Earnings season: Ad revenues power Alphabet to Q3 earnings beat

Google parent company Alphabet comes out swinging in Q3, notching earnings and revenues beats for a second consecutive quarter.

Alphabet earnings

Alphabet’s key stats

Alphabet posts another strong quarter with revenues and earnings per share beating Wall Street estimates.

This is the latest third quarter earnings report from a FAANG stocks member. Facebook and Netflix have already reported their Q3 financials.

Check out the Google owner’s key stats below:

  • EPS – $27.99 per share vs $23.48 per share forecast
  • Revenues – $65.12 billion vs $63.45bn forecast

However, the search engine and web services firm did also record couple of revenue misses from some of its key cash generators.

  • YouTube advertising revenues – $7.21 billion vs $7.40 billion forecast
  • Google Cloud revenues – $4.99 billion vs $11.16 billion forecast

Despite not meeting earnings, Google Cloud grew at a rate of 45% quarter-on-quarter. While YouTube revenues did not meet expectations, they showed year-over-year acceleration. In Q3 2021, YouTube ad revenue came to $5.04 billion. As you can see from the above, over $2bn was generated from YouTube advertising in the third quarter y-o-y.

Total revenue growth, incorporating all of Google’s services and networks, came to 41%.

Google’s profits came to $21bn – three times higher than pre-pandemic records. Operating losses for the sector were halved from $1.2bn to $644m.

Advertising generated $53.13bn across Alphabet’s brands. That’s a major increase over the $37.1bn recorded in the third quarter of 2020.

Alphabet shares, which remained fairly flat after the earnings call, are up about 57% across the year. At the time of writing, however, they had gained nearly 5%.

Apple change affects YouTube revenues but retail fosters growth

Much like FAANG stock contemporary Facebook, Alphabet noted the impact of Apple’s latest privacy update on money stemming from YouTube advertising. However, the update’s effects were more muted compared with Mark Zuckerberg’s social media platform.

In a call with analysts, Ruth Porat, Alphabet’s finance chief, said that the new privacy features had a “modest impact on YouTube revenues.” She added that “focusing on privacy has been core to what we’ve been doing consistently.”

The Apple App Transparency Tracking abilities in the iO4 operating system means users can limit how they are tracked. Customers can choose to essentially ignore a lot of ad targeting now. While this is bad news for the likes of Snap and Facebook, Google and Alphabet are less concerned. They own the Android operating system where iOS updates do not apply.

But according to Alphabet Chief Business Officer Philipp Schindler, the retail segment of Google and YouTube’s ad matrix generated the most returns. Some regions experienced a fourfold increase in Google shopping activity this quarter Schindler said.

Bricks-and-mortar isn’t dead. Instead, omnichannel [shopping] is in full force,” said Schindler in an analyst call, noting that cash flow from this sector was up 40% across the third quarter.

Where next for Alphabet?

Alphabet has caught the green bug. Chief Executive Sundar Pichai says Google campuses will continue to up their environmental efforts. Pichai said the search engine will operate on renewable, carbon-free energy by 2030.

Google Maps will also be updated to offer drivers an eco-option, basically outlining the most fuel-efficient route to their final destination. Additionally, Google Cloud users will also be able to track their carbon footprints using data captured by Google services.

Google is also planning to build a $1.2bn office complex in New York City, presumably designed and built using environmentally-friendly materials. It is also planning to refurb its California campus using the same green building philosophy.

What’s the Alphabet market consensus?

According to the Markets.com analyst consensus tool, Alphabet holds a strong buy rating:

Alphabet Analyst Consensus

News sentiment shows the media thinks Alphabet is on a bullish footing too:

Alphabet News Opinions

US Q3 earnings season is in full swing. Stay tuned for more updates. In the meantime, check out our earnings calendar to see which megacaps are reporting and when.

Thematic investing: tackling climate change

In our latest thematic investment guide, we look at the wider climate change picture.

How to invest in renewable energy & firms tackling climate change

The wider environmental picture

Our previous thematic investing guide to renewable energy flagged some of the companies specifically fighting the green fight through power generation. Climate change is not just about sustainable energy, though. Lots of moving parts comprise the anti-global warming engine.

Worldwide, masses of time and energy is being poured into combatting global warming. In the first few months of his Presidency, Joe Biden has pledged to increase funding into clean energy sources, reduce the US’ carbon footprint, re-enter the US into international climate accords.

The 2016 Paris Climate agreement, where 197 nations pledged to limit warming temperatures, is rightly seen as a watershed moment in the history of global change. But there is still more to be done.

That’s why, while it’s important to continue to invest in renewable energy, other companies are doing important work outside this sector. Electric vehicles, for example, are one way of tackling rising emissions. Less fossil fuel burned to power vehicles should greatly reduce greenhouse gas volumes in the atmosphere.

Q1 2021 EV sales were up 81% in the US. In China, they are up 239%. The likes of Tesla, NIO and Toyota are real pioneers here, pushing either fully electric or hybrid technology to new areas. Legacy carmakers like Renault, Peugeot, Audi, Ford, and VW are pushing ahead with integrating more EVs into their product lines.

We also see big tech firms doing their bit. Amazon, Alphabet and Facebook have all made strong carbon neutrality commitments. For instance, Amazon head honcho Jeff Bezos launched a $10bn climate change fund and committed the e-commerce behemoth to clean up its supply chains. Alphabet and Facebook are looking for renewable sources to power their energy-hungry data centres and have pledged to continue to invest in renewable energy.

Here are some stocks from firms helping to combat climate change that wouldn’t look out of place in a green-themed investment or trading portfolio.

Thematic investing: climate change focussed stocks to watch

NIO

NIO stocks have actually been sliding at the time of writing as part of a wider tech sell-off in response to rising US inflation and bond yields. But there are reasons to be cheerful regarding the Chinese EV manufacturer’s future.

Its Q1 2021 earnings report, released in late April, showed an impressive 19.5% rise in gross margin, beating market estimates, and coming in 3% higher.

