Gloomy Netflix forecast erases much of stock's pandemic gains

LOS ANGELES - Netflix Inc dashed hopes for a quick rebound after forecasting weak first-quarter subscriber growth on Thursday, sending shares sinking nearly 20 percent and wiping away most of its remaining pandemic-fueled gains from 2020.

The world's largest streaming service projected it would add 2.5 million customers from January through March, less than half of the 5.9 million analysts had forecast, according to Refinitiv IBES data.

Netflix tempered its growth expectations, citing the late arrival of anticipated content, such as the second season of "Bridgerton," and the film "The Adam Project."

Shares of Netflix plummeted nearly 20 percent to $408.13 in after-hours trading. Competitor Walt Disney Co, which has staked its future on building a strong streaming business, saw its shares sink 4%. Streaming device Roku Inc fell 5 percent.

Netflix added 8.3 million customers from October to December, when it released a heavy lineup of new programming including the star-studded movies "Red Notice" and "Don't Look Up" and a new season of "The Witcher." Industry analysts had projected 8.4 million.

The company's global subscriber total at the end of 2021 reached 221.8 million.

In a letter to shareholders, Netflix said it believed the ongoing COVID-19 pandemic and economic hardships in several parts of the world like Latin America may have kept subscriber growth from rebounding to levels seen before the pandemic.

The company posted adjusted earnings per share of $1.33, crushing analyst consensus estimates of 82 cents. Revenue hit $7.71 billion, in line with estimates.

Netflix last week raised prices in its biggest market, the United States and Canada, where analysts say growth is stagnating, and is now looking for growth overseas.

The company rode a roller coaster during the pandemic, with steep growth early in 2020 when people were staying home and movie theaters were closed, followed by a slowdown in 2021. Netflix picked up more than 36 million customers in 2020, and 18.2 million in 2021.

Netflix's subscriber growth in 2022 had been expected to stabilize and return to the pace logged before the pandemic, when it added 27.9 million subscribers in 2019, analysts say. The company's upcoming slate includes new installments of "Ozark" and "Stranger Things" and a three-part Kanye West documentary.

But competitors including Disney and AT&T Inc's HBO Max, are pouring billions into creating new programming to grab a share of the streaming market.

Netflix said added competition "may be affecting our marginal growth some," but added that it was still growing in every country where new streaming options have launched.

"Even in a world of uncertainty and increasing competition, we’re optimistic about our long-term growth prospects as streaming supplants linear entertainment around the world," Netflix said in its shareholder letter.

The company is looking for new ways to attract customers including with mobile video games. The company said it released 10 games in 2021, was pleased with the early reception and would expand its gaming portfolio in 2022.

-reuters

Cryptocurrency Omicron in frenzy over coronavirus variant

Trading in the cryptocurrency Omicron exploded Monday and its value gyrated after the World Health Organization decided to use that name for the latest variant of COVID-19.

Obscure and relatively stable in recent weeks, the virtual unit jumped to nearly $700 early Monday, about 10 times its previous value, according to the crypto news website CoinMarketCap.

It later fell to $152 before rebounding and stabilising at around $350. 

The WHO on Friday gave the name Omicron to the latest variant of the coronavirus to worry officials, following its policy to name them after letters in the Greek alphabet.

The cryptocurrency Omicron was created in early November, with its founders making no reference to COVID-19 at the launch. 

Instead, they expressed hope that it could conserve purchasing power independently of the market's volatility.

Omicron isn't the only virtual unit to benefit from notoriety from the real world, only to see the gains collapse.

The Squid coin, created by fans of the TV series, rose from $0.70 at its launch on October 21 to a peak of $2.86 on November 1. 

It fell to $0.003 the following day. Traders discovered they couldn't cash out their profits and the creators disappeared from social media.

Agence France-Presse

Bitcoin notches record high, day after US ETF debut

Bitcoin climbed to a record high on Wednesday, and the first US bitcoin futures-based exchange-traded fund (ETF) built on gains after a solid debut on Tuesday.

The world's leading cryptocurrency was up 3.30 percent at $66,364.72, after reaching a record of $67,016.50, topping the $64,895.22 hit on April 14 this year.

Tuesday was the first day of trading for the ProShares Bitcoin Strategy ETF - a development market participants say is likely to drive investment into the digital asset.

The ETF closed up 2.59 percent at $41.94 from its opening price of $40.88 on Tuesday and continued its ascent on Wednesday, last up 3.76 percent at $43.52.

The Valkyrie Bitcoin Strategy ETF, expected to debut on the Nasdaq Wednesday, appeared to be delayed after its prospectus was amended in a filing with the Securities and Exchange Commission. A person familiar with the matter said the Nasdaq expects the ETF to launch on Thursday, but that has not been confirmed yet.

Trading appeared to be dominated by smaller investors and high-frequency trading firms, analysts said, noting the absence of large block trades indicated that institutions were likely staying on the sidelines.

James Quinn, managing partner at Q9 Capital, a Hong Kong-based cryptocurrency private wealth manager, said the launch of the new product was "meaningful" for bitcoin.

Theoretically, any licensed brokerage firm in the United States that wants to take on this ETF can do so as easily as any other ETF, which "should make it available to a lot of folks," said Quinn.

While the ETF is based on bitcoin futures, Quinn said the trades and hedges underpinning the ETF mean activity will flow into the spot market and the bitcoin price.

Crypto ETFs have launched this year in Canada and Europe amid surging interest in digital assets. VanEck is also among fund managers pursuing US-listed ETF products, although Invesco on Monday dropped its plans for a futures-based ETF.

Ether, the world's No. 2 cryptocurrency, was up 3.63 percent on the day at $4,018.75, after hitting a high of $4,080, nearing its record high of $4,380 reached on May 12.

