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U.S. stocks are seen opening higher Friday, boosted by strength in the tech sector after positive earnings from social m...
23/07/2021

U.S. stocks are seen opening higher Friday, boosted by strength in the tech sector after positive earnings from social media giants Twitter (NYSE:TWTR) and Snap (NYSE:SNAP).

At 7:05 AM ET (1105 GMT), the Dow Futures contract was up 160 points, or 0.5%, S&P 500 Futures traded 20 points, or 0.5%, higher and Nasdaq 100 Futures gained 70 points, or 0.5%.

The major equity indices closed higher Thursday and are now on course to close the week higher, the fourth positive week in five, even given Monday’s sharp sell-off. The tech-heavy Nasdaq Composite led the way Thursday, and is likely to dominate again Friday.

Twitter stock soared over 5% premarket after the social media platform reported higher than expected revenue growth in the second quarter, helped by ad targeting improvements to help brands reach potential customers.

Snap stock posted even greater gains after the owner of the messaging app Snapchat beat estimates for users and revenue in the second quarter, notching the highest growth rates since late 2017.

Intel (NASDAQ:INTC) could prove the exception, with the chipmaker’s stock seen lower premarket after it offered up a disappointing forecast for the ongoing financial year that hinted at ongoing loss of market share in its key data center business.

Major technology companies including Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL), Apple (NASDAQ:AAPL), Facebook (NASDAQ:FB) and Amazon (NASDAQ:AMZN) are set to report second-quarter earnings next week. Ahead of this, reports from the likes of American Express (NYSE:AXP), Honeywell (NASDAQ:HON) and Kimberly Clark (NYSE:KMB) will be in the spotlight Friday.

In economic news, U.S. manufacturing and services PMI survey data for July are expected to show a continued recovery. The equivalent data showed Eurozone business activity expanded at its fastest monthly pace in over two decades in July.

Elsewhere, oil prices edged lower Friday, stabilizing after a volatile trading week. The crude market has posted gains of around 8% over the last three days, largely recouping Monday’s slump, when sentiment was hit by worries over rising Covid cases and an agreement between top producers to add supply.

At 7:05 AM ET, U.S. crude futures traded 0.3% lower at $71.72 a barrel, while the Brent contract fell 0.3% to $73.53.

Baker Hughes’ weekly rig count will attract attention later Friday, as will the commitment of traders reports from the Commodity Futures Trading Commission.

Additionally, gold futures fell 0.5% to $1,796.75/oz, while EUR/USD traded largely flat at 1.1766.

Strong reports from social media companies Snap (NYSE:SNAP) and Twitter provide a strong warmup act for Facebook (NASDAQ...
23/07/2021

Strong reports from social media companies Snap (NYSE:SNAP) and Twitter provide a strong warmup act for Facebook (NASDAQ:FB) and Alphabet (NASDAQ:GOOGL) next week. Coffee futures surge to a seven-year high on frost in Brazil. Stocks are set to open higher amid updates from American Express (NYSE:AXP), Honeywell (NASDAQ:HON) and NextEra Energy (NYSE:NEE). India's IPO market is taking off, and oil is steady at the end of a roller-coaster week. Here's what you need to know in financial markets on Friday, 23rd July.

1. Reopening boosts Snap and Twitter

The return to something nearer normal life in the second quarter propelled revenue growth at social media companies Snap and Twitter, pushing the stocks of both companies higher in after-hours trading on Thursday. The reports set an upbeat tone for media companies ahead of reports from Alphabet and Facebook next week.

Snap reported subscriber and revenue growth well ahead of expectations, with revenue doubling and cutting the company’s net loss by half to just over $150 million. CEO Evan Spiegel said that uploads to its TikTok rival service Spotlight had tripled, while daily average users of that service rose 49%.

Twitter, meanwhile, said revenue grew 74% on the year and swung back to profit in the second quarter, but warned that operating costs would rise more quickly over the second half than it had expected.

2. Caffeine rush

There’s a fresh twist in the ongoing debate over commodity price inflation. Coffee Futures had their biggest daily gain in six years and closed at their highest since 2014 after reports of frost damage to this year’s crop in Brazil.

Brazil is still by far the world’s largest source of coffee, producing more than the next two biggest producers (Vietnam and Colombia) combined.