Improved sales data shows NIO is on a growth footing too. The company sold 44,000 vehicles in 2020, 108% more than in 2019.

A small unit count initially, especially compared against someone like GM, which sold over 2 million vehicles in the same period, but the growth is the important factor here, not the total number of units sold.

In Q1 2021, NIO had already sold 20,600 vehicles. That’s a 423% increase. The automaker is also launching three new models, including an SUV, this year to gain ground in several market segments.

Factor in estimates that China, already the world’s largest automotive market, is expected 13 million annual EV sales, along with the emergence of China’s middle class, makes NIO an EV stock with plenty of juice left in its batteries.

TPI Composites

TPI Composites is a wind energy stock that is looking positively breezy. The firm produces blades for wind farms and other pieces of equipment for wind farm construction and operation.

TPI notched record revenues in its Q1 report, totalling $405 million. This represented a not insubstantial 13% increase against Q1 2020. The company produced 814 sets (a set has three wind blades) this quarter, which was 11% more than the same period last year.

The firm has spent large sums in the past couple of years to improve its manufacturing output. It now has production facilities in the US, Mexico, China, and India, putting it squarely in regional supply chains. TPI is also now looking to reduce its costs going forward, putting it back on the path to profitability.

In sales terms, TPI’s first-quarter net sales had increased by $48 million to $404 million – a 13.5% increase when compared to net sales of $356 million over the same period in 2020. It also recorded a 12.7% increase in turbine blade sales to $42 million.

Of course, TPI is up against some stiff competition in the form of firms like Vestas, but its combination of higher sales and a commitment to reducing operating costs point toward higher profits moving forward. TPI is one of the wind energy stocks to watch.

Alphabet

As stressed earlier, when you’re looking at thematic investing, don’t just stay within renewable energy stocks or wind energy stocks. Think of the wider picture. Companies that have committed to renewable energy may not be suppliers or producers themselves.

Take Google owner Alphabet for instance. The tech giant has long been praised for its sustainability commitments. By 2020, Alphabet claimed it was running on 100% renewable energy. Its data centres are some of the most water-efficient in the world, using 80% less H20 than the typical centre. Alphabet has plans to build more.

Alphabet’s earnings beat estimates in the first quarter of 2021. Revenues grew 34%. YouTube ad revenue was up 50% year-on-year. Earnings per share came in at $26.29 per share against the expected $15.82.

Alphabet’s core business is not related directly to clean power generation. However, it’s a good example of a major corporation with a proven track record of delivering on its emissions-cutting promises. Therefore, it would not be out of place alongside other more-focussed stocks in a climate change combatting portfolio.

Remember the risks of investing in renewable energy & climate change stocks

Whether investing in wind energy stocks, renewable energy, or companies working to fight global warming in general, remember the basic risks. Investing and trading are both inherently risky. Only invest or trade if you can afford to take any potential losses.

Billionaires, blocks & stocks: super rich shareholders cash in

Some of the world’s richest shareholders are reaping major windfalls from equities sales in 2021.

According to research by Bloomberg, the likes of Amazon’s Jeff Bezos and Google’s Sergey Brin are turning to stock sales to improve their already substantial fortunes.

A 14-month long bull market is helping industry insiders cash in. $24.4bn worth of equities have been offloaded in the period up to the first half of May 2021, compared against the $30bn sold in the same manner throughout the whole of 2020.

The bulk of these sales have been undertaken via trading programmes, a common practice for shareholders of this status.

Usually, large shareholders will sell stock in planned intervals. However, it’s the prolonged stock market rally that’s really made these deals pay off. Whether they were planned or just coincided with the current equities boom is up for debate. The key motivations to sell now are:

  • Valuations coming under pressure from rising inflation
  • Investors becoming wary of potential tighter post-Covid measures from the Fed
  • Joe Biden’s proposed capital gains tax hike

Who is selling?

The following names were mentioned by Bloomberg has being key stock sellers:

  • Jeff Bezos – Sold $6.7bn worth of Amazon shares in 2021
  • Mark Zuckerberg – Sold $1.67bn worth of Facebook shares since November 2021 through the Chan Zuckerberg Foundation charity
  • Larry Ellison – Sold $552.3m Oracle shares
  • Charles Schwab – Sold $192 worth of shares in his eponymous brokerage
  • Sergei Brin – $163m worth of Alphabet stock
  • Eric Yuan – Sold $185m of Zoom shares

One thing to note is that all of the above are involved in big tech players. Typically, such entrepreneurs’ portfolios are heavily weighted to tech stocks. It’s where they generate their wealth after all. However, divesting such levels of stocks makes sense. It’s rarely a great idea to bet solely on one horse, even if said horse has made you a multi-billionaire.

These stock sales will have further ripples away from equities markets. Hundreds of millions could be about to be poured into areas like art, real estate, and philanthropy.

Get more insider insights with our Insider Trades tool

The Insider Trades tool highlights the increase and decrease in shareholdings for company insiders, so you can make a more informed decision on your position.

This tool can help you get a better understanding of a stock’s performance and understand why thousands of insiders are buying or selling their own company stock, helping you make better trades.

Click here to learn more about Insider Trades.

Wochenausblick: Zinsentscheidung der BoE, Earnings Season geht weiter & Beschäftigungszahlen

Uns steht eine geschäftige Woche bevor, mit dem ersten Treffen der Bank of England des Jahres inmitten von Spekulationen zu Negativzinsen und Kritik zu ihrem Programm der quantitativen Lockerung. Earnings Season geht weiter, angeführt von Amazon und Alphabet, und die Beschäftigungszahlen für Januar werden, nach dem Rückgang im Dezember, veröffentlicht.

BoE-Mitteilung: Negativzins auf dem Weg?

Die Bank of England trifft sich diese Woche zur ersten Entscheidung zum Zins 2021, wobei die Frage des Negativzinses umgeht.

