Analyst Expects Massive Netflix Subscriber Growth
As coronavirus cases continue to explode across parts of the
U.S. investors turned back to the stay-at-home trade on Friday, sending shares
of Netflix 8.1% higher on the day. Adding to the upside momentum was an upgrade
from a Goldman Sachs analyst that put a $670 price target on the streaming
media stock. That is more than 30% above the Thursday close.
Strong trends in Netflix app downloads has the Goldman
analyst convinced that next Thursday will see the company release blowout
numbers for the second quarter. According to the Goldman Sachs analyst Netflix
is poised to report 12.5 million new subscribers in the second quarter. That
would be a huge beat over the company’s guidance for 7.5 million new
subscribers, and the consensus expectations for 8.2 million new subscribers.
Goldman dismissed the bearish argument that declares
everyone who plans on subscribing to Netflix has already subscribed. Instead
they believe Netflix will benefit from the increasing number of users joining
in the streaming video trend during the COVID-19 pandemic.
The analyst points to the fact that there are no other
services available for streaming that can offer anything close to the scale of
the Netflix library of titles.
There’s also a belief from Goldman that others continue to underestimate
the size of Netflix’s global market, and the impact of the incremental content
spending at Netflix, combined with the growing value of the service to users,
and the weak competitive landscape.
Netflix closed out the day with a new all-time high, and
shares are now up an impressive 69.6% since the start of the year.
U.S. Daily Market Review
The major stocks advanced after Gilead Sciences reported that its remdesivir treatment reduced the risk of death for Covid-19 patients.The President Donald Trump stated that he is not thinking about negotiating another phase of trade deal.This takes place after the tensions between Washington and Beijing and surged over the coronavirus pandemic and other issues.The United States marked the biggest rally in new COVID-19 infections globally for the second day in a row on Thursday. U.S. small cap stocks are about to outperform the S&P 500 in the uncertain aftermath of the coronavirus crisis.Amazon has asked its employees to remove the Chinese-owned video app TikTok from their cellphones.Wells Fargo is looking for additional customers to get a popular mortgage product. The company is requesting new clients to bring at least $1 million in balances in case there are willing to refinance a jumbo mortgage.
USD/CAD Stays Stonger
USD/CAD has marked a solid incline today.The pair advanced around 0.40% on daily basis.Canada Housing Starts rallied to 212 thousand, above expectations. Presently, the USD versus the CAD trades at 1.359, which is an additional rise of $0.00126 or 0.09% from the previous close of $1.35844.The daily trading range is from $1.3574 to 1.3631, while the trading volume is 111.284K.In the US, jobless claims sunk for a 13th straight week, to 1.31 million. Housing starts advanced to 212 thousand, which is rise of around 193 thousand. US unemployment are still dropping pattern. Additionally, claims retreated for 13th consecutive week on Thursday.On Thursday, claims slipped to 1.31 million, which is a decline from 1.42 million beforehand.
European Daily Market Review
European markets slipped today with shares in France off the most. The leading European indexes follow the overnight weaker pattern coming from Asia Pacific.The French CAC-40 dropped 0.53% while Germany's DAX tumbled 0.41% and London's FTSE-100 fell 0.40%.European shares extended losses for a fourth straight session on Friday on worries that an economic recovery may fizzle out as coronavirus cases continue to rise globally. The pan-European STOXX-600 retreated 0.4% by 0714 GMT, with energy firms leading the falling path. In the meantime, the U.S. registered higher infections again on Thursday, with California and Florida among 12 states breaking records on seven-day averages for daily new cases.The World Health Organization alarmed that the virus is “getting worse” in most of the world, greater than 12.2 million confirmed cases globally, according to Johns Hopkins University.
Crude Oil Price Decline
Oil prices are into retreat today adding to the massive drops from the previous session.Oil is about to register weekly losses amid the concerns of renewed lockdowns following a rally of the coronavirus cases in the United States.Now, oil trades at $38.760, which is a decline of $0.805 or 2.03% from the previous close of $39.565.The daily trading range is from $38.735 to 39.775, while the trading volume is 18.113K.Moreover, oil seems like is ready for a weekly retreat of around 2% and U.S. crude for a fall of more than 3%. Many market analysts predict economic recovery and larger fuel demand to bounce back from the pandemic. However, the massive surge of the coronavirus infections in the United States, the world's biggest oil consumer, resulted in worries about the pace of any recovery. Oil inventories also remain bloated due to the evaporation of demand for gasoline, diesel and other fuels during the initial outbreak.
Asian Daily Market Review
Asian markets are trading broadly lower on Friday following
the mixed session on Wall Street, and with investors becoming increasingly
worried over the rising number of COVID cases in the sunbelt of the U.S.
Mainland China’s markets opened to gains, but have quickly
erased the early gains and trade in negative territory. The Shanghai Composite
is 0.8% lower, while the smaller cap Shenzhen Composite is flat after giving up
a 0.5% gain. In Hong Kong the Hang Seng trades 1% lower as investors there also
have concerns over the U.S. potentially breaking the peg between the U.S. and
Hong Kong dollars.
