Commodities
Nasdaq: the red Snap signal is lit before the rally
Published
2 weeks agoon
By
letizo News
Major U.S. stock indices closed on the third consecutive day of growth, but today this rally has a chance to break.
Although the capitalization of Snap (owner of the social network Snapchat) reached only $27 billion yesterday afternoon, after falling more than 5 times, the company has already twice brought down the stocks of corporations valued at hundreds of billions and even trillions of dollars. In May, the collapse was triggered by the announcement that Snap would not meet its revenue and earnings targets. Now the reason was the Q2 report, published after the end of the main trading session.
It was worse than even the downwardly revised forecasts. The loss per share was 2 cents, not one. Revenue fell to $1.11 billion versus an expected $1.14 billion.
Shares of Snap, along with other battered tech stocks, were among the leaders yesterday, adding 5.42% at the close. But within minutes of the report, they collapsed 27.83% on the post-market.
Snap attributed the results to weakening demand on its online advertising platform. It cited a tougher economy, an iOS update in 2021, and increased competition. The company said that even quite healthy businesses have been cutting back on its operations because of cost pressures from inflation. At the same time, it said it wasn’t giving third-quarter forecasts because it’s incredibly difficult to forecast right now.
The market habitually extrapolated this situation to other companies, as it did in May. In particular, this led to a drop in shares of Alphabet, which has a capitalization of more than $1.5 trillion, by almost 3%. Shares of other technological giants also plummeted.
Meanwhile, Thursday was the third straight day of gains for major U.S. indices. The S&P 500 rose 0.99%, the Dow Jones Industrial Average rose 0.51% and the Nasdaq Composite rose 1.36%. Some analysts were already expressing hope that the “bottom” of the market had passed. But the latest events make it doubtful.
In many respects, growth was connected with cases when the statements exceeded downward revised forecasts. But gradually their weight is diminishing. According to Refinitiv, on Tuesday, of the 48 S&P 500 companies that reported earnings, 89.2% exceeded forecasts. On Wednesday, after 60 reports, they were 78.3%. And yesterday morning, when 91 companies already reported, that share dropped to 78%.
Some disappointments turn out to be very noticeable, although they are not always related specifically to the Q2 results. For example, AT&T stock fell 7.6% yesterday after its annual cash flow forecast fell – the 3-month results beat expectations. Shares of American Airlines fell 7.4% due to an anticipated slowdown in growth. Carnival lost more than 11% after it announced it had placed an additional share issue. United Airlines, on the other hand, fell just below expectations, with its stock plummeting by more than 10%.
Nevertheless, the market was generally up yesterday. Today, it’s going to be more difficult. Snap isn’t the only one with bad surprises after the close of the main trading session.
Shares of toy maker Mattel fell 2.8% as it said its earnings were hurt by a sharp rise in the dollar. Capital One Financial lost 4.9% after disappointing results. Intuitive Surgical shares plummeted 12.6% for a similar reason. And Boston Beer also lost 8.4% due to a decline in its annual outlook.
At the same time, the impact of Snap on the quotes of other companies on Thursday evening expanded like circles on water. Social networks were falling. For example, Pinterest stock was losing more than 7 percent. Advertising and related technology companies were selling off. In particular, Trade Desk stock was down about 7%.
A lot of other companies, from Apple and Microsoft to Walmart and Target, also rode this wave, albeit not as badly (down within a percent). Futures on major U.S. indices went into the red zone. So Friday does not promise to be an easy day. But Twitter is just reporting today, and whether the fall will accelerate or slow down may be determined by this very company.
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Commodities
Price of gold falls on expectations of further US Federal Reserve rate hike
Published
3 hours agoon
August 8, 2022By
letizo News
Price of gold falls: the price of the precious metal on Monday morning slightly decreased on the prospects of further interest rate hikes by the U.S. Federal Reserve, according to trading data.
The December gold futures price on the New York Comex Exchange is down $2.75, or 0.15%, to $1,788.7 a troy ounce. September silver futures went up 0.24% to $19.89 an ounce.
The precious metals market showed a negative trend on Monday morning, fueled by expectations of further interest rate hikes by the U.S. Federal Reserve after the release of the country’s labor market data.
Thus, the unemployment rate in July fell to 3.5% from the June level of 3.6%, while the number of the employed in non-farm industries increased by 528,000. Analysts had expected the figure to remain at June’s level. The increase in nonfarm payrolls was forecast at 250,000.
“Support from geopolitical tensions “was countered by the resilience of the U.S. dollar after the release of a credible U.S. jobs report and hawkish comments from Fed officials,” Ravindra Rao, vice president of commodities at Kotak Securities, told Bloomberg news agency.
Commodities
Goldman Sachs oil price forecast 2022: Oil price forecast worsens in Q3 and Q4
Published
3 hours agoon
August 8, 2022By
letizo News
Current Goldman Sachs oil price forecast 2022: Analysts (NYSE:GS) believe another drop in Brent prices has been driven by low liquidity and growing multiple concerns, including the recession, China’s “zero tolerance” coronavirus policy and the country’s real estate sector, the release of strategic reserves in the US and Russia’s production recovery.
“We believe the possibility of higher oil prices remains high, even given all these negative factors, as the market is in a state of greater deficit than we have expected in recent months,” experts said.
Nevertheless, they worsened their forecasts for oil prices in the 3rd and 4th quarters of 2022 – to $110 and $125 per barrel, respectively, from $140 and $130 per barrel. The forecast for 2023 remained unchanged at $125/bbl.
The previous week the price of Brent had fallen by almost 9%; WTI had fallen by almost 10%. At the moment, futures are near the minimum marks for six months.
Commodities
Why is oil rising in price today after a decline last week
Published
3 hours agoon
August 8, 2022By
letizo News
Why is oil rising in price? The price of October futures on London’s ICE Futures Exchange for Brent amounted to $95.22 per barrel, which was $0.3 (0.32%) above the previous session’s closing price. At the end of previous trading these contracts grew by $0.8 (0.85%) up to $94.92 per barrel.
The price of WTI futures for September at electronic trades on the New York Mercantile Exchange (NYMEX) was $89.26 per barrel at that time, which was $0.25 (0.28%) above the final value of the previous session. By market close on Friday, the cost of these contracts grew by $0.47 (0.5%) up to $89.01 per barrel.
The previous week Brent had dropped almost 9% and WTI had fallen almost 10%. Currently, futures are near six-month lows.
The fall in Brent prices was caused by low liquidity and “a growing wave of concerns,” including the recession. China’s “zero tolerance” policy for the coronavirus, the release of strategic reserves in the U.S. and the recovery of production in Russia, experts wrote to Goldman Sachs (NYSE:GS).
They worsened their oil price forecasts for Q3 and Q4 2022 to $110 and $125 a barrel, respectively, from $140 and $130 a barrel. The 2023 forecast remained unchanged at $125 a barrel.
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