Während Zinsraten bei einem Rekordtief von 0,1% liegen, wird der Abstieg in den Negativzins laufend untersucht. Im Oktober 2020 begann die BoE, Banken zu befragen, um zu beurteilen, ob sie für negative Zinssätze bereit sind, obwohl Gouverneur Andrew Bailey zu diesem Zeitpunkt ausdrücklich sagte, dass in naher Zukunft keine Zinsänderung kommen würde.

Das externe Mitglied Silvana Tenreyro verteidigte Negativzinsen Anfang Januar 2021 leidenschaftlich, obwohl die internen Mitglieder sich dazu noch nicht bewegt haben. Sie könnten auf die Ergebnisse der Bank-Umfrage warten, bevor sie etwas bekannt geben.

Anderswo wurden Fragen zum Programm der quantitative Lockerung der Bank durch die eigene interne Aufsicht, dem Independent Evaluation Office (IEO), gestellt. Den Ergebnisse des IEO zufolge, „versteht die BoE ihr eigenes Programm zur quantitativen Lockerung nicht“.

Einem Bericht der Financial Times zufolge, der das IOE zitiert, hat das Programm der quantitativen Lockerung der BoE auf betrieblicher Ebene funktioniert, hat aber auch zu Kontroversen geführt, da „wichtige Wissenslücken“ der Zentralbank ihre Fähigkeit einschränken, „öffentliches Verständnis und Vertrauen zur quantitativen Lockerung“ aufzubauen.

Die Bank of England wandte sich letztes Jahr der quantitativen Lockerung zu, als Möglichkeit der Corona-gebeutelten Wirtschaft finanziell zu helfen. Sie hat, in der Hoffnung, die Inflation bei der 2,0%-Marke halten zu können, Geld gedruckt und Staatsanleihen an den Finanzmärkten gekauft.

In dieser Woche werden keine Änderungen des Leitzinssatzes oder des Umfangs der quantitativen Lockerung erwartet. Angesichts der Verschlechterung einiger Wirtschaftsindikatoren seit dem letzten Treffen wird jedoch eine genaue Prüfung der Sprache und des Tonfalls in Bezug auf den Negativzins vorgenommen werden. Die Bank wird wahrscheinlich außerdem Bedenken äußern, die den Erholungsweg betreffen und die Notwendigkeit flexibel zu bleiben. Hinweise auf eine mögliche Bewegung in den Negativzins würden sich vermutlich negativ auf den Pfund Sterling auswirken.

Earnings Season geht weiter mit den Berichten von Amazon und Alphabet

An der Wall Street ist es immer noch Earnings Season und die Bericht der Large Caps kommen weiter rein. Bei einigen ist wahrscheinlicher, dass sie in der Corona-Situation erfolgreich waren, als bei anderen und Amazon ist in einer guten Lage einen Anstieg der Gewinne im Quartalsbericht bekanntzugeben.

Erstmal fallen die Einkäufe über die Feiertage und ein verspäteter Prime Day gut ins jüngste Quartal. Berichte deuten darauf hin, dass Amazon es geschafft haben könnte bis zu 42 Cent je Dollar pro Verkauf eingesteckt zu haben.

Allein mit einem Wachstum der Verkäufe zum Prime Day von 45,2% gegenüber dem Vorjahr auf einen Rekordwert von 10,4 Milliarden USD konnte Amazon anscheinend vom Lockdown profitieren, da Käufer wirklich nur stöbern, klicken und kaufen können, anstatt in die Innenstädte zu gehen. Amazon hat außerdem berichtet, dass Cyber Monday der beste Shopping-Tag je war, mit Verkäufen innerhalb von 24 Stunden in Höhe von 9,2 Milliarden USD.

Amazon-Aktien haben den S&P 500 mit + 74,5% gegenüber + 17,9% im vergangenen Jahr übertroffen, was zum Teil auf den besseren Prime-Lieferservice, dem Vorteil von Online-Händlern im Lockdown und dem Wachstum der Amazon Web Services zurückzuführen ist.

Big Tech hat im Lockdown auch gute Ergebnisse erzielt und Analysten glauben, dass der Google Mutterkonzern Alphabet nächste Woche einen Anstieg im Geschäftsbericht zu Q4 berichten wird.

Es wird erwartet, dass die Werbeeinnahmen hier der Haupttreiber sind. Die Einnahmen aus Suchanzeigen stiegen im dritten Quartal um 9%, nachdem die Einnahmen im zweiten Quartal um 8% gesunken waren, da sich die Unternehmen an die Corona-Realität angepasst hatten. Zum Vergleich können wir uns Microsofts jüngste Einnahme aus der Suchmaschinen-Werbung ansehen, die im letzten Quartal 2,18 Milliarden USD ausgemacht hat, ein Anstieg von 1%.

Angesichts Vormachtstellung Googles in diesem Marktsektor wird erwartet, dass diese viel größer sein werden und möglicherweise erhebliche Gewinne erzielen werden – insbesondere, da das YouTube-Engagement im letzten Quartal gestiegen ist. Könnte sich der Trend fortsetzen?

Schauen Sie weiter unten im Artikel, um zu sehen, welche Large Caps diese Woche ihre Geschäftsberichte veröffentlichen.

Veröffentlichung der Beschäftigungszahlen nach Rückgang im Dezember

Die jüngsten Beschäftigungszahlen werden nächste Woche erwartet. Sie gelten als Indikator für die Gesundheit der US-Wirtschaft.

Der Arbeitsmarkt wurde im Dezember schwer getroffen, als die letzte Veröffentlichung ergab, dass 140.000 Arbeitsplätze in dem Monat die Wirtschaft verlassen hatten. Die wöchentlichen Zahlen zu Arbeitslosenanträgen ging Anfang Januar auf 965.000 hoch, was darauf hindeutet, dass die US-Wirtschaft wieder ächzt.

