By Swissquote Analysts
American Express Reports Second-Quarter Revenue of $10.2 Billion
Topic of the day
American Express Company reported second-quarter net income of $2.3 billion, or $2.80 per share, compared with net income of $257 million, or $0.29 per share, a year ago. The results reflected the impact of $866 million ($658 million after tax) in credit reserve releases, primarily driven by the company's strong credit performance and continued improvements in the macroeconomic outlook. "Our strong second quarter results show that the steps we have taken to manage the company through the pandemic and our strategy of investing to rebuild our growth momentum are paying off," said Stephen J. Squeri, Chairman and Chief Executive Officer. Second-quarter consolidated total revenues net of interest expense were $10.2 billion, up 33 percent from $7.7 billion a year ago. The quarter primarily reflected growth in Card Member spending, as well as a rise in the average discount rate from increased levels of travel and entertainment spending in the U.S., compared to the prior year. Consolidated provisions for credit losses resulted in a benefit of $606 million, primarily reflecting the previously mentioned reserve releases and lower net write-offs, compared with a provision expense of $1.6 billion a year ago, which primarily reflected significant credit reserve builds.
The Swiss stock market climbed to record levels on Friday in the wake of positive economic data. Convincing economic data from Germany, but also from the Eurozone, increased the risk appetite among investors. But the reporting season has also met the high expectations so far, it was said. The SMI gained 1.3 per cent to 12,131 points. Among the 20 SMI stocks, there were 19 price gainers and one price loser. 27.76 (previously: 32.41) million shares were traded. Lonza was at the top of the table with a gain of 4.2 per cent. This individual share also marked an all-time high. The pharmaceutical company shone with convincing half-year figures and raised its outlook for the full year. Analysts were full of praise. Cyclical stocks such as Richemont, Swatch, ABB and UBS were particularly sought after with the positive economic data, with gains of between 2.7 and 1.3 per cent. In the technology sector, AMS gained 1.4 per cent.
European equity markets rose for the fourth straight session on Friday, buoyed by strong indicators in the euro zone and another round of corporate earnings in France. The Stoxx Europe 600 index gained 1.1% to 461.5 points. For the week as a whole, the pan-European index rose by 1.5%. In Paris, the CAC 40 and SBF 120 gained 1.4% and 1.3% respectively. In Frankfurt, the DAX 30 rose by 1% while the FTSE 100 in London gained 0.9%. Vodafone Group PLC said Friday that revenue rebounded in the first quarter of fiscal 2022, recovering from the hit caused by the coronavirus pandemic last year, and said it is on track to meet its expectations for the full year. The U.K.-based telecommunications group said service revenue - a key metric in the telecom sector - returned to growth in Europe for the three months to June 30 and continued its positive trend in Africa, as both its consumer and business-facing segments contributed to the rise. Thales SA upgraded its sales forecast for the year after booking rising sales and net profit in its first half as activities rebound from the year before, which was hit by the coronavirus pandemic. The French aerospace-and-defense company posted net profit for the period of 433 million euros ($510.7 million), up from EUR65 million a year earlier. On an adjusted basis, net income stood at EUR591 million. Thales booked EUR8.24 billion in order intake, up 37% on year organically mainly thanks to positive momentum at its defense, security and space division, it said.
U.S. stocks rallied Friday, pushing the Dow Jones Industrial Average across the 35000 closing milestone for the first time, in a striking rebound from major indexes' pullback earlier this week. All three major U.S. stock indexes finished Friday at all-time highs after each posted weekly gains of more than 1%. The S&P 500 finished Friday up 44.31 points, or 1%, to close at 4411.79, notching a 2% gain for the week and its 40th record close for the year. The Dow Jones Industrial Average added 238.20 points, or 0.7%, to close at 35061.55, marking a 1.1% weekly gain. The climb past 35000 marked the index's fastest 5,000-point gain to a new milestone, according to Dow Jones Market Data, taking only 165 trading days, including Friday, to climb from 30000. The Nasdaq Composite, meanwhile, gained 152.39 points, or 1%, Friday, to finish the week at 14836.99. The technology-heavy index rallied 2.8% for the week. Intel stock took a beating Friday from investors who apparently weren't happy with the chip titan's forecast for its gross margin, despite strong second-quarter earnings and an overall bullish outlook for the rest of the year. Shares closed down 5.3%, at $52; the PHLX Semiconductor index, or Sox, ended the day up 0.6%. Company executives touched on the lower gross margin - 53% for the third quarter vs. the second-quarter's 57.1% - during earnings call late Thursday. Snap Inc.'s revenue more than doubled in the second quarter and user growth jumped the most in four years, as people continued to flock to the social-media app despite a return to more normal daily routines. The company projects revenue in the current quarter will climb as much as 60% as its pandemic-era popularity continues, even as the health crisis wanes.
The stock market landscape in East Asia is very divided on Monday. While Tokyo is trending solidly, the Chinese stock exchanges in Hong Kong and Shanghai are registering sensitive losses of well over 2 per cent. Meanwhile, the Bitcoin is making a huge jump of over 10 per cent and is trading at around 38,300 dollars. Japan's Nikkei index gains 1.2 per cent to 27,883 points after a good showing from Wall Street on Friday.
Treasury yields rise Friday but the 10-year lost 0.014 percentage point last week to 1.286%. The benchmark has fallen 0.157 p.p. this month.
JP Morgan rises Deutsche Telekom target to 28,50 (25) EUR – Overweight
UBS rises ABB target to 36 (33) CHF – Buy
IR lowersDaimler target to 86 (88) EUR – Buy
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