In Japan the Nikkei has a modest 0.2% loss, but shares of
Softbank Group are continuing its rally, rising 1.6% today. Meanwhile Sony has
rallied 2.7% higher, but Toyota is trading 1.5% lower and Fast Retailing has a
Australia’s benchmark S&P/ASX 200 has pared early
losses, but is still trading down by 0.1%. The big four banks are mostly lower,
with three of the four lower in the range of 0.2% to 0.7%, but Commonwealth
Bank is up 0.8%. Major miners are showing weakness, with BHP trading 0.3%
lower, and Rio Tinto down 0.9%. Gold miners are also falling in sympathy with
overnight losses for the yellow metal. Evolution Mining is 3.3% lower while
Newcrest Mining has a 1.5% loss.
In South Korea the Kospi is 0.7% lower, while Taiwan’s Taiex
trades down 0.6%.
Southeast Asian markets are also broadly lower, with the
Straits Times in Singapore losing 0.6%, and the KLCI in Malaysia and the
Jakarta Composite in Indonesia both down 0.1%.
Copper Is Looking Good In The 2nd Half Of 2020
Copper prices plunged early in the year as coronavirus shut
down economies all across the world, causing traders to fear the harsh impact
the shutdowns would have on copper demand.
Since then the recovery in China has helped demand
projections for the industrial metal in the second half of the year. Also
helping prices are the supply disruptions in Chile, which is a top producer of
Thursday saw copper close the day with a 0.9% gain, and that
means the metal is now at a 14-month high. Prices have fully recovered from
losses caused by COVID lockdowns and have now gained 2.7% since the start of
the year. That may not be as good as gold, but it is better than rival
industrial metals silver and platinum.
The only potential pitfall for copper would be if a second
wave of coronavirus would also cause a second wave of shutdowns. So far that
doesn’t seem to be likely though. Cases have been rising to record levels in
the U.S., but economies there remain open. On mainland China any signs of the
virus are dealt with immediately with local quarantines and contact tracing.
In fact, the only effect from coronavirus now has been a
positive one, since it has been curtailing demand by keeping mines in Chile and
other parts of South America closed. And the longer that drags on the more
bullish it will be for copper since inventory levels have already dropped to
levels last seen in January.
So, copper is bouncing back, but a second wave of COVID
could derail the rally.
U.S. Daily Market Review
Stocks partly advanced today with tech shares continuing their relentless march higher and sending the Nasdaq Composite to a new peak.Data from the Labor Department indicated in that both new and continuing unemployment insurance claims dropped the most. This is adding to the worries of a resurgence in joblessness following a rise in coronavirus cases domestically.Mortgage rates in the U.S. slipped to a record bottom for the sixth time since the coronavirus outbreak began roiling financial markets.The average for a 30-year fixed loan was 3.03%, which is the weakest mark of the last 50 years.Moreover, the previous record was 3.07%, which held for a week. New applications for U.S. jobless benefits retreated. A massive amount of 32.9 million Americans became out of jobs. The yield on the benchmark 10-year Treasury note tumbled around 2 basis points to 0.635% and the yield on the 30-year Treasury bond traded 3 basis points lower at 1.360%.
The Rate Of The USD Tumbles
The USD dropped earlier today during the European hours.Most investors and traders are looking out for riskier riskier currencies amid expectations of future economic advance.Currently, the Euro versus the USD trades at $1.1325, which is a decline of $0.00040 or 0.04% from the previous close of $ 1.13295.The daily trading range is from $1.1306 to 1.1370, while the trading volume is 213.812K.The pair managed to shift largely above the 1.13 level and close to the peak from early June.Now, the focus is on the report of the unemployment data from the U.S. later in the session. Jobs numbers have been advancing as states and cities come back from Covid limitation measures. However, many areas have now been forced to slow down the recovery of the openings.
European Daily Market Review
European markets are into a mixed path.The DAX inclined 1.40% while the CAC-40 added 0.25%. On the other side, the FTSE-100 dropped 0.57%.The pan-European Stoxx 600 rallied 0.3% by early afternoon, with tech stocks jumping 1.9% to lead the rising trend.The Euro currency is heading toward a close above its 200-week average for the first time in a year. Turkey’s lira this week is into a falling pattern and about to enter to its lowest marks since hitting a record low in early May after inflation for the month of June was reported at 12.6%.Turkey’s central bank preserved the benchmark interest rate at the same level of 8.25% during its last monetary policy decision late last month.German software manufacturer SAP announced that business activity is moving to a higher gear at a bigger rate than predicted in the second quarter.