Das letzte Fed-Treffen war genau das, was wir erwartet hatten: keine wesentlichen Änderungen der aktuellen Wirtschaftspolitik. Aber Präsident Biden ist jetzt im Weißen Haus und er hat ein Konjunkturpaket in Höhe von 1,9 Billionen USD versprochen, das die Dinge wieder in Gang bringen könnte. Teil von Bidens Plan ist der Schutz kleinerer Unternehmen und Geschäfte – etwas das 82% der Amerikaner einer Umfrage von Morning Consult zufolge von weiteren Konjunkturpaketen erwarten.

Wenn das Konjunkturpaket verabschiedet wird, werden 15 Milliarden USD an Beihilfen für Kleinunternehmen frei, zusammen mit Krediten zu niedrigen Zinsen in Höhe von 35 Milliarden USD. Das Programm zum Schutze von Gehaltszahlungen wird wahrscheinlich auch weitergeführt. Die Schecks des Konjunkturprogramms sollten bald kommen, was 1.400 USD in die Taschen der Verbraucher bringen würde, von denen man sich erhofft, dass sie sie ausgeben und damit die Wirtschaft landesweit wieder antreiben.

Allerdings ist es von oberster Bedeutung dies schnell zu tun, da 57% der Kleinunternehmer glauben, nur bis Juni durchhalten zu können. Danach kann es keiner genau sagen, da viele Kleinunternehmen jetzt schon schnell durch ihre Geldreserven brennen. Wenn das Paket verabschiedet werden kann, großartig. Wenn nicht, könnte es zu weiteren Arbeitsplatzverlusten durch schließende Unternehmen kommen.

 

Top Wirtschafts-Daten der Woche

 

Date  Time (GMT)  Currency  Event 
Mon 1 Feb  9.00am  EUR  Final Manufacturing PMI 
  9.30am  GBP  Final Manufacturing PMI 
  2.30pm  CAD  Manufacturing PMI 
  3.00pm  USD  ISM Manufacturing PMI 
       
Tue 2 Feb  3.30am  AUS  RBA Bank Statement 
  9.45pm  NZD  Employment Change q/q 
  9.45pm  NZD  Unemployment Rate 
       
Wed 3 Feb  9.00am  EUR  Final Services PMI 
  9.30am  EUR  Final Services PMI 
  1.15pm  USD  ADP Non-Farm Employment Change 
  3.00pm  USD  ISM Services PMI 
  3.30pm  USD  US Crude Oil Inventories 
       
Thu 4 Feb  12.00pm  GBP  BoE Monetary Policy Statement 
  12.00pm  GBP  MPC Official Bank Rate Votes 
  12.00pm  GBP  Monetary Policy Statement 
  12.00pm  GBP  Official Bank Rate 
  1.30pm  USD  Unemployment Claims 
  3.30pm  USD  US Natural Gas Inventories 
       
Fri 5 Feb  12.30am  AUD  RBA Monetary Policy Statement 
  1.30pm  CAD  Employment Change 
  1.30pm  CAD  Unemployment Change 
  1.30pm  USD  Average Hourly Earnings m/m 
  1.30pm  USD  Non-Farm Employment Change 
  1.30pm  USD  Unemployment Rate 

 

Top Geschäftsberichte diese Woche

 

Date  Company  Event 
Mon 1 Feb  Nintendo  Q3 2020 Earnings 
  Ryanair  Q3 2021 Earnings 
     
Tue 2 Feb  Amazon  Q4 2020 Earnings 
  Alphabet  Q4 2020 Earnings 
  Pfizer  Q4 2020 Earnings 
  ExxonMobil  Q4 2020 Earnings 
  UPS  Q4 2020 Earnings 
  BP  Q4 2020 Earnings 
  Chubb  Q4 2020 Earnings 
  Ferrari  Q4 2020 Earnings 
  Panasonic  Q3 2021 Earnings 
  Mitsubishi Electric  Q3 2020 Earnings 
  Electronic Arts  Q3 2021 Earnings 
     
Wed 3 Feb  PayPal  Q4 2020 Earnings 
  Siemens AG  Q1 2021 Earnings 
  Sony Corp.  Q3 2020 Earnings 
  GlaxoSmithKline  Q4 2020 Earnings 
  Spotify  Q4 2020 Earnings 
  Volvo  Q4 2020 Earnings 
  MetLife  Q4 2020 Earnings 
  Mitsubishi  Q3 2021 Earnings 
  Hitachi  Q3 2020 Earnings 
  eBay  Q4 2020 Earnings 
     
Thu 4 Feb  Shell  Q4 2020 Earnings 
  Phillip Morris  Q4 2020 Earnings 
  Gilead  Q4 2020 Earnings 
  Activision Blizzard  Q4 2020 Earnings 
  Unilever  Q4 2020 Earnings 
  ABB  Q4 2020 Earnings 
  Pinterest  Q4 2020 Earnings 
  Ford  Q4 2020 Earnings 
  YUM! Brands  Q4 2020 Earnings 
  Motorola  Q4 2020 Earnings 
     
Fri 5 Feb  Linde  Q4 2020 Earnings 
  Estee Lauder  Q3 2021 Earnings 
  BNP Paribas  Q4 2020 Earnings 
  Vinci  Q4 2020 Earnings 
  Aon  Q4 2020 Earnings 
  Carlsberg  Q4 2020 Earnings 
  Assa Abloy  Q4 2020 Earnings 

 

Wochenausblick: Big Tech Gewinne heizen vor der Wahl die Volatilität an

Es wird voraussichtlich eine volatile Woche für die US-Märkte, da die Earnings Season an der Wall Street mit den Berichten von Big Tech weitergeht. Apple, Amazon, Microsoft, Alphabet und Facebook sind unter den größten Namen, die ihre Quartalsberichte veröffentlichen. Währenddessen hört man viel von den Zentralbanken, mit Treffen der Bank of Japan, der Bank of Canada und der Europäischen Zentralbank. Und natürlich zählen wir alle die Tage bis zur Präsidentschaftswahl im November und behalten alle Augen auf dem Vix.