-reuters

Dow sinks 1,500 as virus cases rise, deflating optimism

Stocks are falling sharply on Wall Street as coronavirus cases increase again, deflating recent optimism that economy could recover quickly as lockdowns ease. The Dow fell more than 1,500 points and the S&P 500 was on track for its worst day in nearly three months. Many market watchers have been saying that a scorching comeback in the market since late March was overdone and didn’t reflect the dire state of the economy. A day earlier, the Federal Reserve said the road back to recovery would be long. Bond yields fell sharply, a sign of increasing caution among investors.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story is below:


Stocks are down sharply on Wall Street Thursday, pulling the Dow Jones Industrial Average more than 1,500 points lower and placing the S&P 500 on track for its worst day in nearly three months.

The S&P 500 was down 4.7% in afternoon trading, extending its losses into a third straight day. The benchmark index is now on track for its first weekly drop in four weeks.

The selling, which gained momentum as the day went on, comes as recent optimism that the reopening of businesses would drive a relatively quick economic recovery fades amid rising coronavirus cases in many U.S. states and countries.

The pullback marks a reversal for the market, which rallied 44.5% between late March and Monday, a scorching rate that many skeptics said was unsustainable and didn’t reflect the dire condition of the economy. Only a day ago the Nasdaq closed above the 10,000-point mark for the first time.

The Federal Reserve dimmed some of the optimism investors have had about a swift economic rebound Wednesday, warning that the road to recovery from the worst downturn in decades would be long. The central bank also said it doesn’t foresee a rate hike through 2022.

That, coupled with the recent run-up in stock prices, set the stage for the wave of selling Thursday, said Sal Bruno, chief investment officer at IndexIQ.

“It’s not surprising to see a bit of a sell-off, given the furious rally we’ve had coming out of the lows, despite the fact that the economy was not doing great,” Bruno said. “The fact that (the Fed) is talking about keeping interest rates this low through 2022 is a little eye-opening for a lot of folks.”

The Dow was down 1,512 points, or 5.6%, to 25,477. The Nasdaq composite, which was coming off an all-time high, slid 4%. Small company stocks continued to bear the brunt of the selling. The Russell 2000 index was down 5.9%. European and Asian markets also fell.


Nearly all of the companies in the S&P 500 were down. Technology, financial, industrial and health care stocks accounted for much of the market’s broad slide. Energy stocks were the biggest losers as crude oil prices fell sharply. Bond yields fell and the price of gold surged as worried investors shifted money into the traditional safe-haven assets.

Delta Air Lines, Boeing and MGM Resorts International were among the biggest decliners in the S&P 500. Each was down more than 11%.

Emergency rescue efforts by the Fed and Congress helped arrest the market’s staggering 34% skid in February and March. Since then, the market had been riding a wave of investor optimism that the economy will bounce back by the end of the year, if not sooner, as businesses reopen and people go back to work. But confidence in that scenario is waning as infections and fatalities continue to climb in the U.S. and elsewhere.

In the U.S., Texas and Florida were among the states reporting jumps in the number of coronavirus cases after precautions were relaxed last month. The total number of U.S. cases has now surpassed 2 million.

Still, investors are waiting for more data to see whether the spike in COVID-19 cases are a sign of a possible second wave of the infection, said Charlie Ripley, senior investment strategist for Allianz Investment Management.

He’s focusing on updates to job numbers and consumer spending to gauge how well the economy is recovering.

“We think the recovery is largely underway, but there is still some considerable uncertainty on the path we have ahead,” Ripley said. “If we see some more follow-on of people coming back to work and consumer sentiment picking up, that will be a positive sign for a faster recovery.”

Anxious investors shifted more money into government bonds Thursday, sending yields broadly lower. The yield on the 10-year Treasury yield slid to 0.67% from 0.74% late Wednesday, a big move. Last Friday it briefly moved above 0.90%.

Gold for August delivery climbed 1.2% to $1,740.60 an ounce.

Oil prices fell sharply. Benchmark U.S. crude oil for July delivery was down 8.4% at $36.26 a barrel. Brent crude oil for August delivery was off 7.8% at $38.48 a barrel.

Markets in Europe were broadly lower. France’s CAC 40 slid 4.7% and Germany’s DAX dropped 4.5%. Britain’s FTSE 100 fell 4%. Stock markets in Asia closed lower.

The Labor Department said Thursday that about 1.5 million people applied for U.S. unemployment benefits last week, another sign that many Americans are still losing their jobs even as the economy begins to gradually reopen. The latest figure marked the 10th straight weekly decline in applications for jobless aid since they peaked in mid-March when the coronavirus hit hard. Still, the pace of layoffs remains historically high.

Other jobs data have been more encouraging. A report on Friday showed that the U.S. job market surprisingly strengthened last month as employers added 2.5 million workers to their payrolls. Economists had been expecting them instead to slash another 8 million jobs.

That report helped stoke optimism among investors that the economy can climb out of its current hole faster than forecast. But the Fed estimated Wednesday that the economy will shrink 6.5% this year, in line with other forecasts, before expanding 5% in 2021. It also expects the unemployment rate at 9.3%, near the peak of the last recession, by the end of this year. The rate is now 13.3%.

The central bank said it would keep providing support to the economy by buying bonds to maintain low borrowing rates and forecast no rate hike through 2022, which could make it easier for consumers and businesses to borrow and spend enough to sustain an economy depressed by business shutdowns and high unemployment.

The Associated Press 

Stocks close weaker as traders turn to US markets

MANILA, Philippines — The stock market closed the week on a sour note behind recent developments in the US political landscape.

The Philippine Stock Exchange index fell 0.97 percent or 77.26 points to finish at 7,819.22 on Friday.

The broader All Shares index likewise lost 0.85 percent or 40.53 points to settle at 4,728.81.

“Shares slid as traders monitored the latest trade developments and assessed a whistle-blower complaint against President Donald Trump that was released,” said Regina Capital’s Luis Limlingan.

Limlingan said positive statement on China-US trade talk, however, was able to limit losses in the overnight markets.

Local counters were covered in red, with mining and oil being the biggest casualty with a 2.62 percent or 241-point drop. Holding and property counters fell by more than one percent each.

Net foreign selling amounted to P464 million.

Market breadth was negative as decliners pummeled advancers, 133 to 57, while 43 stocks did not change. Value turnover stood at P5.93 billion.

