FILE PHOTO: A trader speaks to a floor official on the floor at the New York Stock Exchange (NYSE) in New York, U.S., April 23, 2019. REUTERS/Brendan McDermid
April 24, 2019
By Sruthi Shankar and Amy Caren Daniel
(Reuters) – Wall Street was set to open flat on Wednesday after a record-setting rally in the previous session, as investors assessed quarterly reports from industrial bellwethers Boeing and Caterpillar.
Boeing Co shares gained 1.5% in premarket trading even as the planemaker suspended its 2019 outlook and reported quarterly revenue below Wall Street estimates due to grounding of its 737 MAX jets. Its stock has lost 11.5% since the deadly Ethiopian crash in early March.
Caterpillar Inc fell 2.6%. The company topped analysts’ estimates for quarterly profit but posted a 4% decline in construction revenue in Asia-Pacific, one of its key markets dominated by China.
“Thus far you’ve had pretty strong reactions to earnings and investor sentiment is nervously positive,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.
“The nervousness has to do with valuations and the concern being, ‘Am I going to get good enough results and guidance to justify the markets going higher?’”
The main indexes are holding within a hair’s breadth of all-time highs after a rally this year, sparked by a dovish Federal Reserve, hopes of a U.S.-China trade resolution and an upbeat earnings season.
The benchmark S&P 500 index is just 0.25% away from its intra-day record high of 2,940.91 hit on Sept. 21.
About a third of the S&P 500 companies are expected to report this week, determining if investors should be concerned about the start of an earnings recession or whether back-to-back quarters of negative growth can be avoided.
Profits of S&P 500 companies are expected to decline 1.1% for the quarter, according to Refinitv data. However, 77.5% of the 129 companies that have reported so far have surpassed earnings estimates.
At 8:39 a.m. ET, Dow e-minis were up 15 points, or 0.06%. S&P 500 e-minis were down 1 points, or 0.03% and Nasdaq 100 e-minis were down 1.25 points, or 0.02%.
Microsoft Corp and Facebook Inc, set to report after the closing bell on Wednesday, were up more than 0.5%.
EBay Inc shares jumped 3.6% after the company raised its full-year sales and profit forecasts.
AT&T Inc shares declined 2.5% after the second-largest U.S. wireless carrier reported quarterly revenue below Wall Street estimates.
Anadarko Petroleum Corp shares jumped 11.4% after Occidental Petroleum Corp sought to scuttle Chevron Corp’s takeover of the company with a $57 billion bid. Occidental’s shares fell 5.2%.
(Reporting by Sruthi Shankar and Amy Caren Daniel in Bengaluru; Editing by Anil D’Silva)
FILE PHOTO: Ukrainian presidential candidate Volodymyr Zelenskiy waves to supporters following the announcement of the first exit poll in a presidential election at his campaign headquarters in Kiev, Ukraine April 21, 2019. REUTERS/Viacheslav Ratynskyi
April 24, 2019
By Pavel Polityuk
KIEV (Reuters) – Ukrainian President-elect Volodymyr Zelenskiy on Wednesday called on the government and state energy company Naftogaz to hold talks with the International Monetary Fund (IMF) on lowering household gas prices from May 1.
The IMF, which is helping Ukraine with a multi-billion dollar loan program, has said it wants to see gas prices set at their market level.
Zelenskiy, who has yet to take office but won a landslide election victory on Sunday, said in a statement on his team’s Facebook page he wanted prices to be lower.
“Let’s not just in words, but in deeds show that we can take decisions in people’s interests,” the statement said.
“For the past four months, gas prices in Europe have been decreasing and now the price of gas for the population in Ukraine is higher than the price of gas on the European market.”
The same statement warned that neighboring Russia might limit energy supplies to Ukraine from June 1, and that, from Jan. 1, Moscow might move to halt gas transit through Ukraine altogether, a move it said would result in significant financial losses and gas supply risks.