Crude Oil Prices Fall
Oil slipped this morning in Asia, with boosting new cases of COVID-19. This is further eroding the market sentiment and investor confidence in economic recovery.Now, oil trades at $ 40.745, which is a decline of $0.110 or 0.27% from the previous close of $ 40.855.The daily trading range is from $40.665 to $40.970, while the trading volume is 7.492K.The U.S. Energy Information Administration (EIA) marked an over supply of 5.654-million, which came 3.114-million-barrel draw forecasted. On a global scale, the pandemic is negatively affecting oil demand levels.In fact, the number of cases in the U.S. jumped above 3 million as of July 9. Furthermore, the World Health Organization (WHO) has acknowledged the likehood of airborne transmission of the COVID-19 virus.
Asian Daily Market Review
Asian markets are trading broadly higher once again on
Thursday morning, with mainland China continuing to lead the way higher for the
region. The continued strength comes after China reported inflation data, with the
producer price index slipping 3% on a year-over-year basis, while the consumer
price index gained 2.5%.
Mainland China’s Shanghai Composite is trading 0.6% higher,
and the smaller cap Shenzhen Composite is leading the region as it’s advancing
1.5%. Over in Hong Kong the Hang Seng has a 0.5% gain and is trading off its
best levels of the session.
In Australia the S&P/ASX 200 is gaining momentum and
trades 0.9% heading into the afternoon in Sydney. The big four banks are
helping with the gains as they trade higher in the range of 0.4% to 1.1%.
Miners are also doing particularly well today, with BHP trading 2.2% higher and
Rio Tinto adding 3.1%. In the gold mining space Evolution Mining is 4% higher,
while Newcrest Mining adds 2.4%.
In Japan the Nikkei is trading 0.2% higher, while the Yen
remains tightly range-bound. Shares of Softbank Group have rebounded strongly
from previous session losses and are trading 4.8% higher today. Sony is also up
by 1.1%, but Toyota shares are falling 0.5%.
In South Korea the Kospi is trading up by 0.5%, and in
Taiwan the Taiex has a 0.5% gain as well.
Southeast Asian markets are mixed however as Singapore’s
Straits Times Index is bucking the rising trend across the region and has a
0.3% loss, while Indonesia’s Jakarta Composite trades 0.2% higher, and the KLCI
in Malaysia is holding to a 0.1% gain.
U.S. Banks Set To Kick Off Earnings Season Next Week
Next week earnings season will kick off, with the first
major reports coming from the banking sector. Results aren’t expected to be
pretty, but analysts are hoping for some bright spots that will help maintain a
sense of cautious optimism for the sector, which has been a poor performer over
the past months of economic stress due to the coronavirus.
Some of the optimism over the sector is that the current
struggles are not the banks fault, unlike during the financial crisis of 2008.
That means this event will primarily cause an earnings issue, not a balance
sheet issue. And that will make a recovery for the banks easier and faster.
The banks least exposed to low interest rates are the ones
most favored by analysts right now. That includes Morgan Stanley, Bank of
America, JPMorgan Chase, and Citigroup. Goldman Sachs is considered a weaker
player after it stumbled during last month’s bank stress tests, and Wells Fargo
has already cut its dividend, making it one of the weaker players in the
banking sector as well.
Trading activity and capital markets exposure should help
some of these banks maintain some of their profits this quarter, since the
capital markets have been extremely busy. That should lead to a good deal of
Even with the rising capital markets related revenues
profits are expected to fall sharply. But investors can remain optimistic and
look for the names that should benefit if the U.S. economy remains on a steady
road to recovery in the second half of 2020. Analysts continue to advise buying
strong names on dips.
U.S. Daily Market Review
U.S. stocks are still without a strong direction today, while mainland Chinese shares extended a gaining path streak for a seventh consecutive day.The United States announced little more than 60,000 new Covid-19 cases. As a matter of fact, this is registering a new record for new cases reported in a single day.The S&P-500 advanced in early trading before paring those. The Nasdaq Composite inclined 0.4%. The Dow Jones Industrial Average is partly static.New York City public schools are not planning to fully reopen this fall as the city tries to keep the coronavirus epidemic under control, according to Mayor Bill de Blasio.The city has a whole 1.1 million students.United Airlines Holdings Inc. is expected to lay off around 36,000 workers. Additionally, the company is likely to extend the worker cuts in August. This was reported by the Wall Street Journal.
European Daily Market Review
European markets retreated this morning after rallying coronavirus cases in parts of the world continue to cast doubt over the possibility of global recovery.The pan-European Stoxx 600 slipped 0.6% by late morning.International Monetary Fund (IMF) Chief Economist Gita Gopinath reported that many countries may need to restructure their debt in the aftermath of the pandemic which resulted in economic crisis.Deutsche Bank has been affected $150 million fine by the New York financial regulator over its relationship with notorious sex offender Jeffrey Epstein.The German economy has been affected by coronavirus crisis, with economic output contracting by 2.2% in the first quarter.German exports are expected to drop around 15% this year and will only recover slightly in 2021. Exports could advance by a single-digit percentage next year, by 7% if the situation improves significantly.