Big Tech Gewinne

Es ist eine große Woche für Geschäftsberichte und der Fokus wird zweifelsfrei auf den FAANGs liegen, mit den Donnerstags erwarteten Geschäftsberichten von Apple (AAPL), Amazon (AMZN), Alphabet (GOOGL) und Facebook (FB). Die Geschäftsberichte kommen im Schatten einer kartellrechtlichen Ermittlung, die das US-Justizministerium (DOJ) gegen Googles Muttergesellschaft Alphabet gestartet hat. Der Fokus der Ermittlungen liegt auf Vereinbarungen, die Alphabet mit Handy-Herstellern und Netzanbietern gemacht hat, um Google als Standardsuchmaschine auf neuen Handys auszuliefern. Während Anleger das bisher nicht groß tangiert hat, könnten die Geschäftsberichte zu einer größeren Volatilität auf dem Aktienmarkt führen.

Es bestehen weiter Bedenken, dass der Fall zu einem Aufschwung für das Service-Angebot von Apple führen könnte. Das DOJ sagt, dass Apple zwischen 8 und 12 Milliarden USD an Google verdient, was etwa 17-26% des Umsatzes des Service-Bereichs von Apple entspricht. Apple hat vor kurzem das iPhone 12 vorgestellt, mehr und mehr ist der hohe Aktienwert aber durch das Ökosystem und Umsatz aus dem Service-Bereich bedingt. Nichtsdestotrotz bleiben Analysten bullisch was die Tech-Giganten angeht, die weiterhin unter den größten Gewinnern dieses Jahres bleiben. Microsoft veröffentlicht seine Berichte am Dienstag und eine Vielzahl weiterer Aktien mit hoher Marktkapitalisierung folgen in den kommenden Tagen.

EZB

Mit steigendem Euro gegen den US-Dollar liegt der Fokus der Devisenmärkte auf dem Treffen der Europäische Zentralbank (EZB) am Donnerstag. Die Märkte wetten immer stärker darauf, dass die EZB weitere Lockerungen anleitet, um die stockende Konjunktur und stagnierende Preise anzuheizen. Die Eurozone begann im September ihren zweiten Monat der Deflation in Folge und die Risiken weiterer Einschränkungen im Block auf die wirtschaftliche Entwicklung haben sich seit dem letzten Treffen deutlich verschlechtert. Die Gefahr eines Rückfalls in eine Rezession ist real. So sagte Christine Lagarde vor kurzem, dass das Wiederaufflammen des Virus eine klare Gefahr für die Wirtschaft ist. Angesichts der trüben Aussichten und des schrecklichen Inflationsumfelds scheint es überaus wahrscheinlich, dass die EZB ihr Anleihenkaufprogramm bis Dezember um weitere 500 Mrd. EUR erhöhen wird.

Um einen Eindruck der Stimmung in der EZB zu erhalten, sagte der normalerweise falkenartige österreichische Kopf der Zentralbank Robert Holzmann vor kurzem: „Weitere belastbare, weitergreifende oder striktere Maßnahmen benötigen wahrscheinlich kurzfristig monetäre und steuerliche Anpassungen.“

In der Zwischenzeit finden diese Woche außerdem Treffen der Bank of Japan und der Bank of Canada statt.

Wirtschaftsdaten

Der vorläufige Bericht zum Wachstum des US-BIP im dritten Quartal wird das Highlight der Märkte sein, die nach Hinweisen suchen, wie schnell und nachhaltig die Erholung von statten geht. Es wird auf Grund der Wiedereröffnung der Geschäfte nach dem ersten Lockdown von einem Wirtschaftswachstum um die 30% gerechnet. Die Prognose der Fed von Atlanta geht davon aus, dass die Wirtschaft im Quartal um 35% gewachsen ist – aber dies verdeckt natürlich den tatsächlichen Schaden, wenn dieses Wachstum auf einen Absturz von 31% im zweiten Quartal folgt. Der Bericht zum BIP kommt für Donald Trump genau richtig, der in der Lage sein wird, behaupten zu können, die Wirtschaft laufe spitze.

Wahlbeobachtung

Die letzte Hürde: Umfragewerte ändern sich wahrscheinlich nicht viel – die Anzahl der unentschiedenen Wähler ist diesmal klein. Biden hat landesweit einen starken Vorsprung, aber bei den hart umkämpften Schlüsselstaaten, die das Rennen letztendlich entscheiden, sie es knapper aus. Wir richten am 2. November ein spezielles Vorwahlkampf-Live-Event aus, um die Reaktion der Märkte durchzuspielen.

Top Wirtschafts-Daten der Woche

Öffnen Sie den Wirtschaftskalender auf der Plattform für eine vollständige Übersicht der Veranstaltungen und Ereignisse.

Date  Event 
Oct 26th  German Ifo business climate 
Oct 26th  UK Nationwide house price index 
Oct 26th  US new home sales  
Oct 26th  SNB Chairman Jordan speaks 
Oct 27th  BoJ core CPI 
Oct 27th  US durable goods, core durable goods 
Oct 27th  US CB consumer confidence 
Oct 28th  Australia CPI inflation 
Oct 28th  Bank of Canada rate decision 
Oct 28th  EIA crude oil inventories 
Oct 28th  FOMC member Kaplan speaks 
Oct 29th  Bank of Japan policy statement & economic outlook 
Oct 29th  German preliminary CPI inflation 
Oct 29th  UK mortgage approvals & lending figures 
Oct 29th  US advanced GDP – Q3 
Oct 29th  US weekly jobless claims 
Oct 29th  ECB policy decision & press conference 
Oct 29th  US pending home sales 
Oct 29th  US natural gas storage 
Oct 30th  Tokyo core CPI 
Oct 30th  Japan industrial production 
Oct 30th  French flash GDP 
Oct 30th  German preliminary GDP 
Oct 30th  Eurozone CPI flash estimates 
Oct 30th  Canada GDP 
Oct 30th  US personal spending & core PCE price index 
Oct 30th  Chicago PMI 
Oct 30th  UoM consumer sentiment 

 

Top Geschäftsberichte diese Woche

Vergessen Sie nicht unsere täglichen Earnings Season Specials auf XRay einzuschalten, um weitere Updates zu erhalten.

