Originally published by Rivkin Securities
US stocks declined on Monday with the tech heavy Nasdaq 100 the worst hit. Facebook (NASDAQ:FB) shares dropped a further 2.2% to a three-month low, following the company’s disappointing earnings result last week. Netflix (NASDAQ:NFLX) was also hard hit, declining 5.7%, and reaching two-month lows as the company also reported disappointing second quarter results. The problem for Netflix is that it invests a large amount of cash into new content such that it is not yet cash-flow positive and may not be for the foreseeable future.
ASX 200 futures are holding up well this morning considering international leads and are down just 2 points.
On Friday night, the first estimate of US second quarter GDP was released which showed growth of 4.1% for the quarter. This was a great result and represents the strongest quarterly growth rate since the last quarter of 2014. The only negative to the release was the downward revision of the prior quarter’s growth rate to 2.0% from 2.3%.
This week, three of the major central banks will meet to decide interest rates. First up the Bank of Japan meets today although it is expected to keep rates unchanged at -0.1%. Nevertheless, markets fear that the drastic stimulus program implemented by the central bank will be pared back slightly in an effort to make it more sustainable. Later this week, the Federal Reserve board will also meet to decide interest rates although the consensus is that no change will be made at this meeting. On Thursday, the Bank of England is expected to hike rates by another 25 basis points which would bring the official interest rate up to 0.75%.
Data Releases:
- Japan Interest Rate Decision 12:00pm AEST