“These challenges require us to take effective and fast action,” the statement said.
An IMF spokesman was not immediately available to comment.
Prime Minister Volodymyr Groysman in March said he would urge the finance ministry and Naftogaz to start talks with the IMF to try to prevent any future rise in gas tariffs.
The government raised gas prices by nearly a quarter in October, allowing it to secure a new $3.9 billion stand-by aid agreement with the IMF.
According to a previously adopted government resolution, gas prices were due to rise by 15 percent from May 1. But earlier this week the government and Naftogaz agreed a slight decrease in tariffs.
Naftogaz said prices would fall by around 3.5 percent to 8,247 hryvnias ($310.56) per 1,000 cubic meters from May 1.
(Reporting by Pavel Polityuk; Writing by Andrew Osborn; Editing by Matthias Williams)
FILE PHOTO: Small toy figures are seen in front of a binary code in this illustration picture, April 8, 2019. REUTERS/Dado Ruvic//File Photo
April 24, 2019
By Joseph Menn
SAN FRANCISCO (Reuters) – Technology firms should do more to connect people in positive ways and steer away from trends that have tended to exploit human weaknesses, ethicists told a meeting of Silicon Valley leaders on Tuesday.
Tristan Harris and Aza Raskin are the co-founders of the nonprofit Center for Humane Technology and the ones who prompted Apple and Google to nudge phone users toward reducing their screen time.
Now they want companies and regulators to focus on reversing what they called “human downgrading,” which they see as at the root of a dozen worsening problems, by reconsidering the design and financial incentives of their systems.
Before a hand-picked crowd of about 300 technologists, philanthropists and others concerned with issues such as internet addiction, political polarization, and the spread of misinformation on the web, Harris said Silicon Valley was too focused on making computers surpass human strengths, rather than worrying about how they already exploit human weaknesses.
If that is not reversed, he said, “that could be the end of human agency,” or free will.
Problems include the spread of hate speech and conspiracy theories, propelled by financial incentives to keep users engaged alongside the use of powerful artificial intelligence on platforms like Alphabet Inc’s YouTube, Harris said.
YouTube and other companies have said they are cracking down on extremist speech and have removed advertising revenue-sharing from some categories of content.
Active Facebook communities can be a force for good but they also aid the dissemination of false information, the campaigners said. For example, a vocal fringe that oppose vaccines, believing contrary to scientific evidence that they cause autism, has led to an uptick in diseases that were nearly eradicated.
Facebook said in March it would reduce the distribution of content from groups promoting vaccine hoaxes.
In an interview after his speech, Harris said that what he has called a race to the bottom of the brainstem – manipulation of human instincts and emotions – could be reversed.
For example, he said that Apple and Google could reward app developers who help users, or Facebook could suggest that someone showing signs of depression call a friend who had previously been supportive.
Tech personalities attending included Apple Inc co-founder Steve Wozniak, early Facebook funder turned critic Roger McNamee and MoveOn founders Joan Blades and Wes Boyd. Tech money is also backing the Center, including charitable funds started by founders of Hewlett Packard, EBay, and Craigslist.
The big companies, Harris said, “can change the incentives.”
(Reporting by Joseph Menn; Editing by Greg Mitchell and Rosalba O’Brien)
FILE PHOTO: A woman stands in front of the logo of Snap Inc. on the floor of the New York Stock Exchange (NYSE) while waiting for Snap Inc. to post their IPO, in New York City, NY, U.S. March 2, 2017. REUTERS/Lucas Jackson
April 23, 2019
By Vibhuti Sharma and Sheila Dang
(Reuters) – Snap Inc’s original shows and rebuilt Android app helped it add Snapchat users for the first time in three quarters and beat analyst revenue expectations, but that was not enough to push its shares higher after a sharp run up this year.
Snap said the number of daily active Snapchat users rose to 190 million in the first quarter from 186 million in the prior period, but remained below the 191 million it had a year earlier.