Date  Company  Event 
26-Oct  SAP SE  Q3 2020 Earnings 
27-Oct  Microsoft Corp.  Q1 2021 Earnings 
27-Oct  Pfizer Inc.  Q3 2020 Earnings 
27-Oct  Ping An Insurance Co.  Q3 2020 Earnings 
27-Oct  Merck Co.  Q3 2020 Earnings 
27-Oct  Novartis AG  Q3 2020 Earnings 
27-Oct  Eli Lilly and Co.  Q3 2020 Earnings 
27-Oct  3M Co.  Q3 2020 Earnings 
27-Oct  AMD (Advanced Micro Devices) Inc.  Q3 2020 Earnings 
27-Oct  Caterpillar Inc.  Q3 2020 Earnings 
27-Oct  HSBC Holdings plc  Q3 2020 Earnings 
27-Oct  S&P Global Inc  Q3 2020 Earnings 
27-Oct  BP plc   Q3 2020 Earnings 
28-Oct  Visa Inc.  Q4 2020 Earnings 
28-Oct  MasterCard Inc.  Q3 2020 Earnings 
28-Oct  United Parcel Service Inc. (UPS)  Q3 2020 Earnings 
28-Oct  Amgen Inc.  Q3 2020 Earnings 
28-Oct  ServiceNow Inc  Q3 2020 Earnings 
28-Oct  Boeing Co.  Q3 2020 Earnings 
28-Oct  Sony Corp.  Q2 2020 Earnings 
28-Oct  GlaxoSmithKline plc (GSK)  Q3 2020 Earnings 
28-Oct  Gilead Sciences Inc.  Q3 2020 Earnings 
28-Oct  Anthem Inc.  Q3 2020 Earnings 
28-Oct  Equinix Inc  Q3 2020 Earnings 
29-Oct  Apple Inc.  Q4 2020 Earnings 
29-Oct  Amazon  Q3 2020 Earnings 
29-Oct  Alphabet  Q3 2020 Earnings 
29-Oct  Facebook Inc.  Q3 2020 Earnings 
29-Oct  Samsung  Q3 2020 Earnings 
29-Oct  China Life Insurance Co Ltd (A)  Q3 2020 Earnings 
29-Oct  Comcast Corp. (Class A)  Q3 2020 Earnings 
29-Oct  Shopify Inc (A)  Q3 2020 Earnings 
29-Oct  Sanofi S.A.  Q3 2020 Earnings 
29-Oct  AB InBev SA-NV (Anheuser-Busch InBev)  Q3 2020 Earnings 
29-Oct  American Tower Corp.  Q3 2020 Earnings 
29-Oct  Starbucks Corp.  Q4 2020 Earnings 
29-Oct  Shell (Royal Dutch Shell)  Q3 2020 Earnings 
29-Oct  Volkswagen (VW) St.  Q3 2020 Earnings 
29-Oct  Stryker Corp.  Q3 2020 Earnings 
29-Oct  China Petroleum & Chemical (Sinopec) (A)  Q3 2020 Earnings 
29-Oct  China Life Insurance Co. Ltd.  Q3 2020 Earnings 
30-Oct  China Construction Bank Corp.  Q3 2020 Earnings 
30-Oct  AbbVie Inc  Q3 2020 Earnings 
30-Oct  ExxonMobil Corp. (Exxon Mobil)  Q3 2020 Earnings 
30-Oct  Chevron Corp.  Q3 2020 Earnings 
30-Oct  Honeywell  Q3 2020 Earnings 
30-Oct  PetroChina Co Ltd (A)  Q3 2020 Earnings 
30-Oct  Postal Savings Bank of China Registered Shs -A-  Q3 2020 Earnings 
30-Oct  TOTAL S.A.  Q3 2020 Earnings 
30-Oct  AUDI AG  Q3 2020 Earnings 
30-Oct  Altria Inc.  Q3 2020 Earnings 
30-Oct  Colgate-Palmolive Co.  Q3 2020 Earnings 
31-Oct  Berkshire Hathaway Inc.  Q3 2020 Earnings 
31-Oct  Industrial and Commercial Bank of China Ltd (A)  Q3 2020 Earnings 
31-Oct  Industrial & Commercial Bank of China Ltd.  Q3 2020 Earnings 
31-Oct  China Merchants Bank Co Ltd.  Q3 2020 Earnings 
31-Oct  Bank of China Ltd  Q3 2020 Earnings 

 

Barclays shares pop, SPX faces big hurdle with Fed, GDP ahead

Barclays CEO Jes Staley reckons that after Covid-19 the idea of sticking thousands of people in a building may be a thing of the past. I heartily agree. Working from home is clearly working rather well. Also, banks are no doubt looking at this and thinking they can cut costs by closing offices, call centres and branches. Nevertheless, it highlights how bosses and government have a very hard task in exiting lockdown. Moreover, what about the Pret or the pub that depends on lunch trade from the City workers filling up these offices every day? The impact on the economy will be permanent.

Shares in Barclays popped over 5% despite the lender taking a £2.1bn credit impairment charge, five times the level of a year before. Like its US peers, trading revenues soared by 77% but this offset may be a one-off for banks as volatility returns to more normal levels. Shares were due a rally – they’ve been beaten down so much and haven’t really participated in the upturn. Investors may need to wait for dividends but UK banks could be in much better shape their share prices indicate.

The S&P 500 failed a major test yesterday as bulls stumbled amidst a blitz of earnings releases and doubts about oil prices. The broad index rallied on the open to trade above 2900 but closed lower and crucially below the key 2885 resistance at 2,863, forming a dark cloud cover bearish signal.

