Today is a day full of numbers. In Amsterdam, well-received figures from Shell and ArcelorMittal (see below) gave support to the AEX (+1.2%). ASMI also closed with a nice plus of 4.7 per cent. At mid-caps, AMG (+8.3%) sprinted after a dividend increase and strong quarterly figures.
Shell makes money like water
Let’s catch up right away shall (+0.7%) starts. The company reports strong 2nd quarter figures, and there is very little to complain about the focused way of running the group. The oil and gas giant is making money like water (an adjusted profit of $11.5 billion) and shareholders are benefiting.
The group is now in an excellent financial position, but possible damage claims are lurking. You can read in Shell’s comprehensive analysis how likely analyst Martin Crum thinks it is that these claims will actually follow.
Shareholder Shell is missing nothing https://t.co/5IuCij2Dk6 #IEX
— IEX.nl (@IEXnl) 28 July 2022
Meta under pressure
It was very different with meta (-5.4%), which released a report with historic figures as sales fell in a quarter for the first time since the company was founded. Although people are spending more time on Meta’s platforms (Facebook, Instagram, Whatsapp), the company is not able to generate significantly more money from them. This is evident, among other things, from the directly disappointing prospects. This makes it clear that the advertising industry is under pressure.
A disappointed Niels Koerts tweeted last night: “Both revenue and profitability are disappointing. The outlook especially hurts my eyes. Meta expects revenue of $26 to $28 billion in Q3. Consensus was over $30 billion.” You can read his analysis of the Meta, which he wrote based on the numbers, below.
Meta’s second quarter numbers were certainly nothing to write home about. The outlook for the third quarter is particularly disappointing.
However, it is unwise to throw in the towel. In this analysis I explain why.https://t.co/MhO4ZFG2hw pic.twitter.com/RsarsQJMVE
— Niels Koerts (@KoertsNiels) 28 July 2022
US economy shrank against expectations
As you are used to from us, we also take a look at the macro numbers in the closing call. Starting with the US economy. Gross domestic product fell 0.9% year-on-year in the second quarter, while the market expected growth of 0.3%.
From the states come aswell Initial unemployment claimsi.e. the number of new applications for daily allowance. This figure fell from 261,000 to 256,000 last week, while it was expected to fall to 253,000. Due to the tight labor market, this number is still low and therefore does not have a large effect on prices.
Paul Weeteling in the IEX Investors Podcast
Tomorrow it’s time for a brand new episode of the IEX InvestorsPodcast. In the middle of earnings season, it’s almost inevitable that it’s going to be a packed broadcast, and tech equity analyst Paul Weeteling (who analyzed QualComm this afternoon) will also be on the podcast. Do you have questions for him, Niels Koerts or Arend Jan Kamp? So leave it in the comments below.
Speaking of podcasts, the second episode of BeleggersBootcamp, which I make together with Niels Koerts, came out yesterday. A pleasant episode in which Niels shares his experiences, which he gained when he started at the age of fourteen. We are of course talking about the mistakes he made at that time and we will go into detail compound interest. Listen to it below or share it with your friends and family who want to start investing. Saves you a lot of explanatory work.
Market rates are falling after Fed Chairman Jerome Powell literally said yesterday that the US is not yet in a recession, according to him. The Dutch ten-year yield then falls by twelve basis points to 1.14%.
- The AEX (+1.2%) performs comparable to the French CAC 40 (+1.2%) and the German DAX (+1%).
- The CBOE VIX index (Volatility) falls to 22.6 points.
- Wall Street is in the green: S&P 500 (+0.6%), Dow 30 (+0.6%) and Nasdaq (+0.4%).
- The euro is down 0.3% today, trading at 1.017 against the US dollar.
- There is demand for gold (+1.2%) and silver (+3.4%).
- Oil: WTI (-0.0%) and Brent (+0.2%) remain fairly close to home.
- Bitcoin (+4.6%) is in the plus.
- The quarterly figures for the strongly cyclical company were eagerly awaited ArcelorMittal (+1.9%). And they do not disappoint. In fact, the group is performing better than the market’s expectations. You can read all about it in ArcelorMittal’s analysis.
- A positive report from Unibail (+2.8%). Due to a faster recovery in store sales, to an average of 105% again in Q2 2022 versus Q2 2019, it was able to collect more rent in the first half than previously expected. In this connection, the department sees room to increase its profit expectations. It speaks of challenging macroeconomic conditions, and investors will also have to do without dividends this year. Do you know more? Then read Unibail’s complete analysis.
- In the first half of this year, relx (+2%) experienced a further increase in revenue and profit.
- AMG (+7.7%) outperformed expectations in the second quarter. AMG initially targeted an EBITDA of $260 to $290 million for 2022, but raised it to $280 to $300 million on Thursday.
- JDE Peet’s (+0.1%) will, like e.g Unilever (-0.2%) has been hampered by cost inflation, analyst Martin Crum surmises in his analysis of JDE Peets.
- Arcadis (-0.6%) is reporting decent numbers and the outlook is bright. The engineering and consulting firm remains fully engaged; customers all over the world are working to reduce their CO2 emissions, and for this they call on Arcadis’ expertise. The company invests heavily in digitization and can offer customers an increasingly sophisticated range of services. The order book continues to expand and now offers work for almost a year. Only the increasing debt burden due to the recent acquisition of IBI Group is of concern to the IEX Investors’ Desk. Read more about this in the Arcadis analysis.
- CM.com (-7.3%) has seen slow growth in the first half of 2022, slightly lowering the outlook for revenue for this year. “Growth slowed due to an unusually strong second quarter in 2021,” CM.com said in a statement.
- IEX Group (+2%) saw revenue and profit increase in the first six months of the year. Revenue increased by 16% to €2.5 million in the past six months. IEX benefited from, among other things, increased direct advertising revenue and higher subscription revenue. The number of subscribers increased slightly.
Advice (source: Guruwatch.nl)
- Vopak: to €24.50 from €35 and keep – Jefferies
- Philips: to €18.80 from €21.30 and sell – JPMorgan Research
- Philips: to €22 from €24 and keep – Deutsche Bank
- Randstad: hold advisory with price target of €49 – Citi Research
Agenda for Friday 29 July
00:50 Industrial production – June election (Japan)
00:50 Retail sales – June (Japan)
06:30 Retail turnover – June (NL)
06:30 Producer Awards – June (NL)
07:00 Signify – Second quarter figures
07:00 BNP Paribas – Q2 figures (From)
07:00 EssilorLuxoica – Second quarter figures (From)
07:00 Renault – Second quarter figures (From)
07:15 Air France-KLM – Second quarter figures
07:15 Heijmans – Second quarter figures
07:30 Basic-Fit – Second quarter figures
07:30 Economic growth – Second quarter vpg (From)
08:00 Brunel – Second quarter figures
08:00 Ctac – Figures second quarter
09:55 Unemployment – June (German)
10:00 Economic growth – Second quarter vlpg (German)
11:00 Economic growth – Second quarter vpg (eur)
11:00 Inflation – July vlpg (eur)
13:00 Chevron – US Q2 figures
13:00 Colgate-Palmolive – US Q2 figures
13:00 Exxon Mobil – US Q2 figures
13:00 Procter & Gamble – US Q2 figures
14:30 Personal income and PCE inflation – June (US)
14:30 Labor costs – Second quarter VLP (USA)
15:45 Chicago Purchasing Managers Index – July (USA)
16:00 Consumer Confidence Michigan – July (USA)
Coen Grutters is editor of IEX. The information in this column is not intended as professional investment advice or as a recommendation to make certain investments. Click here for a summary of the IEX editors’ investments.