“While we remain a buy on the index, we’ve been flagging the past few days that we would prefer to wait near its recent lows at the 7,620 level. With a lack of catalysts in the local scene in the near-term, movement could likely be dictated by US market movement and foreign flows,” Gabriel Perez of Papa Securities said.

source: philstar.com

Index ends lower on weak GDP growth, US-China trade woes

MANILA, Philippines — The index ended the week in negative zone, finishing 13.42 points lower at 7,742.20.

Likewise, the broader All Shares gauge was down 16.59 points or 0.34 percent to end at 4,791.26.

Majority of the indices were down as well except for the financials and industrial gauges which ended in positive territory.

Total value turnover reached P7.551 billion. Market breadth was negative, 101 to 78 while 64 issues were unchanged.

Traders said the market is still digesting the lower-than-expected first quarter economic growth of 5.6 percent as well as the lack of resolution on the brewing US-China trade war.


Some specific issues, however, bucked the trend such as Holcim Philippines whose shares reached a new high of P15.30 or up 6.10 percent.

This after San Miguel Corp., Holcim Philippines and Lafarge Holcim confirmed the acquisition by San Miguel of Holcim Philippines.

Lafarge Holcim, Europe’s biggest cement maker, sold its 85.7 percent stake in the company.

Lafarge Holcim CEO Jan Jenish said the sale of the company’s stake in Holcim Philippines now completes the cement giant’s exit from Southeast Asia.

“With the divestment of our activities in the Philippines, we are completing our exit from the increasingly hyper competitive arena in South East Asia. While this decision is based on our strategic portfolio review, we have reached very attractive valuations allowing us to achieve a new level of financial strength,” Jenish said.

On the other hand, SMC’s shares dropped 2.81 percent.

source: philstar.com

Psei down in morning trade as investors digest Luzon quake aftermath

MANILA, Philippines — Philippine shares were in the red at the end of the morning trade Tuesday as investors digest the aftermath of a magnitude 6.1 earthquake that struck Luzon on Monday.

As of market recess Tuesday, the bellwether Philippine Stock Exchange index was down 0.72% or 55.97 points to 7,776.46. The broader All Shares index was also in the negative territory, down 0.41% or 19.75 points to 4,814.93.

“Investors may remain on the sidelines as they gather more information regarding the aftermath of last night's earthquake. If there's any indication, Philippine iShares were slightly down -0.61% to 34.46,” Luis Limlingan of Regina Capital said in a market commentary.


Authorities say that as of mid-morning on Monday, 11 people have been confirmed dead in the aftermath of the earthquake.

The quake — which was tectonic in origin — hit Castillejos, Zambales at around 5:11 p.m. Monday. The Philippine Institute of Volcanology and Seismology earlier recorded a magnitude 5.7 quake before revising it to magnitude 6.1.

A total of 447 aftershocks were recorded as of 10 a.m. Tuesday following the tremor that hit Luzon and swayed buildings in Metro Manila.

‘Cautious’

Stocks were generally lower in Asian trade on Tuesday as investors move cautiously ahead of a deluge of corporate results later in the week.

Tokyo stocks were trading down with profit-taking before 10 days of holidays in Japan weighing on the market.

With many markets opening after an extended Easter break, Hong Kong Shanghai, Taiwan, Singapore were all down, while Australia and Seoul were trading up.

"Some of the world's biggest technology companies are reporting earnings this week as well as a raft of the big European banks," Nick Twidale, chief operating officer at Rakuten Securities Australia, said in a note to clients.

"Investors will be hoping for some better-than-expected results from both groups to keep the topside momentum in global equities, however if the data starts to show a significant slowing across these key industries then expect both stocks and risk trades to start to come under some heavy pressure."

Major earnings releases expected this week include Amazon, Facebook, Microsoft, Exxon Mobil and auto maker Tesla.

Aerospace giant Boeing will report earnings on Wednesday for the first time since a deadly March 10 plane crash plunged the company into crisis-mode. — Ian Nicolas Cigaral with AFP

source: philstar.com

Market may trade sideways this week

MANILA, Philippines — The stock market this week may be characterised by follow through buying on Chinese New Year ahead of the release of the January inflation numbers, according to First Metro Investment Corp. vice president Cristina Ulang.

Ulang said investors would closely monitor the corporate earnings report, noting that outperformance versus estimates would hold the key to sustained foreign buying.

Christopher Mangun, head of Eagle Equities, said that there may be lower trading volumes this week.


“This week is the first trading week of February and with only four days of trading we are going to see lower trading volumes as the holiday is in the middle of week and investors may take a break from trading and take the week off,” he said

Thus, he said the market may continue to trade sideways between 8,000 and 8,200.

“The index may end the week lower, but the key is for it to stay above the 8,000 level. If we continue to see heavy foreign inflows, then the market may sustain its current momentum. Local investors have started taking some risk off the table and currently foreign money is supporting the market. With earnings reports set to start coming in this week on top of better inflation numbers for January, we may see the market factor this is and maintain its current trajectory,” he said.

Last week, the market was pulled up by rosy western equities markets which rose after dovish comments from the US Fed.

The main index ended the week 90.96 points higher or 1.13 percent to close at 8,144.16.

In the first three days of trading, there was a pullback, even touching the 7,900 support level.

However, in the last two trading days there was already  a complete reversal, eventually breaking above 8,100 in the afternoon trading session on Friday, Mangun said.

Foreign money flooded the market with net foreign buying at P5.74 billion.

In all, the PSEi ends the month of January 7.3 percent higher which is the market’s best performance since March 2016.

source: philstar.com

Asian stocks mixed as weak dollar weighs on US economic data

SINGAPORE — Asian markets were mixed Thursday as positive sentiment from U.S. economic data and the country's willingness to strike a trade deal with Canada was shaken by a weaker dollar.

KEEPING SCORE: Japan's benchmark Nikkei 225 added 0.2 percent to 22,883.64 and the Kospi in South Korea gained 0.3 percent to 2,316.35. Hong Kong's Hang Seng was 0.4 percent lower at 28,297.41. The Shanghai Composite index fell 0.6 percent to 2,752.13. Australia's S&P/ASX 200 rose 0.3 percent to 6,369.00.



