year. The profit also beat the estimate of SEK 1,039 million and landed at SEK 1,191 million against SEK 928 million last year.

It upgrades its organic (i.e. without acquisition of other companies) sales forecast to an increase of 15 – 20% compared to previous estimates of 12 – 16%.

At the same time, the share has not directly been on the lazy side since the start of the full-scale Russian invasion, but went from about SEK 250 to SEK 920 and the valuation according to MarketScreener is p/e 29.8x on the 2024 consensus forecast and 19.4x on the year 2026.

So the company has a lot to live up to in order to defend its share price. But for the employees, there should be some job security in the next few years.

Personally, I stay away from individual stocks except in exceptional cases, when I don’t find it worth the time, but I do have Saab via Finserve’s Global Security Fund. Defense is reasonably a long-term macro trend now, as Russia’s war in Ukraine will not be over for a while, and in addition, the West has now woken up and realized that they actually have to seriously arm themselves.

But it is only to congratulate Saab’s shareholders who made almost 4x the money in just over two years. If you didn’t take the profit and sell it on the road. Which is probably easy to happen, as the share seems to move in steps, and thus becomes so-called boring and loses relatively general stock market growth, which means that it becomes easy to sell off and buy something else.

The following is content from the blog’s partner Compricer.