The frost has exacerbated an already-existing shortage caused by drought and a lack of containers for transport. In the past, supply problems in Brazil have typically generated extreme but short-lived spikes in prices. At over $204, benchmark coffee futures have now risen some 59% this year, but they remain well below their highs in past spikes.

Elsewhere in the commodities markets, Tin Futures hit another record high in London.

3. Stocks set to open higher; GOP u-turn calms Covid-19 fears

U.S. stocks are set to end the week back at or near record highs, as futures extend their premarket gains on the back of Thursday’s after-hours earnings.

By 6:20 AM ET (1020 GMT), Dow Jones futures were up 151 points, or 0.4%, while S&P 500 futures were up in line and Nasdaq 100 futures were up a touch more, by 0.5%.

Fears about the spread of Covid-19 across the U.S. have lessened this week, after senior Republican politicians and some Fox News anchors have moderated their criticism of the country’s vaccination program - although it isn’t clear whether their change of heart has been wholly taken on board by supporters yet.

Honeywell, American Express and NextEra Energy lead the roster of early earnings updates, along with Kimberly-Clark (NYSE:KMB) and Schlumberger (NYSE:SLB). Elsewhere, Intel (NASDAQ:INTC) is likely to be in focus after a mixed update in which the high-margin data center business spoiled an otherwise strong report.

4. Zomato kicks off Indian IPO boom

India saw its first-ever blockbuster IPO of a fast-growing, loss-making startup.

Shares in food delivery group Zomato (BO:ZOMT) soared as much as 80% in Mumbai on their debut, giving it a valuation of $12 billion. Indian regulation has only recently changed to allow loss-making companies to go public, and local investors appeared more than ready to fund those losses in the near term.

The IPO was the largest in India this year, and is set to be followed by PayTM, backed by – among others – Jack Ma. PayTM’s deal may yet come to symbolize a shift in regional gravity for tech listings - away from Ma’s homeland of China, which thwarted his plans to take Ant Group public earlier this year.

5. Oil steady; rig data, CFTC numbers due

Crude oil prices are set to end a roller-coaster week roughly where they started it – above the key optical level of $70 a barrel – after riding out scares over both demand and the release of crude from China’s strategic reserve.

By 6:30 AM ET, U.S. crude futures were down 0.1% at $71.86 a barrel, while Brent crude futrues were down 0.1% at $73.72.

Schlumberger’s guidance later will provide an insight into whether the rally in prices over the last six months will translate into greater drilling activity in the U.S. Baker Hughes’ weekly rig count is also due later, as are the commitment of traders reports from the Commodity Futures Trading Commission.

Volvo Cars reported a return to profit in the first half as demand for electric cars pushed earnings above pre-pandemic ...
23/07/2021

Volvo Cars reported a return to profit in the first half as demand for electric cars pushed earnings above pre-pandemic levels, putting the carmaker on a firmer footing as it considers a possible IPO this year.

Sweden-based Volvo, owned by China's Geely Holding, said on Friday it made a first-half profit of 13.24 billion Swedish crowns ($1.52 billion), more than double its profit of 5.52 billion crowns in the corresponding period of 2019, before the coronavirus struck.

Like several other automakers Volvo has been forced to cut production due to global shortages of semiconductors, but it said a strong market recovery from last year's plunge during the pandemic helped first-half revenue rise by 26% to 141 billion crowns.

"The pandemic effect, when it comes to our business, we don't see it anymore," Chief Executive Håkan Samuelsson told Reuters.

"All our employees have not been vaccinated yet, but sales and production are really back to where we were."

The company, which is eyeing an initial public offering before the end of this year, said all its regions showed solid growth and improved market shares, with chargeable cars representing 25% of total sales.

Samuelsson said the evaluation process ahead of a potential IPO was progressing according to plan, adding the firm was still considering listing on the Stockholm stock exchange in the second half of 2021.

"The company stands stronger than ever and we are in the midst of a very substantial transformation... It has to be financed and access to the stock market is of course positive then," Samuelsson said.

Volvo Cars had been heavily affected at the start of the pandemic, plunging to a 989 million loss in the first half of 2020.

The company on Friday kept its second-half outlook for flat sales and revenue growth year on year, "unless supply of semiconductors improves". It said earlier this month that first-half sales rose 41% to 380,757 cars.

The Gothenburg-based firm plans to become a fully electric car maker by 2030, sell 600,000 battery electric vehicles at mid-decade, and build a European battery gigafactory in 2026.

($1 = 8.6821 Swedish crowns)

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