Top News  Shutterstock Tech continues to lead the charge on Wall Street to start the week, with the Nasdaq closing up 2.6% on Monday and futures pointing to another 1% gain at the open. The move higher follows the WSB/Reddit trader disruption, which saw the market log its worst week since October. New catalysts appear to be on the horizon as the last of the FAANGs report earnings after today's closing bell.
Alphabet (GOOG, GOOGL) - Supported by a recovery in digital ad spending during the holiday season, the tech giant is likely to top $50B in Q4 sales. Other areas of Alphabet's business have also been growing strongly, including Google's Cloud business, Search and YouTube. While these are all positive signals, analysts will also be listening closely for commentary on policy developments. Google recently removed Parler from the Play Store, and it will have to deal with upcoming privacy changes being instituted by Apple (and may even unveil its own).
"Our checks with SEMs [search engine marketers] suggest search spending accelerated from 3Q to 4Q," said JPMorgan analyst Doug Anmuth. "Certain verticals heavily affected by COVID-19, including travel that we believe represented 10-15% of search revenue prior to the pandemic, likely remained challenged throughout 4Q given resurgence and related shutdowns. We believe recovery in these verticals will happen through '21 as consumers continue to get vaccinated, driving further acceleration in ad revenue."
Amazon (NASDAQ:AMZN) - An accelerating shift to online shopping will bolster results, especially over "Prime Day" and the holiday shopping season. The e-commerce behemoth is set to report its first-ever quarter doing more than $100B in revenue, bringing full-year 2020 revenue to an astounding $379B, with additional support from the AWS powerhouse. Also be on the lookout for some major expenses. Amazon has earmarked more capital for worker safety during the pandemic and pledged to pour more money back into the company to sustain its growth rate
"Thematic data points we have gathered throughout 2020... collectively point to consumers globally becoming increasingly comfortable purchasing online every day as opposed to every now and then," Credit Suisse analyst Stephen Ju declared. "These factors amount to the following near to long-term potential implications for Amazon: 1) upside to GMV [gross merchandise value] estimates in 2021 and beyond, and 2) moderating customer acquisition/retention costs as greater purchase frequency reinforces Amazon/Prime brand."
   | | Top News Shutterstock Tech continues to lead the charge on Wall Street to start the week, with the Nasdaq closing up 2.6% on Monday and futures pointing to another 1% gain at the open. The move higher follows the WSB/Reddit trader disruption, which saw the market log its worst week since October. New catalysts appear to be on the horizon as the last of the FAANGs report earnings after today's closing bell.
Alphabet (GOOG, GOOGL) - Supported by a recovery in digital ad spending during the holiday season, the tech giant is likely to top $50B in Q4 sales. Other areas of Alphabet's business have also been growing strongly, including Google's Cloud business, Search and YouTube. While these are all positive signals, analysts will also be listening closely for commentary on policy developments. Google recently removed Parler from the Play Store, and it will have to deal with upcoming privacy changes being instituted by Apple (and may even unveil its own).
"Our checks with SEMs [search engine marketers] suggest search spending accelerated from 3Q to 4Q," said JPMorgan analyst Doug Anmuth. "Certain verticals heavily affected by COVID-19, including travel that we believe represented 10-15% of search revenue prior to the pandemic, likely remained challenged throughout 4Q given resurgence and related shutdowns. We believe recovery in these verticals will happen through '21 as consumers continue to get vaccinated, driving further acceleration in ad revenue."
Amazon (NASDAQ:AMZN) - An accelerating shift to online shopping will bolster results, especially over "Prime Day" and the holiday shopping season. The e-commerce behemoth is set to report its first-ever quarter doing more than $100B in revenue, bringing full-year 2020 revenue to an astounding $379B, with additional support from the AWS powerhouse. Also be on the lookout for some major expenses. Amazon has earmarked more capital for worker safety during the pandemic and pledged to pour more money back into the company to sustain its growth rate
"Thematic data points we have gathered throughout 2020... collectively point to consumers globally becoming increasingly comfortable purchasing online every day as opposed to every now and then," Credit Suisse analyst Stephen Ju declared. "These factors amount to the following near to long-term potential implications for Amazon: 1) upside to GMV [gross merchandise value] estimates in 2021 and beyond, and 2) moderating customer acquisition/retention costs as greater purchase frequency reinforces Amazon/Prime brand."
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| Earnings Ugly Q4 results from BP (NYSE:BP) sent shares of the energy giant down 5% in premarket trade as the coronavirus pandemic weighed on demand and slammed earnings. Underlying replacement cost profit, used as a proxy for net profit, fell 96% Y/Y to $115M vs. an expected $360M. For the full year, BP slumped to a loss of $5.7B, its first in a decade, driven by the collapse in energy prices and weaker refining margins, as well as fragile gas marketing, trading results and asset/exploration writeoffs.
"2020 will forever be remembered for the pain and sadness caused by COVID-19. Lives were lost - livelihoods destroyed. Our sector was hit hard as well. Road and air travel are down, as are oil demand, prices and margins," said CEO Bernard Looney, who started in his role last February.
Backdrop: After cutting its dividend in August for the first time since the Deepwater Horizon disaster in 2010, BP returned to a profit in the third quarter. Crude prices and energy demand recovered, but fresh government-imposed lockdowns and travel bans triggered BP to warn of a volatile outlook and cut 10,000 jobs. It will likely become known as the "worst year in the history of oil markets," according to the International Energy Agency.
Outlook: Looking to move past the gloom, Looney has described 2020 as a "pivotal year" for the company, but the "toughest of his career." He has pledged to turn BP into a net-zero emissions company by 2050 by selling assets and reshaping its business for a lower-carbon future. In order to accomplish that goal, BP has already slashed capital spending by billions of dollars, cut costs dramatically, secured new credit lines, issued bonds and stalled exploration activity. The (once) oil major also wants to sell $25B in assets by 2025 to slash debt and fund its green energy push. (14 comments)
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