By Swissquote Analysts
Comcast’s NBCUniversal, Google Among Front-Runners to Partner with Netflix to Help Create Ad-Supported Tier
Topic of the day
Comcast Corp’s NBCUniversal and Alphabet Inc.’s Google have emerged as top contenders to partner with Netflix Inc. and help the streaming giant create an advertising-supported tier of its service, according to people familiar with the matter. Netflix, which is hoping to boost revenue by selling ads around its programming, is still in the early stages of developing the strategy and has explored a range of tie-ups in recent weeks. A partnership with NBCUniversal would likely be exclusive, the people familiar with the matter said. Comcast’s video ad unit, FreeWheel, would supply technology to help serve up ads, while NBCUniversal’s ad sales team would help sell ads in the U.S. and Europe, the people said. A partnership with NBCUniversal would likely involve revenue-sharing, and one issue might be whether Netflix will be guaranteed a certain amount of revenue, they said. Linda Yaccarino, chairman of global advertising and partnerships for NBCUniversal, would be a major player in such a partnership.
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The Swiss stock exchange worked its way into positive territory in the course of Wednesday afternoon and closed somewhat firmer, after having recorded losses earlier. Initially weighed down by recession worries, the upward trend on Wall Street lifted the SMI into positive territory. The SMI gained 0.5 per cent to 10,528 points. Among the 20 SMI stocks, there were 10 price losers and 10 price winners. A total of 35 (previously: 29.64) million shares were traded. The index giants Nestle (+1.8 per cent) and Roche (+1.5 per cent) were responsible for the gains in the leading index. The third heavyweight Novartis recorded moderate losses of 0.3 per cent. In contrast, cyclicals, which were still sought after the previous day, came under pressure with concerns about the economy. ABB lost 2.2 per cent, Holcim 0.9 per cent and Sika 0.1 per cent. But technology stocks such as Logitech (-1.9 per cent) and AMS-Osram (-1.8 per cent) were also down. Banking stocks again trended inconsistently: Credit Suisse lost 0.5 per cent and UBS gained 0.3 per cent. Insurers such as Zurich Insurance (-0.6%) or Swiss Re (-0.3%) were not sought after.
European stock indices closed lower on Wednesday but managed to limit their losses at the end of the session as Federal Reserve (Fed) Chairman Jerome Powell spoke before the US Senate. The Stoxx Europe 600 index fell 0.7% to 405.7 points. In Paris, the CAC 40 and the SBF 120 lost 0.8% each. In Frankfurt, the DAX 40 dropped 1.1%, and the FTSE 100 in London fell 0.9%. Rolls-Royce Holdings PLC is offering U.K. staff a one-time payment of £2,000, equivalent to about $2,450, hoping the bonus will help ease pressure from union officials and employees over rising inflation while keeping a lid on the jet-engine maker’s costs ahead of an uncertain economic future. The move is one of many approaches companies are taking to address soaring inflation that has unions and workers in many parts of the world demanding higher pay. Umicore SA said Wednesday that it aims to double its revenue by 2030 as part of a new strategy released ahead of a capital markets day. The Belgian materials and recycling company said it targets a margin on earnings before interest, taxes, depreciation, and amortization of more than 20% in the period, alongside a phased investment of around 5 billion euros ($5.27 billion) between 2022 and 2026.
U.S. stocks edged lower Wednesday after Federal Reserve Chairman Jerome Powell acknowledged that the central bank's rate-raising campaign could cause an economic downturn. Investors have been watching closely for signs of how the Fed will proceed in its campaign to bring down high inflation by raising interest rates. Central bank officials last week agreed to raise their benchmark interest rate by 0.75 percentage point, their largest increase since 1994. The S&P 500 notched its worst week since March 2020. On Wednesday, the broad U.S. stock index fell 4.90 points, or 0.1%, to 3759.89. The Dow Jones Industrial Average slipped 47.12 points, or 0.2%, to 30483.13. The tech-heavy Nasdaq Composite declined 16.22 points, or 0.1%, to 11053.08. The move lower in crude prices dinged shares of energy companies. Shares of Occidental Petroleum declined $2.10, or 3.6%, to $55.77. Halliburton shares fell $1.46, or 4.4%, to $32.09. The S&P 500's energy sector dropped 4.2% on the day. Investors are worried that worsening economic data could precede a slowdown in U.S. growth, limiting nonessential spending. Economists surveyed by The Wall Street Journal have substantially raised the probability of recession, now putting it at 44% in the next 12 months, a level usually seen only on the brink of or during actual recessions. Shares of cryptocurrency exchange Coinbase Global declined $5.58, or 9.7%, to $51.91.
The East Asian stock markets are mixed on Thursday. The Chinese stock exchanges in Shanghai and Hong Kong are up by up to almost 1 per cent in Hong Kong, in Tokyo the trend is just about maintained, the Nikkei index is at 26,115 points. The South Korean city of Seoul (-1.4 per cent) is once again on a downward trend, after the Kospi was initially held up by bargain buying before fears of stagflation spread again. Sydney (+0.1%), as often more, followed the US lead.
Investors sought assets viewed as safer to hold Wednesday, such as U.S. government debt. In bond markets, the yield on the benchmark 10-year U.S. Treasury note declined to 3.155% from 3.304% Tuesday. Yields fall when prices rise.
UBS downgrades Royal Mail to Neutral (Buy) – Target 280 (420) p
JPM lowers Voestalpine to Underweight (Overweight) – Target EUR 27.50 (42.50)
Barclays lowers Enel target to EUR 8.50 (9.20) – Overweight
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