Futures though are higher again today, but we will need to see these levels broken decisively on a close before we consider a push to the 61.8% retracement of the drawdown at 2934. For that we will look to earnings and the US advanced GDP print – seen at -4% – but more importantly the messaging from the Fed today will be crucial for sentiment in equity markets.

Asian markets were broadly firmer overnight with traders expecting the Fed to make clear it will not remove any accommodation until the threat from Covid-19 has passed.

European indices opened strongly, building a very solid session on Tuesday that saw the FTSE 100 rally almost 2% and close above the Apr 14th swing high, but then we saw weakness creep in after half an hour’s trading outside of the UK market, which looks pretty solid as it taps on 6,000.

Italian bonds have softened after Fitch cut the country’s debt to one notch above junk. This unscheduled move followed S&P affirming Italy’s status but with a negative outlook. The yield on Italian 10-year BTPs spiked to 1.83%, the highest since Friday, and it just causes a little added worry for the ECB ahead of its meeting tomorrow. BTP-Bund spreads widened.

Alphabet dealt with a sharp decline in ad revenue growth in the first quarter as a result of the Covid-19 outbreak and lockdown measures that are stifling consumer spending, but management pointed to a rebound in April and outline spending cuts that sent shares up 8% after hours.

The fact that Alphabet sees ‘some signs users are returning to normal behaviour’ does not in itself mean the global economy is anywhere near to normal. Alphabet is one of the best placed companies to grow out of the crisis and should benefit from consumers increasing screen time in lockdown and no doubt growing digital ad spend as economies recover in the latter part of 2020 and through 2021. Structural shifts boosting digital ad growth that Covid-19 is accelerating will also be factor.  Facebook and Microsoft report today.

Elsewhere, front month WTI bounced off the lows after testing $10 to move up through $14 by the European session open. API data showed inventories rising almost 10m barrels in the week to Apr 24th, but this was lower than estimates. As ever we are looking at the EIA figures with more interest. A slowing in inventory builds from the +15M we’ve seen in the last three weeks can be expected as we reach tank tops at Cushing. Expect volatility in the front month WTI to be very high until expiry.

Charts

S&P 500 looks to clear key resistance again, still worried about rolling over

FTSE 100 looks to breakout of recent range, taking out the horizontal resistance and looking to breach 6,000 but first it’s got the 50-SMA to deal with.

Week Ahead: Bumper week with FOMC, ECB, FAANGS & GDP

Welcome to your guide to the week ahead in the markets. Remember you can now find all the key events affecting the markets in our new Events Calendar in the platform.

European Central Bank rate decision

Last week ECB president Christine Lagarde allegedly told EU leaders during a private video summit that the bloc could be facing a drop in GDP of up to 15%, and that their efforts to contain the outbreak have been both too little and too late. Monetary policy can only go so far, but the ECB does still have room to manoeuvre. Expansion of QE will likely be the first port of call if policymakers decide more needs to be done, but minutes from the March 18th meeting show that cutting rates was floated, too.

FOMC decision – has the Fed got any ammunition left?

What’s left for the Federal Reserve to do? Rates have been slashed to zero, and that’s where futures markets see them staying well into 2021 at least. And it’s hard to announce more QE when you’ve already committed to unlimited asset purchases. The key question is what the FOMC has left in reserve in case its vast stimulus measures aren’t enough. Will policymakers set negative rates? Will they buy corporate stocks? Will they explicitly target yields on government bonds? Markets will be looking for reassurance that policymakers still have plenty of ammunition left. 

Bumper week of earnings with Apple, Alphabet, Facebook reporting 

Netflix has already reported earnings, but this week sees the rest of the FAANG group offering up their quarterly figures. Tesla and Microsoft are also amongst the heavy hitters providing updates this week. 

US, Eurozone GDP 

We’ve seen piecemeal evidence of the impact COVID-19 has had on the US and Eurozone economies thanks to industrial data, PMIs, and business sentiment figures. But now it’s time to get the full picture, as the US and Eurozone will both publish estimates of Q1 growth. It was initially believed that moderate growth in January and February would have softened the blow from social distancing and widespread lockdowns that went into effect in March. Now the consensus is that the recession expected in Q2 arrived much earlier. Estimates vary wildly, but no matter how dire the results, the figures for Q2 are likely to be way worse.

Heads-Up on Earnings

After-Market   28-Apr   Alphabet – Q1 2020  
After-Market   29-Apr   Microsoft – Q3 2020  
After-Market   29-Apr   Facebook – Q1 2020  
After-Market   29-Apr   Tesla – Q1 2020  
After-Market   30-Apr   Apple – Q2 2020  
After-Market   30-Apr   Amazon – Q1 2020 

Key Events

03.00 UTC   28-Apr   BOJ Rate Decision & Outlook Report  
07.00 UTC  28-Apr  Spanish Unemployment Rate Q1 
14.00 UTC   28-Apr   US CB Consumer Confidence  
01.30 UTC   29-Apr   Australia Quarterly CPI  
12.00 UTC   29-Apr   Germany Preliminary CPI  
12.30 UTC   29-Apr   US Advance GDP QoQ  
14.30 UTC   29-Apr   US EIA Crude Oil Inventories  
18.00 UTC   29-Apr   FOMC Rate Decision  
09.00 UTC   30-Apr   Eurozone Flash GDP  
11.45 UTC   30-Apr   ECB Rate Decision and Statement  
12.30 UTC   30-Apr   US Initial Jobless Claims  
14.30 UTC   30-Apr   US EIA Natural Gas Storage 

Tech stocks under pressure

Markets remain on the hook to the trade war rumblings, but a new war has opened up that threatens equity investors – a war on tech. What the Fed threatens to give, the DoJ takes away.

Yesterday we saw a soft start in the US before the ISM print missed and investors raised bets the Fed will cut rates this year. But the Fed put was not enough to fight the tide off tech woes. 