WALL STREET: Gains by big technology companies and Amazon took U.S. indexes higher on Wednesday. Stocks have rallied for four days as investors grew more hopeful about trade talks between the U.S., Mexico and Canada. The S&P 500 index closed 0.6 percent higher at 2,914.04, a record high. The Dow Jones Industrial Average rose 0.2 percent to 26,124.57 and the Nasdaq composite jumped 1 percent to a record 8,109.69. The Russell 2000 index of smaller-company stocks climbed 0.4 percent to 1,734.75.

U.S ECONOMY GROWS: The U.S. economy grew at a strong 4.2 percent annual rate in the April-June quarter, the best showing in nearly four years, the Commerce Department said Wednesday. Strength in business investment offset slightly slower consumer spending, placing growth on track to produce the country's strongest full-year gain in more than a decade. Economists expect growth to slow to a still-solid 3 percent annual rate the rest of the year, resulting in full-year growth of 3 percent for 2018.

POSSIBLE TRADE DEAL: President Donald Trump has said that efforts to reach a deal with Canada in the new North American Free Trade Agreement were "probably on track". The longtime U.S. ally and the country's second-largest trading partner after China had been left out of talks for the past five weeks. Canada has until Friday to reach a deal. Canadian Prime Minister Justin Trudeau said there was a "possibility of getting to a good deal for Canada" by Trump's deadline but said the country will not sign a bad agreement. Mexico, long the target of Trump's ire, has cut a preliminary deal with the United States to replace NAFTA with a pact that's meant, among other things, to shift more manufacturing into the United States.


ANALYST'S TAKE: "The positive impulse seen in the U.S. market has not flown through to Asia. Weakness of the dollar has reversed sentiment in the markets overnight," Michael McCarthy, chief market strategist at CMC Markets in Sydney, said in an interview.

ENERGY: Oil prices have extended their gains on concerns that looming sanctions on Iran may cause supply to drop. Benchmark U.S. crude added 13 cents to $69.64 per barrel in electronic trading on the New York Mercantile Exchange. The contract edged 1.4 percent higher and closed Wednesday at $69.51. Brent crude, used to price international oils, gained 12 cents to $77.58 in London.

CURRENCIES: The dollar eased to 111.63 yen from 111.69 yen. The euro advanced to $1.1703 from $1.1699.

source: philstar.com

Trump flips on trade pact, weighs rejoining Pacific-Rim deal

WASHINGTON — In a striking reversal, President Donald Trump has asked trade officials to explore the possibility of the United States rejoining the Trans-Pacific Partnership agreement, a free trade deal he pulled out of during his first days in office as part of his "America first" agenda.

Trump's request comes as he faces pressure from farm-state Republicans anxious that his protectionist trade policies could spiral into a trade war with China that would hit rural America. Trump spent the 2016 presidential campaign ripping into the multi-national pact, saying he could get a better deal for U.S. businesses by negotiating one-on-one with countries in the Pacific Rim. Now, faced with political consequences of the action, Trump appears to be reconsidering.

"Last year, the president kept his promise to end the TPP deal negotiated by the Obama Administration because it was unfair to American workers and farmers," the White House said in a statement. The president assigned his top trade advisers, U.S. Trade Representative Robert Lighthizer and his new chief economic adviser, Larry Kudlow, "to take another look at whether or not a better deal could be negotiated."

Trump first disclosed his request Thursday to a group of lawmakers at a White House meeting on trade. Lawmakers have been pressing Trump to shift course after escalating trade threats, including China's plan to slap tariffs on soybeans and other U.S. crops.

The apparent decision comes after the 11 other TPP countries went ahead last month and signed the pact in Santiago, Chile — without the United States. The agreement is meant to establish freer trade in the Asia-Pacific region and put pressure on China to open its markets to compete with and perhaps eventually join the bloc.

It was not immediately clear how committed Trump was to embarking on a new path of potentially thorny negotiations. Trump frequently equivocates on policy when faced with opposition, only to reverse course later.

"I'm sure there are lots of particulars that they'd want to negotiate, but the president multiple times reaffirmed in general to all of us and looked right at Larry Kudlow and said, 'Larry, go get it done,'" said Sen. Ben Sasse, R-Neb., who attended the meeting.

The president has mused publicly about rejoining the deal before, suggesting he would re-enter if he could negotiate more favorable terms. He has not said precisely what provisions he would want changed.

It's unclear how willing the other 11 countries would be to reopen the agreement and make concessions to lure the United States back, though its economic power would likely be an appeal.

"If the Trump administration doesn't pose too many demands, it is likely that the other TPP members will see the value of the bringing the U.S. back into the fold," said Eswar Prasad, Cornell University professor of trade policy. "Undoubtedly, a TPP that includes the U.S. would be stronger and more formidable than one that does not."

Lawmakers on Capitol Hill have been renewing their pitches for TPP — rather than Trump's threats of steep tariffs on steel and other products — as a way to counter China on trade. Sen Ron Johnson, R-Wis., was among a handful of senators who recently visited China to meet with government and business leaders there. He said it's time to work with a coalition of trading partners to increase pressure on China.

"I have to believe President Xi is smiling all the way to regional domination as a result of our pulling out of TPP. I don't think we can get back into the TPP soon enough," Johnson said when talking to reporters about the trip.

Meanwhile, administration officials are escalating their pressure campaign against China. Kudlow said last week the U.S. may soon release a list of products that would be subject to the new tariffs Trump has threatened to slap on $100 billion in Chinese goods. And the U.S. Treasury is working on plans to restrict Chinese technology investments in the United States.

Public Citizen's Global Trade Watch, which was highly critical of U.S. involvement in a pact it viewed as lowering labor and environmental standards, said Trump's reversal on the issue would signal that the president "cannot be trusted on anything," said Lori Wallach, the group's director.

The U.S. International Trade Commission, an independent federal agency, has projected in 2016 that TPP would increase economic growth and create jobs, but the gains would be small: After 15 years, the deal would add just 128,000 jobs, an increase of less than a tenth of 1 percent. Exports would increase, but imports would increase more. Agriculture and the business services industry would see gains, but manufacturing output and employment would decrease slightly under TPP.