The figure, widely watched by investors and advertisers, beat analysts’ average estimate of 187.2 million daily users, according to IBES data from Refinitiv.
Overall revenue jumped nearly 40 percent in the quarter from a year earlier as Snap was able to wring more ad revenue out of each user.
Executives left the company in droves late last year after a widely panned redesign of Snapchat, and any uptick is a welcome sign Snap has stemmed user losses.
Chief Executive Evan Spiegel has worked to turn Snap’s business around while the company largely avoid privacy and other scandals plaguing bigger rivals like Facebook Inc.
Snap did not give specific guidance on future user growth, but cautioned that growth rates tend to be higher in the first quarter versus the second quarter.
Shares of the company, which rose 12 percent immediately after the results, gave up most of their gains to trade up marginally at $12.08. They have more than doubled in value so far this year.
“Things are improving at Snap, and that could be putting it mildly – although with the shares up 100% so far this year, that’s pretty priced in,” said Nicholas Hyett, an analyst at Hargreaves Lansdown, in a note.
In an effort to increase how much time users spend on the app, Snap, which faces stiff competition from Facebook’s Instagram, launched more than 50 shows and publisher stories in international markets alone during the reported quarter.
It also rebuilt its Android app, which had more bugs and a worse user experience than its iOS app. Snap had prioritized development on the Apple ecosystem through its stock market debut in 2017.
Snap’s revenue, which it earns from selling advertising on the app, jumped 39 percent to $320.4 million and beat Wall Street’s average estimate of $306.6 million.
Revenue growth was helped by new ad formats like unskippable commercials on its original shows, which are housed on the Discover page, a panel on the app that contains publisher content along with influencer content.
“Snap is maintaining, which is a good place for them considering they still lack any clear direction on how to expand or pivot its app beyond the under 34-year-old demographic,” said Jessica Liu, a marketing analyst at Forrester.
Snap’s focus on privacy and communication between friends has helped it avoid problems with misinformation and the spread of abusive content, which have been an issue for Facebook and Google’s YouTube, two of Snap’s main rivals for digital ad dollars.
Average revenue per user jumped 39 percent to $1.68 during the quarter from a year earlier.
The company’s net loss narrowed to $310.4 million, or 23 cents per share, from $385.8 million, or 30 cents per share, a year earlier.
Excluding items, the company lost 10 cents per share in the quarter, beating analyst estimates of losses of 12 cents per share.
For the second quarter, Snap said it expects revenue of $335 million to $360 million. That compares with the average analyst estimate for revenue of $348.5 million, according to IBES data from Refinitiv.
Earlier this month, Snap launched a gaming platform within its Snapchat app featuring original and third-party games such as Zynga Inc’s Tiny Royale.
(This story corrects tenth paragraph to show Snap launched 50 shows and publisher stories in international markets, not that Snap launched 50 original shows).
(Reporting by Vibhuti Sharma in Bengaluru and Sheila Dang in New York; Editing by Arun Koyyur and Meredith Mazzilli)
FILE PHOTO: Facebook, Google and Twitter logos are seen in this combination photo from Reuters files. REUTERS//File Photo
April 23, 2019
By Foo Yun Chee
BRUSSELS (Reuters) – Google, Facebook and Twitter have to do more to tackle fake news ahead of key European Parliament elections next month, the European Commission said on Tuesday, as its latest report showed a lack of progress in some areas.
The monthly reports follow a pledge made by the tech giants and advertising trade bodies in October last year to combat the spread of fake news and avoid more heavy-handed regulations.
The EU has warned of foreign interference during campaigning for the European Parliament elections and national elections in Belgium, Denmark, Estonia, Finland, Greece, Poland, Portugal and Ukraine in recent and coming months.
“Further technical improvements as well as sharing of methodology and data sets for fake accounts are necessary to allow third-party experts, fact-checkers and researchers to carry out independent evaluation,” the EU executive said.
