The US session has kicked off on the front foot with the Nasdaq touching record highs within minutes of opening and the S&P and Dow Jones edging higher. After some fairly choppy action over the last two weeks, this week in contrast continues to be thin on volatility. Although there is not a huge amount of movement on the indices, we are seeing some significant movement on individual stocks.
Twitter (NYSE:TWTR) growth disappoints
Twitter released a disappointing set of results, although the social media giant beat on earnings per share, the overriding concern is the miss on revenue. Twitter had revenue of $717m in the fourth quarter versus expectations of $740m.
This miss is such a big deal because Twitter is receiving more attention than ever, thanks to President Trump’s usage, however the firm is failing to convert this attention into growth. They have the resources but they haven’t managed to create a platform that attracts more users and they haven’t been able to create a viable return for advertisers. Yes, the number of users grew, but only marginally, 7% in the quarter, and this was a quarter with US Presidential elections so user growth should have been much higher. When compared to Snapchat, which is estimated to have seen user growth of 90% in 2016, the problem of Twitter is laid bare.
The shares fell 7% on the release of the results in the pre-market and continued to grind lower, opening trading down 10%.
Trump wades into airlines
President Trump is working his way through the sectors, almost company by company, meeting with the CEOs and today it is the turn of the Airlines. As far as the markets are concerned, these meetings are good news and demonstrates Trump’s pro-business attitude. If we look back to Trump meeting with pharmaceutical bosses, the stocks then rallied and haven’t looked back since.
Security and regulation are the subjects to be covered off in today’s meeting and the expectation is that Trump will be receptive to deregulation and will look to protect national airlines in the face of subsidised foreign competition. Should we see policy coming out to support this, then shares in aviation firms could soon be taking off.
Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient.
Any references to historical price movements or levels is informational based on our analysis and we do not represent or warrant that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, the author does not guarantee its accuracy or completeness, nor does the author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.