Fangs are under severe pressure amid fears they are in the crosshairs of trust busters. The DoJ and FTC are marking targets and loading up. Whilst it’s far too early to say if any would, or could, be ripe to be broken up, there’s a real threat this will depress multiples and mean we need to reset expectations. Given the Fangs have been at the front of the market expansion in recent years, this will act as a drag on sentiment as well.

A couple of very big moves yesterday in Alphabet and Facebook. 

Alphabet –6% – support now seen around $968, before $895 comes into play. 

Facebook –7.5% – key support seen at $159, below that we look to the $145 level. 

Calls have been growing louder and louder for the authorities to at least look at antitrust issues for the tech giants. Political pressure is building – lawmakers sniff votes in tackling big tech. The shift really happened last year with Facebook’s scandals, which broken the illusion of Silicon Valley being in it for the little guy. They’re just big corporations out to make money like any other – the politicians can smell blood. As I noted a year or two ago, I always thought Trump had the hallmarks of a Teddy Roosevelt trust-buster.  

So now we have the Nasdaq in correction territory – down 1.6% yesterday to take it more than 10% off its all-time highs. The Dow was flat, while the S&P 500 notched a decline of 0.3%. The FTSE 100 ended the day in the green, up 0.3% at 7184 with the key 7150 level holding.

Asian shares followed Wall Street’s lead overnight, and futures show European shares are under the cosh again today.

Rates

US Treasury yields continue their slide with the 10yr slipping to 2.085% and threatening to find the 2.05% level now. EURUSD has broken out of technical resistance due to the slide in yields as markets bet on a Fed rate cut. EURUSD faces resistance at 1.126/7 but having broken out of the long-term descending wedge we could now look for more gains. Has the dollar rally ended? Well it all depends on the Fed. 

Today’s Jay Powell speech is now key to market sentiment after dovish comments from James Bullard yesterday. 

St. Louis Fed boss James Bullard – a voting member of the FOMC – says a rate cut may be warranted soon. He talked about a sharper than expected slowdown. He also discussed a cut as insurance – some sense the Fed is seeking to get ahead of the curve – too late! Over to Powell later today.

Bullard has always been one of the most dovish members of the FOMC – the market may have massively miscalculated the US central bank’s view of the economy, inflation and risks to its forecasts. I rather think the Fed will be a lot less ready to ease than the market thinks, and this suggests a significant decoupling between the Fed and market expectations.

EZ inflation

Ahead of this we have the Eurozone CPI print. The last reading showed inflation rose to a 6-month high in April at 1.7%, whilst core price growth rose to 1.3%. However, this uptick seems to be down to one-offs and the core read is expected to revert to trend around 1% in May, with the headline print at 1.4%. 
 

Woodford shut – worse to come? 

Neil Woodford has suspended trading in the Woodford Equity Income. Woodford has clearly made a series of poor investment decisions. Out of love UK stocks with entirely domestic may have been ultra-cheap, but they’re still unloved and still cheap. Provident has been a disaster. Kier, whose shares tumbled 40% yesterday, also disaster. It’s been a tough few years for Woodford and things look like they will get worse still. 

RBA cut 

No surprise the RBA cut rates, it had been fully priced in. The question now is how many more? The statement didn’t tell us anything new. No indication there will be more this year. Worth noting the RBA’s own forecasts are predicated on 50bps of cuts so we’re only half way there. Watch the data. AUDUSD has gained a few pips post the statement, with little detail on future cuts likely to give the bulls some hope. Resistance at 0.6990, the 38.2% Fib level, tested and rejected.

Retail sales

UK retail sales fell off a cliff in May – down 2.7%. This is the worst ever decline in retail sales and will hit the sector today.

Morning note: SPX record intra-day high, China data soft, Alphabet miss

The S&P 500 notched up a fresh record high as spending and inflation data showed lots of the former and not much of the latter. Stand down on the stagflation klaxon, prints like yesterday’s are good for risk and keep the Fed on the leash. Meanwhile corporates are beating on earnings and we now may be set to avoid the earnings recession which was expected.

PCE inflation, the Fed’s preferred gauge, came in at 1.6%. Spending was much stronger with consumer spending +0.9%, the fastest growth since 2009. FOMC meeting decision tomorrow will likely not offer too many surprises. Without inflation really coming through there is not the pressure on the Fed to raise rates. Markets though are still – in my view – underestimating likelihood of a hike this year. Policymakers will have to acknowledge the risks to financial stability and the impressive Q1 GDP print. 

The S&P notched up a fresh intra-day record high

Data from China overnight is bad for risk. China manufacturing activity was weaker than expected overnight, with the April purchasing managers indices disappointing. The official PMI came in at 50.1, whilst the Caixin number was 50.2. The gauges are barely in expansion territory and having jumped in March, the figures are a bit of a disappointment. Export orders were weak and it all rather suggests there could be a bit more softness to come.

Eyes now on flash data from the Eurozone for any clues about a rebound in the global economy. Don’t hold your breath.

Alphabet earnings miss forecasts

Alphabet earnings were a big disappointment as revenue growth missed expectations. More competition for sure is a factor as the likes of Amazon and Facebook March forwards. Google will have to get used to competition more – last quarter’s report was a bit of heads up on that front and this quarter’s numbers confirm it.

A tough comparison to last year was also a factor as changes to YouTube a year ago delivering a boost then that was not repeated this year. FX headwinds were also a big factor in the slower revenue growth and should not be ignored. Sales of the Google Pixel have also proved disappointing.

Overall, revenues rose 17% yoy, to $36.3bn, the slowest pace in three years and well short of the 20% expected. Income beat, though, with EPS at $11.90 versus the $10.53 expected, excluding a EU fine of €1.7bn, which brought earnings down to $9.50 a share. Shares in Alphabet were down 7% in after-market trading having hit a record high earlier. The market may be punishing Alphabet just a little harshly when you consider the impact of FX headwinds in these numbers.

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