Weekly Stockwatch: US Earnings Season, JD Europe Stores, Boeing Deliveries & More

US Banks Q4 Results

Delta Airlines announced on Thursday its financial results for the fourth quarter of 2021 as the earnings season gets underway, but markets were mostly anticipating the banking sector which begun reporting today, with JP Morgan standing out.

The banking giant reported Q4 Revenue of $30.35 billion, slightly above Q4 2020 and slightly below prior quarter.

Earnings came in at 3.33/share, marking a decline of a bit more than 10% compared the year-ago and prior quarter figures. [1]

JP Morgan released $1.8 billion of reserves, while its CEO commented that "Credit continues to be healthy with exceptionally low net charge-offs, and we remain optimistic on U.S. economic growth".

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JPM.us strengthened around 25% last year and is upbeat this week, but today's result may not be good enough for a positive open.

JD.com Enters Europe

JD.com is an e-commerce and technology company and China's largest online retailer, founded in 2004.

On Monday, it announced the opening of it first two physical retail stores in Europe, under the brand name Ochama. They are robotic pick-up shops and the firm expects to open more soon. [2]

Customers can either visit the pick-up shop showroom or they can also choose the next-day home delivery service without going to the store.

This is seen as challenge to Amazon, which recently opened its first physical stores in the UK last year.

JD.us reacted higher on the news and made a solid start to the week, setting new January highs on Wednesday (78.71), but dropped on Thursday, as the technology sector suffered.


Past Performance: Past Performance is not an indicator of future results.

Nvidia Pushes Back Against Regulators

Nvidia's acquisition of Arm, has drawn regulatory scrutiny across the globe, since it was announced in September 2020.

In early December, the US Federal Trade Commission (FTC) sued to block the deal, while UK's Competition and Markets Authority (CMA) escalated its probe to Phase 2, in mid-November.

The US company's response to the CMA was published at the start of the week, with Nvidia accusing the opponents of the deal that they "romanrticize" Arm's past and "either ignore or disparage Arm's most powerful competition". [3]

Delivery Hero to Break Even

Delivery Hero is the world's leading local delivery platform, operating its service in around 50 countries across Asia, Europe, Latin America, the Middle East and North Africa. It is Headquartered in Berlin, Germany and listed on the DAX since 2020.

The firm announced on Monday that it expects adjusted EBITDA break-even during the second half of the current year and generate between EUR 0 and 100 million in adjusted EBITDA in Q4 2022. [4]

At the end of December, it had announced an agreement to become the majority holder in Spanish delivery app Glovo, offering more information on the deal and the company with Monday's release.

Glovo operates in 25 countries and had an 80% y/y growth in organic Gross Transaction Volume last year.

DHER.de had a poor fourth quarter and January is also negative. The aforementioned news helped it on Tuesday, but loses around 5% this week.


Past Performance: Past Performance is not an indicator of future results.

Automakers in Focus

Automotive companies stayed in the spotlight this week, as hot electric vehicle (EV) startup Rivian, missed its production target - according to Monday's filing with the US Security and Exchange Commission (SEC).

Traditional automakers from Europe drew attention with their sales figures and BMW stood out, as it posted record 2021 and surpassed rival Mercedes-Benz.

Boeing Deliveries

Boeing announced its Q4 and full year deliveries on Tuesday, ahead of the January 26 financial results.

The Chicago based firm delivered 99 commercial airplanes in the fourth quarter and 263 during the entire 2021 - an important increase compared to the 157 planes it had delivered in 2020. [5]

Despite this noteworthy rise, Boeing is still far behind European rival Airbus, which had announced last week the delivery of 611 commercial aircrafts during last year. [6]

Boeing still recovers from the ban of its 737 Max, which was lifted in the US by the FAA towards the end of 2020, but the plane remains grounded in China. In December, The Civil Aviation Administration of China (CAAC) had released a directive that was seen as the first step to lifting the ban.

According to a report from Bloomberg on Thursday, the jet could restart service within weeks. [6]

These news have helped BA.us run a positive week, with gains in excess of 3% (prior to Friday's open).


Past Performance: Past Performance is not an indicator of future results.

Next Week (January 17-21)

Monday will be a holiday for US markets, but after that, investors will be monitoring the earnings season that has gotten underway. Netflix is the one that stands out, as it reports on Thursday, while from the rest, Bank of America will draw our attention,

Nikos Tzabouras

Senior Market Specialist

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 14 Jan 2022 https://www.jpmorganchase.com/content/dam/jpmc/jpmorgan-chase-and-co/investor-relations/documents/quarterly-earnings/2021/4th-quarter/ae462261-4964-48c6-b947-4b69963d1143.pdf

2

Retrieved 14 Jan 2022 https://jdcorporateblog.com/jd-com-launches-robotic-shops-ochama-in-the-netherlands/

3

Retrieved 14 Jan 2022 https://assets.publishing.service.gov.uk/media/61d81a458fa8f505953f4ed7/NVIDIA-Arm_-_CMA_Initial_Submission_-_NCV_for_publication__Revised_23_December_2021_.pdf

4

Retrieved 14 Jan 2022 https://www.deliveryhero.com/newsroom/flash-update-2022/

5

Retrieved 14 Jan 2022 https://investors.boeing.com/investors/investor-news/press-release-details/2022/Boeing-Announces-Fourth-Quarter-Deliveries/default.aspx

6

Retrieved 14 Jan 2022 https://www.airbus.com/en/newsroom/press-releases/2022-01-airbus-achieves-2021-commercial-aircraft-delivery-target

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