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OFFON

Romain Fournier

Chief Editor
Having worked in the British, French and Swiss financial press, Romain is able to report on local and international issues, as comfortable in French as in the language of Shakespeare, Romain Fournier leads the editorial team at Marketscreener. Fine connoisseur of the English-speaking markets, Romain delivers an editorial every day on US and UK markets.

Nasdaq takes a hit from Intel and Snap

10/22/2021 | 10:13am EST

Wall Street bounced back yesterday after a set of strong corporate results, easing concerns about inflation and supply-chain disruptions. Close to nine out of 10 U.S. earnings reports have topped Wall Street expectations, according to J.P. Morgan Asset Management. The mood was also boosted by the surprise interest payment from China Evergrande Group.

Yesterday, it was the technology sector that allowed the S&P500 to set its 55th record of the year. However, the Nasdaq is slightly down today after chipmaker Intel warned of lower profit margins, while Snap dropped after reporting a hit to digital advertising from privacy changes by Apple.

Snap, the well-known sharing app, has not yet earned a penny but weighs 120 billion dollars on the Nasdaq, the equivalent of the largest European bank HSBC. Well, weighed, because the share plunges 25% outside the US session after publishing results that bear the first scratches of the change in Apple's privacy policy. Recently, Facebook had already reported identical signals about its business. So did Twitter. This great battle for access to user data, to our data, is not new, but it is moving to new grounds. Apple is not particularly more virtuous than its compatriots: it is mainly that it has suddenly become less willing to share. Snap explains that it is now difficult to measure the impact of its campaigns, but thinks it can do something about it. The market is more perplexed.

To put it simply, as soon as we browse the web or download an application, we take a bunch of trackers with us on our devices, while leave a few doors to our daily lives wide open. The core of the business model of Facebook, Google and its peers, is to retrieve this data to make our digital identity card as complete as possible and give it the optimal market value to sell it to an advertiser.

Facebook and other digital players of this type make their money with this data, which is extremely profitable when it is accurate. In exchange, we have access to a whole range of convenient and inexpensive, even "free" services.

 

Economic highlights of the day:

The PMI indicators for the world's major economies for the month of October are back. Jerome Powell, the head of the Fed, is scheduled to participate in an event that may give him the opportunity to speak on monetary policy.

The dollar is trading at EUR 0.8590. The ounce of gold is rising above USD 1800. Oil rises to USD 85.5 for Brent and USD 83.5 for WTI. The yield on the 10-year T-Bond is down to 1.68% after reaching the symbolic 1.70% mark yesterday, while the Bund is stable at -0.1%. Bitcoin is trading around USD 61,200.

 

On markets:

* Snap reported below-expectations quarterly revenue on Thursday and warned that APPLE's data collection changes as well as supply chain issues would weigh on its advertising revenue. The stock falls 21% in pre-market trading. In after-hours trading Thursday FACEBOOK was down 6%, TWITTER down 7% and ALPHABET down 3%.

* Intel plunged 9% in after-hours trading Thursday after it reported lower-than-expected quarterly revenue and said it expects margins to decline in the coming years.

* Talks between Apple and battery makers CATL and BYD for its electric car project have essentially stalled, with the two Chinese groups refusing to partner with the U.S. giant and build factories in the U.S. for its sole use, three sources told Reuters. The iPhone maker is considering turning to Japanese battery makers, including Panasonic, the sources added.

* Chipotle Mexican Grill on Thursday reported better-than-expected quarterly same-store sales, helped by a return of diners and the success of a new smoked brisket menu.

* Mattel raised its full-year sales forecast Thursday night, as the toymaker showed confidence in its ability to overcome delivery-chain problems for the crucial holiday season. The stock was up 6% in after-hours trading.

* Negotiations between Western Digital and Japanese chipmaker Kioxia Holdings for a merger have stalled, two people familiar with the matter reported.

