Oil, Twitter, Salesforce, US Indices – Weekly News Digest (29.11.21 - 03.12.21)
Today, we will talk about how oil prices have changed recently, and what factors caused this change; what made Twitter and Salesforce shares fall; what shares Cathie Wood hastened to buy, and what made US indices fall.
Twitter shares fall following Jack Dorsey's resignation
On 29 November 2021, Twitter announced that its co-founder, Jack Dorsey, was stepping down from the role of CEO. He would now be focusing on his other company, Square, which announced its renaming to Block on 2 December 2021.
Twitter shares (NYSE: TWTR) were initially positive about Jack Dorsey leaving the company and Parag Agrawal replacing him as CEO – they grew by 11% during the trading session on 29 November 2021. However, closer to the end of the session, the quotations changed direction, and the day ended with a decline of 2.74% to $45.78.
The negative trend persisted during the period from 29 November to 2 December 2021, with the shares losing 9.4%, reaching $42.65. They had been falling for five sessions in a row.
Cathie Wood buys more than 1 million Twitter shares
On 30 November, Ark Innovation ETF, Ark Next Generation Internet ETF, and Ark Fintech Innovation ETF investment funds – managed by Cathie Wood – took advantage of the noticeable decline of Twitter's shares and bought almost 1.1 million shares of the tech company. This new purchase amounts to 7.2% of the overall number of shares in the funds.
Oil prices: steep falling changes for growth
Black gold started falling last week after investors were anxious and alarmed at the prospect of the new coronavirus strain, and its possible negative impact on the recovering economy and oil demand. As a result, Brent and WTI shares dropped by almost 12%.
On 30 November and 1 December 2021, February Brent futures kept falling and lost 6.22% of their price, reaching $68.87. January WTI futures followed, losing 6.26%, amounting to $65.57.
On 2 December 2021, oil somewhat recovered while in wait for the results of the OPEC+ conference: Brent grew by 1.16% to $69.67, while WTI grew by 1.42% to $66.5.
What OPEC+ agreed on
The market hoped for the OPEC+ countries to react to the fears around the Omicron strain and the falling of oil by changing course from its current output plan of increasing oil production by 400 thousand barrels per day each month. However, the technical committee decided to proceed according to the initial plan.
The statement made by the head of the Fed sent US indices down
On 30 November 2021, the head of the US Federal Reserve System, Jerome Powell, said that in December the regulator would consider finishing the bond-buying programme sooner to stimulate the national economy.
On the same day, US stock indices reacted by falling. On Tuesday, S&P 500 (SOX) closed the trading session with a decline of 1.9% to 4,567 points, the Dow Jones Industrial Average (DJI) dropped by 1.85% to 34484.18 points, and NASDAQ Composite (IXIC) fell by 1.55% to 15537.7 points.
Omicron affects US indices
On 1 December 2021, the first case of the new COVID-19 strain was registered in the US. This made the US government consider imposing additional restrictions, including on flights.
This news sent stock indices further down: S&P 500 dropped by 1.18% to 4513.04 points, the Dow Jones Industrial Average fell by 1.34% to 34021.61 points, and NASDAQ Composite dropped by 1.83% to 15254.1 points.
Salesforce strong quarterly report did not save its shares from falling
On 30 November 2021, after trades closed, Salesforce reported its Q3 fiscal financial 2022 figures. Salesforce is an American company that designs CRM systems and provides cloud computing services to corporate clients. It also owns the Slack messenger.
In the period of August to October 2021, Slack revenue increased by 27% compared to the statistics of the same quarter last year, reaching a high of $6.86 billion. This result was better than the forecasted $6.8 billion.
Revised earning per stock reached $1.27, growing by 27%. Experts had expected a more modest $0.92. However, unlike the report, Salesforce's forecast for the current quarter failed to exceed the expectations of Wall Street analysts.
The company plans for the revenue in Q4 of financial 2022 to reach $7.22 - $7.23 billion and the EPS to reach $0.72 - $0.73. However, analysts hope for $7.22 billion and $0.81, respectively.
It seems that the weak forecast, as well as the news about Bret Taylor in the role of the co-director of Salesforce alongside the current CEO, Marc Benioff, had compromised investor trust in the company.
On 1 December 2021, the day after the announcement about Bret Taylor's appointment and the publishing of the quarterly report, the shares of Salesforce.com (NYSE: CRM) dropped by 11.74% to $251.5.
Twitter shares have fallen for four days in a row since Jack Dorsey resigned from his role as CEO. Cathie Wood's funds seized the opportunity to buy more than 1 million Twitter shares.
Even though the Omicron strain is affecting oil prices, OPEC+ countries decide to proceed according to plan with increased production in January.
Jerome Powell's statement and the news about the first case of the Omicron strain in the US sent American stock indices down, recording new lows.
Salesforce filed a strong report for Q3 of financial 2022 and a weak forecast for December-January, resulting in the shares dropping by almost 12%.