Tech dented by earnings after S&P record


Traders brace for market swings while keeping watch on company margins, pricing power, and outlook
Newsfeed22 Oct 2021
    Photo credit: AFP Photo


    US

    US stocks rose to the first all-time high since 2 September, powered by a spate of strong corporate results and positive news on the fight against the virus.

    The mood soured after the cash session, when Snap Inc (SNAP US) plunged more than 25% after reporting results that missed estimates. The owner of the Snapchat app was weighed down by Apple Inc’s (AAPL US) new data collection restrictions and their effect on digital advertising measurements. The main exchange-traded fund tracking the Nasdaq 100 lost 0.6%, as other social media stocks slumped in afterhours.

    Intel (INTC US) also sank after reporting results, helping to overshadow a late-session rally that had lifted the S&P 500 Index for a seventh straight gain, the longest streak since July. Shares in stocks that benefit from a strong economy rallied after better-than-expected earnings. – Bloomberg News.

    Market-implied expectations for US inflation for the next half-decade have surged to the highest in 15 years as more investors have been losing faith in the Federal Reserve narrative that rising prices will be “transitory”.

    With stocks at highs, traders are braced for swings in the market while also keeping a close eye on company margins, pricing power, and outlooks.

    The S&P 500 gained 0.30% to 4,549.78. The Nasdaq Composite Index closed 0.62% higher at 15,215.70 and the Dow Jones Industrial Average closed little changed at 35,603.08.

     

    EUROPE

    UK natural gas production could get a much-needed increase from the start of two new North Sea projects, providing some relief to the region’s strained energy system.

    Even a small addition to the UK’s domestic output is good news for the country, where a supply crunch pushed gas and power prices to unprecedented highs. High energy costs are compounding concerns about inflation and adding to the rising overheads businesses across Europe are already shouldering for raw materials.

    UK gas output tumbled earlier this year amid heavy pipeline and field maintenance and as the pandemic forced companies to defer new projects.

    While the new fields provide some supply relief, longer-term prospects are unclear with new developments facing pressure amid climate debates. Earlier this month, Shell’s (RDSA LN) Jackdaw gas and condensate development failed to get required environmental approval from the UK regulator and is now weighing changes to the project. – Bloomberg News.

    The Stoxx Europe 600 Index closed little changed at 469.71 on Thursday (21 October).

     

    JAPAN

    Tokyo is set to roll back restrictions that limited the operating hours and alcohol service of bars and eateries from Monday (25 October), as coronavirus cases drop nationwide, and authorities look to open more parts of the economy.

    The Tokyo Metropolitan Government plans to formally lift the restrictions for restaurants and bars that meet its criteria for taking appropriate measures to limit the spread of infections, Kyodo News and other local media reported, citing unnamed officials.

    The move would have a widespread impact in Japan’s capital since about 85% of those establishments have already met the requirements, according to national public broadcaster NHK.

    The moves come as daily recorded Covid cases in Tokyo have dropped to double digits from 9 October after hitting over 5,000 several days in August during a wave powered by the delta variant.

    Japan at the end of September lifted a national virus emergency in place for Tokyo and 18 other areas, easing restrictions that have dragged on the economy. – Bloomberg News.

    The Nikkei 225 Index was 0.19% lower at 28,653.00 on Friday (22 October) after tumbling 1.87% to 28,708.58 the previous session.  

    The information published by DBS Bank Ltd. (company registration no.: 196800306E) (“DBS”) is for information only. It is based on information or opinions obtained from sources believed to be reliable (but which have not been independently verified by DBS, its related companies and affiliates (“DBS Group”)) and to the maximum extent permitted by law, DBS Group does not make any representation or warranty (express or implied) as to its accuracy, completeness, timeliness or correctness for any particular purpose. Opinions and estimates are subject to change without notice. The publication and distribution of the information does not constitute nor does it imply any form of endorsement by DBS Group of any person, entity, services or products described or appearing in the information. Any past performance, projection, forecast or simulation of results is not necessarily indicative of the future or likely performance of any investment or securities. Foreign exchange transactions involve risks. You should note that fluctuations in foreign exchange rates may result in losses. You may wish to seek your own independent financial, tax, or legal advice or make such independent investigations as you consider necessary or appropriate.

    The information published is not and does not constitute or form part of any offer, recommendation, invitation or solicitation to subscribe to or to enter into any transaction; nor is it calculated to invite, nor does it permit the making of offers to the public to subscribe to or enter into any transaction in any jurisdiction or country in which such offer, recommendation, invitation or solicitation is not authorised or to any person to whom it is unlawful to make such offer, recommendation, invitation or solicitation or where such offer, recommendation, invitation or solicitation would be contrary to law or regulation or which would subject DBS Group to any registration requirement within such jurisdiction or country, and should not be viewed as such. Without prejudice to the generality of the foregoing, the information, services or products described or appearing in the information are not specifically intended for or specifically targeted at the public in any specific jurisdiction.

    The information is the property of DBS and is protected by applicable intellectual property laws. No reproduction, transmission, sale, distribution, publication, broadcast, circulation, modification, dissemination, or commercial exploitation such information in any manner (including electronic, print or other media now known or hereafter developed) is permitted.

    DBS Group and its respective directors, officers and/or employees may have positions or other interests in, and may effect transactions in securities mentioned and may also perform or seek to perform broking, investment banking and other banking or financial services to any persons or entities mentioned.

    To the maximum extent permitted by law, DBS Group accepts no liability for any losses or damages (including direct, special, indirect, consequential, incidental or loss of profits) of any kind arising from or in connection with any reliance and/or use of the information (including any error, omission or misstatement, negligent or otherwise) or further communication, even if DBS Group has been advised of the possibility thereof.

    The information is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation. The information is distributed (a) in Singapore, by DBS Bank Ltd.; (b) in China, by DBS Bank (China) Ltd; (c) in Hong Kong, by DBS Bank (Hong Kong) Limited; (d) in Taiwan, by DBS Bank (Taiwan) Ltd; (e) in Indonesia, by PT DBS Indonesia; and (f) in India, by DBS Bank Ltd, Mumbai Branch.