In the meeting with farm state lawmakers, Trump also suggested the possibility of directing the Environmental Protection Agency to allow year-round sales of renewable fuel with blends of 15 percent ethanol.

The EPA currently bans the 15-percent blend, called E15, during the summer because of concerns that it contributes to smog on hot days. Gasoline typically contains 10 percent ethanol. Farm state lawmakers have pushed for greater sales of the higher ethanol blend to boost demand for the corn-based fuel.

North Dakota Gov. Doug Burgum said Trump made some "pretty positive statements" about allowing the year-round use of E-15 ethanol, which could help corn growers.

The White House meetings came as an array of business executives and trade groups expressed concerns at a congressional hearing about the impact that tariffs will have on their business. Still, there were some supporters, too.

"Withdrawing the threat of tariffs without achieving results would be tantamount to waiving the white flag of trade surrender," said Scott Paul, president of the Alliance for American Manufacturing.

__

Associated Press writers Catherine Lucey, Jill Colvin, Paul Wiseman and Matthew Daly in Washington and James MacPherson in Bismarck, North Dakota, contributed.

source: philstar.com

Wall Street Week Ahead: Short week, jobs data may bring back swings

NEW YORK - Wall Street may kick off the second half of the year with an uptick in volatility, thanks to the June jobs report and plenty of other market-moving data in a short trading week.

Financial markets will be closed on Friday for Independence Day. So Thursday will bring a blitz of numbers: the nonfarm payroll figures for June, the May trade deficit and the June index on the services sector from the Institute for Supply Management. On Wednesday, U.S. Federal Reserve Chair Janet Yellen is scheduled to speak on financial stability at an International Monetary Fund conference in Washington.

The elevated volatility would shake some traders out of a stupor. They have been limited in their betting by this market, which has been resilient but boring: The S&P 500 has not had a weekly swing of more than 2 percent since mid-April.

"It has been a very frustrating few months in the market for both long-term and short-term traders. It is very tough to outperform in this environment," said Sam Ginzburg, head of trading at First New York Securities in New York.

The S&P 500 has scored 22 record closing highs for the first half of 2014, feeding concerns about a technical pullback. Yet the CBOE Volatility Index, Wall Street's fear gauge, has hovered near multi-year lows, reflecting a market that seemed to grind higher no matter what was thrown at it.

"Markets will probably trade sideways or lower until the VIX gets to a higher level, where it can support some kind of (a meaningful) advance," said Donald Selkin, chief market strategist at National Securities in New York, which has about $3 billion in assets under management.

The VIX is trading around 11, or about half of its long-term average of about 20. While no one would want to relive the financial crisis when the VIX jumped to 89.53 on Oct. 24, 2008, a modest amount of volatility is welcome on Wall Street.

A higher VIX creates valuation imbalances that drive stock picks and boost trading volume, which has collapsed from more than 8 billion shares a day in 2007 to an average of about 5 billion now.

For long-term investors, though, Wall Street is wrapping up a good first half of the year. The S&P 500 has climbed 6.1 percent this year, following a jump of 30 percent in 2013.

A recent Reuters poll showed market participants expect the benchmark index to hit 2,000 for the first time before the year ends, which is a gain of about 8.2 percent from 2013.

If the market closed the year at current levels, it would mark the best three-year run for U.S. stocks since the 1997-1999 period.

source: interaksyon.com

Wall Street falls as China data trigger selloff in risky assets

NEW YORK - U.S. stocks fell on Thursday, with the Dow Jones industrial average recording its third consecutive day of losses, as risky assets sold off in wake of disappointing manufacturing data in China.

Financials and materials stocks were the day's biggest losers while telecom services was the only positive sector as investors sold growth-oriented stocks and bought defensive ones. Trading volume was heavier than in recent sessions.

The market sentiment was dented by a report on manufacturing in China which showed a mild slowdown at the end of 2013 in the world's second-largest economy had continued into the new year.

U.S.-traded Chinese stocks were down sharply after a U.S. Securities and Exchange Commission judge ruled that the Chinese units of the world's top accounting firms should be suspended from auditing those companies.

Among the biggest losers were Internet services provider Baidu Inc, down 6.2 percent, and SINA Corp, down 5.9 percent, on heavier-than-usual volume. The U.S. shares of Petrochina, the country's largest stock by market value, fell 3.1 percent.

The CBOE Volatility index VIX often used as a fear gauge on Wall Street, closed up 7.2 percent at 13.77 after rising more than 11 percent earlier.

"The day's panic was largely associated with China and I think it's a temporary reaction," said Randy Frederick, managing director of active trading and derivatives at Charles Schwab in Austin, Texas.

"If we have good corporate earnings from a couple of big names or good economic reports, I think we will be right back up to where we were a couple days ago."

The Dow Jones industrial average fell 175.99 points or 1.07 percent, to 16,197.35, the S&P 500 lost 16.4 points or 0.89 percent, to 1,828.46 and the Nasdaq Composite dropped 24.126 points or 0.57 percent, to 4,218.875.

Trading volume was higher than usual with 7.4 billion shares traded on all U.S. platforms compared to a five-day average of 6.7 billion shares, according to BATS exchange data. Both on the NYSE and Nasdaq, decliners beat advancers by a ratio of about 2 to 1.

After the bell, Microsoft Corp said fiscal second-quarter profit rose 3 percent, as strong sales of its Office software to businesses offset another weak quarter for its flagship Windows system, and as consumers increasingly favor tablets over personal computers. The stock rose 3.7 percent in extended trade.

Starbucks Corp's sales at established stores in its U.S.-dominated Americas region cooled more than analysts expected in its latest quarter as consumers spent more time holiday shopping online than at physical stores. The stock rose 1 percent in extended trade.

Apple Inc rose 0.8 percent to $556.18. Activist investor Carl Icahn picked up another $500 million of Apple shares, taking the billionaire's total investment in the iPhone maker to $3.6 billion.

In other earnings, McDonald's Corp reported weaker-than-expected revenue as fewer customers ate at its restaurants. Shares rebounded from earlier losses to close up 0.5 percent to $95.32.