The Commission said Google had made insufficient progress in defining issue-based advertising. The report covered actions taken by the companies in March.
It said Facebook, which took down eight coordinated inauthentic behavior networks originating in North Macedonia, Kosovo and Russia, failed to disclose whether these affected EU users.
Twitter also fell short because it did not provide details on its measures against spam and fake accounts and also did not report on any action to improve the scrutiny of ad placements.
(Reporting by Foo Yun Chee; editing by Philip Blenkinsop)
FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, April 16, 2019. REUTERS/Staff
April 23, 2019
By Agamoni Ghosh and Medha Singh
(Reuters) – European shares fell on Tuesday as battery maker Umicore kicked off a busy week of earnings with a grim outlook and investors grew concerned about China cutting additional support to its economy, but a rally in oil and gas stocks helped temper losses.
The pan-European STOXX 600 index fell 0.3 percent by 0930 GMT after seven straight sessions of gains, with all major indices in the red except oil major-heavy London’s FTSE 100 which rose 0.4 percent.
Earnings started to roll in on a not-so-positive note with Umicore tumbling 16 percent, after the Belgian group warned revenue and earnings growth in 2020 will be lower than previous indications due to delays in the electric vehicle and energy storage markets.
Umicore’s slide weighed heavily on Belgium’s blue chip Bel 20 Index, pulling it 1.5 percent lower.
Car part suppliers Plastic Omnium and Faurecia also reported first quarter results. Plastic Omnium slid after warning of a decline in worldwide auto production, but Faurecia rose 1.5 percent after the company met its full-year target.
Belgium’s Melexis, which supplies semiconductor solutions for cars, slipped 6 percent after first quarter net income tumbled.
“We’re pausing for breadth ahead of a fairly busy week of earnings after a decent winning streak,” said Jasper Lawler, head of research at London Capital Group in London.
The banking index eased from six-month highs with major European banks as UBS, Credit Suisse and Barclays slated to report earnings late this week after last week’s mixed bag of results from big Wall Street banks.
“We’ve seen the likes of record profits from J.P. Morgan but nothing close in Europe. The numbers aren’t going to be great,” said Lawler.
Earnings numbers from some of the biggest S&P 500 companies, including Boeing Co, Amazon.com Inc and Facebook Inc, are also due this week.
Payments company Wirecard was among the biggest decliners after Germany’s markets regulator Bafin’s two-month ban on short-selling ended on Friday.
Ahold Delhaize slid after the Dutch supermarket warned that a strike at its Stop & Shop chain in U.S. would hurt its underlying 2019 profit margin, as it missed out on around $200 million on Easter week sales.
Renault fell 1.4 percent after Nissan Motor Co Ltd said it would reject a management integration proposal from its French partner and called for an equal capital relationship, according to a Nikkei report.
Also weighing on sentiment was Beijing’s indication to tone down its stimulus measures following unexpected signs of recovery from first-quarter economic data last week.
The oil and gas sector was among the lone bright spots with Royal Dutch Shell, British Petroleum and Total, up between 1.7 percent and 2 percent.
Oil prices were at 2019 highs on Tuesday after Washington announced all Iran sanction waivers would end by May, pressuring importers, mostly Asian, to stop buying from Tehran.
Surging oil prices, however, took a toll on airline stocks. Air France, EasyJet plc, Lufthansa and Ryanair , all shed between 2 percent and 4 percent.
Getinge was the top performer on the STOXX 600 after the Swedish medical technology company beat first quarter sales estimates and said restructuring measures will boost profit in the second half of the year.
Thomas Cook jumped 14 percent after a Sky News report that the world’s oldest tour operator was tentatively approached by several parties regarding a takeover of its tour operating division or the entire company.
(Reporting by Agamoni Ghosh and Medha Singh, Editing by William Maclean and Ed Osmond)