Social media companies Snap, Twitter posted dismal second-quarter earnings, leading lossesNasdaqIndex, of which Snap’s opening share price collapsed by more than 35%, and the main US stock index opened lower on Friday (22nd).
Before the deadline,Dow Jones Industrial Averagedown 0.03%,Nasdaq Composite Indexfell nearly 0.8%,S&P 500 Indexfell nearly 0.3%,Philadelphia SemiconductorThe index fell more than 2 percent.
Global stocks were on track for their best performance in a month this week, paring losses for the year to around 18%. Market speculation that the worst of the sell-off is over is partly responsible for the stock market rally. Concerns regarding rapid inflation and rising interest rates are hard to dispel, although expectations for a sharp rate hike by the Federal Reserve have eased.
Today’s report from Bank of America’s chief strategist shows that the bank’s bull and bear indicator is still at “0”, indicating that the market is still at the highest level of bearishness, market sentiment is still at “bottom”, and the bull market is still far away.
In terms of data, the initial value of the U.S. Markit manufacturing PMI in July was 52.3, which was better than the expected 52.0; the initial value of the Markit service industry PMI in July was 47, far lower than the expected 52.7, and the previous value was 52.7; the July composite PMI reported 47.5, the previous value 52.3.
For individual stocks, Twitter (TWTR-US), which missed expectations in its latest earnings report before the market opened, edged up 0.33% to $39.65 a share in early trade. According to the financial report, Twitter’s second-quarter revenue was reported at $1.177 billion, down 1% year-on-year, lower than the market’s estimate of $1.32 billion, compared to $1.19 billion in the same period last year; net loss of $270 million, compared with a net profit of $65.65 million in the same period last year, The adjusted loss per share was 0.08 yuan.
Twitter said in its earnings report that the industry faces headwinds in a macro environment, and uncertainty brought regarding by Musk’s acquisition revealed factors that led to disappointing results. However, Twitter is still emphasizing in the financial report that Musk’s termination of the acquisition is invalid and wrong, and the merger agreement is still valid.
In addition, Snap’s post-market earnings report yesterday was dismal and was downgraded by at least 9 Wall Street investment banks. Among them, Oppenheimer downgraded Snap from “outperform” to “equal”, saying the company faces too many headwinds, including competition from TikTok, Apple’s latest system SKAdnetwork 4.0, and the rise of online in retail media.
At the same time, Morgan Stanley also downgraded Snap stock with a price target of only $9 per share. JPMorgan said Snap’s revenue growth of just 13% indicated a significant deterioration, worse than expected.
As of 21:00 on Thursday (22nd) Taipei time:
Stocks in focus:
Verizon(VZ-US) fell 5.33% to $45.12 a share in early trade
U.S. telecommunications company Verizon reported mixed second-quarter earnings before the market, as phone subscriber growth was affected by higher prices, although revenue was reported at $33.8 billion, slightly higher than market estimates of $33.71 billion, earnings per share were reported at 1.31 USD, below market expectations of $1.33. At the same time, Verizon also lowered its full-year forecast.
Snap(SNAP-US) fell 34.59% to $10.70 a share in early trade
Due to slowing demand for online , social media company Snap’s financial report was disappointing. In the second quarter, revenue rose 13% to $1.11 billion and an adjusted loss per share of $0.02 was less than Wall Street analysts’ estimates of $1.14 billion and $1.14 billion. Loss of $0.01 per share. In addition, Snap also planned to slow hiring, citing weak revenue growth, and did not provide a third-quarter forecast because “prospect visibility remains extremely challenging.”
Mattel (MAT-US) fell 1.99% to $23.69 a share in early trade
Although toy maker Mattel’s latest earnings report benefited from strong sales of movie-themed toys that outperformed expectations, sales of its “American Girl” dolls fell nearly 20% last quarter, hurting investor confidence. Shares fell earlier.
Today’s key economic data:
- U.S. July Markit Manufacturing PMI reported 52.3, expected 52, the previous value of 52.7
- U.S. July Markit Services PMI at 47.0, expected 52.6, the previous value of 52.7
- U.S. Markit Composite PMI reported 47.5 in July, compared with 52.3 previously
Wall Street Analysis:
Craig Erlam, senior market analyst at Oanda, said it’s still too early to be optimistic regarding the stock market, but there are a lot of companies that are “not as bad as they had expected” and are turning out strong quarterly reports. While that’s a relief, it’s not a reason to be bullish on a sustained stock market rally.
Some investors are starting to buy the dips, noting that extreme bearishness is often a contrarian signal. John Roe, head of multi-asset funds at Legal & General Investment Management, said: “There are a lot of indicators pointing to negative factors in the stock market, and this is a good starting point for us and gives us more confidence to support the equity position.”