Netflix Inc shares surged 16.5 percent to $388.72 as the best performer on the S&P 500. The world's largest video-streaming company said Wednesday it added more than 2.3 million U.S. customers in the fourth quarter.

Shares of Herbalife fell 10.3 percent to $65.92 in heavy volume after Massachusetts Senator Edward Markey asked for more information about its business practices. The nutrition company has been accused by prominent hedge fund manager William Ackman of running a pyramid scheme.

Thomson Reuters data through Thursday morning shows earnings for the fourth quarter are expected to grow 7 percent. Of the 102 companies in the benchmark that have reported, 63 percent beat expectations, in line with the long-term average.

source: interaksyon.com

Discovery World dives on stock market debut after 'Yolanda' triggers cancellations

Shares of Discovery World Corp fell sharply on its trading debut today, mirroring the weakness in the broader market.

Shares of the luxury resort developer dropped 11.59 percent to a session low of P2.90 per share from its listing price of P3.28 apiece. The stock price did not break past its listing price throughout the session.

"I guess it's a case of bad timing. People were cutting exposure on equities. Discovery World was no exception," said Jose Vistan of AB Capital Securities Inc.

The Philippine Stock Exchange index was down 32.45 points or 0.53 percent to close at 6,122.89 today.

On the sidelines of its listing ceremony, Discovery World president John Y. Tiu told reporters that the company expects the onslaught of Typhoon 'Yolanda' to make a slight dent on sales and profit.

"Calamities will always happen. We believe strongly in the growth of the Philippine tourism industry. While the country is currently experiencing some slowness in growth because of the typhoon, we believe moving forward, the prospects for the tourism industry is extremely bright," Tiu said.

Discovery Shores Boracay experienced "minimal" cancellations at the peak of the typhoon's onslaught, but its waiting list of clients can "more than absorb" the cancellations, Tiu said.

Discovery World was forced to shut down operations of newly acquired Club Paradise in Coron, Palawan. The renovation of the resort will be finished in a month just in time for the peak season, Tiu said.

"There might be a slight reduction in revenues. We expect some cancellations from guests because of the initial impact of ‘Yolanda.’ In the medium term, we don't see any effect as long as we get the generators online," he said, adding that facilities at Club Paradise are insured.

Discovery World is purchasing more generator sets to support the close to 1-megawatt requirement of Discovery Shores Boracay. The firm's reliance on gensets will hike its power costs by about 15-20 percent, Tiu said.

"In Boracay, the main issue there is the power situation. We have over 150 percent back-up power and we're purchasing generators to make sure we have continuous power that's why we're fully operational," he said.

"About 12-15 hours would be tapped to the grid then we use the gensets for the balance of 12 or 19 hours that's left," he said.

Discovery World may spend as much as P1 billion to expand Club Paradise and Discovery Shores. It plans to start developing the beach properties owned by Palawan Cove Corp in San Vicente, Palawan next year -- a venture that has been delayed following the acquisition of Club Paradise.

Discovery World, the eighth company to go public this year, raised P551 million from the public offering of 168 million shares.

Net proceeds of P516.46 million from the share sale will be used to retire debts incurred for the acquisition of Club Paradise and to bankroll investments in Palawan Cove and in Discovery Fleet Corp, which offers full diving and non-diving programs.

The company plans to start the development of the San Vicente property next year. It has been delayed following the acquisition of Club Paradise.

Discovery World doubled its net income to P30.53 million in the first half from P15.59 billion in the same period last year following a slight uptick in revenues and lower operating expenses.

source: interaksyon.com

Wall Street rises as jobs data supports US Fed policy

NEW YORK - U.S. stocks climbed on Tuesday, pushing the S&P 500 to yet another record high, after weaker-than-expected job creation last month reinforced expectations the Federal Reserve will hold the course on its economic stimulus into next year.



U.S. employers added 148,000 workers last month, well below the 180,000 economists had expected. The data was seen as supporting the Fed's decision to maintain its $85 billion in monthly bond purchases, which has been a major factor in the S&P 500's 2013 rally of 23 percent.



Many economists now think the Fed will refrain from scaling back its easy money policy, which has kept borrowing costs low, until next year. The central bank surprised market participants in September when it held off on any plans to trim its stimulus.



"Another soft report on the employment numbers just continues to lead us to believe the Fed will be with us at the holiday table this year with their full $85 billion and ringing in the New Year probably at that rate as well, which the markets like," said Darrell Cronk, regional chief investment officer at Wells Fargo Private Bank in New York.



But gains were limited on the Nasdaq after some of the year's biggest winners, including Netflix Inc, reversed course to move lower.



"This is a horrible one-day reversal, taking out yesterday's action. We saw both higher highs and lower lows today, which is proof the stock is exhausted," said Frank Gretz, market analyst and technician for brokerage Shields & Co in New York.



Netflix shares fell 9 percent to $323.12, giving back gains that followed the release of the company's earnings report on Monday. With more than 17 million shares traded, volume was nearly eight times the average over the last 50 days.



Apple edged down 0.3 percent to $519.87, though losses ebbed after the company unveiled a new line of iPads.



The Dow Jones industrial average rose 75.46 points or 0.49 percent, to 15,467.66, the S&P 500 gained 10.01 points or 0.57 percent, to 1,754.67 and the Nasdaq Composite  added 9.517 points or 0.24 percent, to 3,929.566.



The gains marked the fourth straight record close for the benchmark S&P index.



Consumer staples, up 1.4 percent, was among the best performing S&P sectors, boosted by a 4.2 gain in Kimberly-Clark Corp to $102.97 after the maker of Kleenex tissues posted bigger-than-anticipated quarterly profit.



Transocean shares rose 6 percent to $49.35 after S&P Dow Jones Indices announced the drilling services company will replace Dell on the S&P 500 index after the close of trading next Monday.



Shares of cloud software maker VMware Inc rose 2.8 percent to $85 a day after it reported a higher-than-expected profit.



According to Thomson Reuters data through Tuesday morning, of the 128 companies in the S&P 500 that have reported earnings, 63.3 percent have topped analysts' expectations, roughly in line with the beat rate since 1994 but below the 66 percent rate over the past four quarters.