 

Analyst recommendations:

  • Ally Financial: Piper Sandler downgrades to neutral from overweight. PT up 11% to $59
  • CareTech: HSBC upgrades from buy to hold, targeting GBp 715.
  • Coterra Energy: Goldman Sachs upgrades to buy from neutral. PT up 20% to $25
  • Hays: HSBC upgraded from Hold to Buy, targeting GBp 195.
  • Knight-Swift Transportation: Stifel adjusts price target for to $70 from $66, maintains buy rating
  • Intel: UBS downgrades to neutral. PT up 3.6% to $58
  • International Business Machines Corporation: BofA Securities lowers price target for ibm to $172 from $176, maintains buy rating
  • Las Vegas Sands: JPMorgan adjusts price target to $36 from $38, maintains neutral rating
  • Lindsay: Stifel raised the recommendation to buy from hold. PT up 23% to $178
  • Marsh & McLennan: Raymond James upgrades to outperform from underperform. PT up 9.8% to $185.
  • Mercury Systems: RBC Capital Markets reinstated coverage of Mercury Systems Inc. with a recommendation of sector perform. PT set to $55
  • PPG Industries: J.P. Morgan downgrades to neutral from overweight. PT set to $165
  • Progress Software: J.P. Morgan initiated coverage of Progress Software Corp. with a recommendation of overweight. PT set to $60, implies a 18% increase from last price. Progress Software average PT is $58.75.
  • Southwestern Energy: Goldman Sachs reinstated coverage with a recommendation of neutral. PT set to $5.25
  • Spirit Aero: RBC Capital Markets reinstated coverage with a recommendation of outperform. PT rises 43% to $62
  • Superdry: Jefferies remains a Hold with a price target reduced from GBP 280 to GBP 265.
  • Tesla : BofA Securities lifts pt to $1,000 from $900 after 'solid' q3 results, reiterates neutral rating
  • Verizon Communications: Cowen adjusts pt to $71 from $68, maintains outperform rating

ę MarketScreener.com 2021
Stocks mentioned in the article
ChangeLast1st jan.
ALLY FINANCIAL INC. -3.10% 48.38 Delayed Quote.35.67%
APPLE INC. -3.17% 156.81 Delayed Quote.18.18%
CARETECH HOLDINGS PLC -0.35% 575 Delayed Quote.10.15%
CHIPOTLE MEXICAN GRILL, INC. -1.23% 1686.88 Delayed Quote.21.65%
COTERRA ENERGY INC. -0.43% 21 Delayed Quote.28.99%
HAYS PLC -4.55% 146.9 Delayed Quote.2.73%
INTEL CORPORATION -1.97% 48.78 Delayed Quote.-0.12%
INTERNATIONAL BUSINESS MACHINES CORPORATION -0.79% 115.81 Delayed Quote.-8.00%
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. -1.21% 57.39 Delayed Quote.37.23%
LAS VEGAS SANDS CORP. -5.35% 37.87 Delayed Quote.-36.46%
LINDSAY CORPORATION -5.42% 150.72 Delayed Quote.17.33%
MARSH & MCLENNAN COMPANIES, INC. -1.98% 166.41 Delayed Quote.42.23%
MATTEL, INC. -1.66% 21.97 Delayed Quote.25.90%
MERCURY SYSTEMS, INC. -3.23% 48.25 Delayed Quote.-45.21%
NASDAQ COMP. -2.23% 15491.656804 Real-time Quote.22.94%
PPG INDUSTRIES, INC. -1.99% 155.6 Delayed Quote.7.89%
PROGRESS SOFTWARE CORPORATION -3.86% 48.79 Delayed Quote.7.97%
S&P 500 -2.27% 4594.62 Delayed Quote.25.17%
SNAP INC. 0.20% 49.76 Delayed Quote.-0.62%
SOUTHWESTERN ENERGY COMPANY -0.20% 4.96 Delayed Quote.66.44%
SPIRIT AEROSYSTEMS HOLDINGS, INC. -8.36% 39.9 Delayed Quote.2.07%
SUPERDRY PLC -8.25% 261.5 Delayed Quote.6.04%
TESLA, INC. -3.05% 1081.92 Delayed Quote.53.32%
VERIZON COMMUNICATIONS 0.27% 51.8 Delayed Quote.-11.83%
WESTERN DIGITAL CORPORATION -3.52% 57.76 Delayed Quote.4.28%