On a revenue basis, 52.3 percent of companies in the S&P 500 that have reported results have beaten Wall Street expectations, short of the 61 percent beat rate since 2002 but slightly above the 49 percent rate over the past four quarters.



Advancing stocks outnumbered declining ones on the NYSE by 2,210 to 805, while on the Nasdaq, advancers beat decliners 1,397 to 1,148.

source: interaksyon.com

PH stock market takes cue from Wall Street, returns above 6,300-mark

MANILA - The Philippine benchmark index surged on Wednesday to return above the 6,300 mark on expectations that the US government shutdown will end soon and have a minimal impact on the world's biggest economy.

At the Philippine Stock Exchange, the bellwether index shot up 164.42 points or 2.65 percent to close at 6,362.26. All indices rallied by at least a percent led by the 3.09 percent advance of the holding firm counter.

Advancers outnumbered decliners, 99 to 46, while 40 issues were unchanged. A total of 1.3 billion stocks worth P8.23 billion changed hands.

Actively traded stocks were Universal Robina, Metrobank, Ayala Corp, PLDT and Alliance Global. Top gainers were Chemphil, TKC Steel and Bogo-Medellin, while the biggest losers were Maybank, A Brown and 2GO.

"There's some sort of relief in the Philippines after seeing the reaction of US markets overnight to the spending bill not being passed," said April Lee-Tan, head of research at COL Financial Group Inc.

"Given that in the US, the market did not react negatively, the perception is that this will not be a problem or the shutdown will not take a long time," she added.

Overnight, the Dow Jones industrial Average jumped 62.03 points, or 0.4 percent, to 15,191.70 despite the failure of US lawmakers to reach an agreement on a budget before the October 1 deadline. This triggered a government shutdown that left up to a million US federal employees on unpaid leave.

"Now that the US government has shut down, attention moves to the issue of raising the debt ceiling from $17 trillion," said Jun Calaycay of Accord Capital Equities Corporation.

"The alternative -- should the wrangling and finger-pointing continue through October 17 -- is more fear-inducing. The US will default on its loans and it may yet lose another notch off its credit rating," he said.

Earlier today, Manila-based Asian Development Bank hiked its Philippine economic growth forecast to seven percent from the original six percent estimate, while cutting its growth projection for other emerging Asian countries.

"In a way it's not surprising but any good news helps at this point," Tan said.

source: interaksyon.com

Philippines, 4 northern European countries eye free trade deal

MANILA - The Philippines and four countries in Europe that are not part of the European Union (EU) are eyeing a free trade deal, the Department of Trade and Industry (DTI) said.

Trade Undersecretary Adrian S. Cristobal Jr. told reporters last week that the Philippines and the European Free Trade Association (EFTA) composed of Iceland, Liechtenstein, Norway and Switzerland would start by November impact studies as well as technical discussions for a free trade agreement (FTA).

Cristobal said EFTA’s member-countries first expressed interest to pursue a free trade deal with the Philippines on the sidelines of the World Trade Organization’s (WTO) ministerial meeting in 2011. The visit to the Philippines of Swiss State secretary for economic affairs Marie-Gabrielle Ineichen-Fleisch last June was a follow through to that interest in a Philippine-EFTA trade agreement, Cristobal said.

“They [EFTA members] showed strong interest in an FTA with the Philippines. We’re reciprocating that interest,” he said.

He said the four EFTA countries are seen as an emerging source of foreign direct investment (FDI). “We’re studying closely the potential advantages,” Cristobal said.

He said the Philippine-EFTA trade agreement may “move faster” than the ongoing discussions for an FTA with the EU.

The Philippines and EU remain in scoping talks for a free trade deal, with technical discussions and consultations with stakeholders from both sides yet to wrap up.

On its website, EFTA said it is also “currently engaged in negotiations on free trade agreements” with other Asean members such as Indonesia, Malaysia, Thailand and Vietnam. EFTA already has an existing FTA with Singapore. The group is engaged in 26 FTAs involving 36 trading partners.

EFTA was formed in 1960 as “an economic counterbalance to the more politically driven European Economic Community (EEC)” or now more popularly known as the EU.

source: interaksyon.com

PH stock market down on light trading

MANILA - Philippine share prices drifted lower on Tuesday in light trading, as investors focused on renewed concerns over the US debt ceiling and the future direction of its monetary policy.

At the Philippine Stock Exchange, the benchmark index fell 16.56 points or 0.26 percent to close at 6,461.38. Except for the marginal gain of the financial counter, the other sub-indices finished in negative territory, with the property, industrial and service sectors losing at least 0.50 percent each.

Decliners outnumbered advancers, 83 to 56, while 43 issues were unchanged. A total of 670.52 million stocks worth P6.62 billion changed hands.

Most actively traded stocks were Alliance Global, PLDT, Universal Robina, LT Group and BPI. The biggest gainers were Millennium Global, AgriNurture and E-Game, while the biggest losers were Mabuhay Vinyl, Vitarich and Solid Group.

"The US remains among the top source of new jitters this time revolving around the debates on the debt ceiling," said Jun Calaycay of Accord Capital Equities Corp.

The US Treasury may hit its borrowing limit by mid-October. The cap must be raised to prevent the world's largest economy from defaulting on its debt.

This not the first time that the US government is faced with this problem. It happened three years ago and again in late 2012, causing a massive selloff in global markets.

"President [Barack] Obama has indicated earlier that he will not 'negotiate' on the issue against hardline Republicans. This puts in peril the creation of a much needed additional federal government borrowing space – a scenario that could lead to a shutdown and a debt default," Calaycay said.

Overnight, the Dow Jones industrial average shed 49.71 points or 0.32 percent to close at 15,401.38 as investors weighed the next move of the US central bank on its monetary stimulus.

"It’s a mix of extending the duration of the stimulus, to shifting focus to priming the real economy and to outright tapering – running the whole gamut of all possible policy alternatives and leaving investors clueless," said Calaycay.

In its last policy meeting, the Federal Open Market Committee (FOMC) decided to postpone the tapering of its $85-billion bond-buying program, a huge driver of stock market rallies in the past.

William Dudley, president of the Federal Reserve Bank of New York, said the current pace of economic growth is not strong enough to withstand the reduction of the US central bank's asset purchases.

This statement came on the heels of conflicting statements of FOMC members signaling the central bank could start reducing stimulus next month, while another criticized the decision not to taper in September.

"Except for the ongoing crisis in three barangays of Zamboanga City and the seemingly diminishing steam of the pork barrel saga, there is very little investors can actually move and act on from the domestic front – except the oncoming end-of-quarter window dressing – from which hopes of a short-term positive action springs," Calaycay said.

source: interaksyon.com

Window-dressing seen to prop up stock market this week

MANILA - Buying momentum from last week's trades may spill over this week on quarter-end window dressing and improved risk appetite brought about by the US Federal Reserve's move to keep the pace of its economic stimulus at least for now.

With the US central bank's decision giving equities a temporary reprieve and diminishing concerns of a military attack against Syria, markets begin the week with a relatively clean slate as the two biggest concerns that have weighed on sentiments recently were eased off the table, analysts said.

"One thing going for the local market is the approach of the end of third quarter traditionally marked by window-dressing induced increase in share prices, particularly for members of the composite measure," said Jun Calaycay of Accord Capital Equities Corp.

The final week of trades in the first and second quarters delivered gains of 2.2 percent and 5.1 percent, respectively, putting this week's upside target range between 6,560 and 6,750, Calaycay said.

"We see no reason for the index to go down in the near term now that the Fed has postponed its tapering, which has resulted in a risk-on sentiment," said BPI Asset Management in a weekly report.

However, the Philippine Stock Exchange index's may succumb to pockets of profit-taking following the local barometer's 11.96 percent rally since August 28, BPI added.

The Philippine stock market is coming off a strong week of gains, soaring 4.5 percent to close at 6,424.45 after the Fed decided to hold off the tapering of its $85-billion bond-buying program, a huge driver of stock market rallies in the past.

"As the tapering concern moves to the background, Congress and the White House are seen to get entangled in debates over the US debt ceiling. This is no different from the tiff that nearly shut down government in 2011 and, yet again, early this year...A US default, or at least the prospect of it, may once more shatter confidence in equities," Calaycay said.

The US Treasury may hit its borrowing limit by mid-October. The cap must be raised to prevent the world's largest economy from defaulting on its outstanding obligations.

Fears of a government shutdown and conflicting signals from Fed members dragged the Dow Jones industrial average to its biggest daily slide since August 15. The Dow fell 185.46 points, or 1.2 percent to 15,451.09 last Friday.

A Federal Open Market Committee (FOMC) member signaled the central bank could start reducing stimulus next month and another blasted the decision not to taper in September.

"With economic policies in place and expectations for full year economic growth set, we see no immediate factors that will influence the market to move exceedingly higher. Volatility should be expected in the coming days as the eyes of investors will remain on what happens to US in the next weeks or even month," Maria Arlysa E. Narciso of AB Capital Securities Inc.

source: interaksyon.com

Philippines, UK plan to double trade in 5 years

MANILA - The Philippines and the United Kingdom have agreed to double trade in the next five years amid growing interest for partnerships among Filipino and British businessmen.

In a press conference today, UK Minister of State for Trade and Investment Lord Stephen Green of Hurstpierpoint said two-way trade between the two countries has much room to grow as volumes remain minimal.

UK Trade and Investment (UKTI) data showed that two-way trade of goods and services reached £1.2 billion or P82 billion last year.

With increasing awareness about the opportunities that both countries can offer each other, Green said it would be easy to jack up trade and investments in the coming years, especially in the business process outsourcing (BPO), engineering, financial and retail sectors.

"We expect to see trade in both directions to double in the next five years," Green said.

The UK trade chief said more British businessmen are interested in the Philippines following its record economic expansion.

"The story of the Philippines needs to be more actively told," he said.

Philippine Trade Undersecretary Ponciano C. Manalo Jr. said four export sectors present opportunities for wider partnership between the two countries, namely, automotive parts, BPO, creative industries and food.

Finance Secretary Cesar V. Purisima said the UK may serve as the gateway for Filipino businessmen setting their sights at the European Union (EU).

"The EU remains the largest economic zone but is underrepresented in our trade. Despite the economic difficulties in that area, we welcome opportunities from the UK and the EU in general," Purisima said.

source: interaksyon.com

'Hot money' plummets in August amid emerging markets selloff

Foreign funds invested in shares of stock of local listed firms and in other Philippine financial assets dropped sharply last month amid a selloff in emerging markets.

Data from the Bangko Sentral ng Pilipinas (BSP) showed that foreign portfolio investments -- also called "hot money" because of their flighty nature -- fell 60 percent to $999 million in August from $2.5 billion the month before. Inflows also slipped 20 percent from $1.3 billion in August of last year.

Outflows also accelerated from $868 million last year to $1.4 billion this year, thus last year's net inflows of $387 million reversed to net outflows of $442 million last month. This narrowed the year-to-date net inflows from $2.2 billion last year to $2 billion this year.

The BSP blamed the net outflow on the shortened trading brought about by bad weather, and on the traditional unwinding of stock market positions during the "ghost month" of August, an inauspicious time to invest for those who believe in luck. Eight out of every nine dollars of portfolio inflows were invested in Philippine stocks.

Also responsible for the outflow was the US Federal Reserve's hints that it may unwind its economic stimulus this month, the BSP said. Nearly eight out of every 10 dollars that pulled out of the Philippines went back to the US.

Foreign funds have been scaling back their exposure to emerging markets like the Philippines amid signs that the US economy is on the mend, a trigger for the Fed's decision to remove its economic stimulus. The Fed's monthly $85-billion bond-buying -- the third tranche of what has come to be called "quantitative easing" (QE) -- has been responsible for equity rallies around the world.

As a resut of the foreign fund pullout, the Philippine Stock Exchange index has trimmed its gains from a record high of more than 20 percent to seven percent in recent sessions.

source: interaksyon.com