Futures ticked higher in early trading as stocks tied to the economic recovery led the way.
This morning we’ll go over Q2 numbers for Morgan Stanley (MS) who was the last big bank to report its earnings yesterday, showing impressive results. Other stocks, however, such as AMC Entertainment (AMC) and United Health (UHC), have suffered falls. How could their earnings reports affect shareholders and potential investors?
Plus, Biogen (BIIB) took a significant hit for seemingly specific reasons. What does it mean for the future of the stock’s profitability?
And, Netflix (NFLX) has decided to dabble in the gaming world, which would certainly prove interesting. Learn more about the details of these eventful stories from Wall Street below.
Morgan Stanley’s earnings surpassed forecasts to end the week’s round of big banks’ earnings reports…
On Thursday, Morgan Stanley (MS) announced earnings and sales for the second quarter, exceeding analysts’ forecasts for equity and investment banking strength. The bank’s strength has been historically its equity-trading franchise, the largest in the world. In contrast, competitor banks report significant slowdowns in fixed income trade revenue — a trend that snared Morgan Stanley’s bond traders, too. In the second quarter, the firm excelled with revenues of $2.83 billion, above $400 million compared to analysts’ expectations. The shortfall in fixed income, which generated $1.68 billion, was lower than the expectation of $2 billion. Its earnings report came in as $1.85 per share, compared to $1.65 per share predicted by analysts polled by Refinitiv. Their reported overall revenue came in at $14.8 billion, vs. a forecast of $13.98 billion.
The corporate securities division of Morgan Stanley was a mixed bag. Investment- Banking sales rose by 16% and increased the number of fusions and purchases of equities securities completed. That goes against last year when capital markets’ activities were momentarily stopped due to the coronavirus epidemic. But, like banking, Morgan Stanley witnessed a significant decline in trading revenues earlier this week. Correct revenue trading has fallen by 45%, with equity sales falling by 8%.
CEO James Gorman has developed the bank’s wealth management division into one of the world’s most extensive through a series of smart acquisitions. He also assisted in the firm’s trading operations recovery and continued to manage the firm’s merger advising department. Gorman stated in the earnings statement, “The firm delivered another robust quarter, with contributions from all of our businesses” He went on to say, “With our transformed business model providing more stable and durable earnings, we have doubled our dividend and announced a $12 billion buyback as we move to return our excess capital to shareholders.” Morgan Stanley is the sixth and last of the six major U.S. banks to publish second-quarter results. By releasing money sooner for loan losses, JP Morgan Chase (JPM), Bank of America (BAC), Wells Fargo (WFC), and Citigroup (C) also exceeded the earnings projections of analysts. Goldman Sachs (GS) topped forecasts based chiefly on solid advisement.
Biogen’s stock has plummeted after two major American hospitals rejected an Alzheimer’s drug…
According to reports, two big hospitals have refused to provide Biogen Inc’s (BIIB) Alzheimer’s therapy Aduhelm. During a dispute over the drug’s efficacy and whether the FDA made mistakes in authorizing the treatment, the Cleveland Clinic and Mount Sinai Health System in New York declared they would not administer it to patients. The Cleveland Clinic’s pharmacy will not stock the medication, and infusions will not be available. Doctors can still prescribe the medication, but patients will have to get their infusions at a different location.
Biogen prices the medicine $56,000 a year, while one health scientist claimed it would likely cost a typical patient more. A Biogen spokesperson stated clinics should contact Biogen for assistance with patients who are refused access to Aduhelm. At the market session of Thursday’s final check, the BIIB shares decreased by 6.90% to $327.76.
The movements of clinics come as some health insurers also limit access to therapy — a medicine for a terrible illness like Alzheimer’s that has few efficient therapies, uncommon but far from ubiquitous. Although some doctors were keen to start prescribing the newly approved medication, others questioned the FDA for clearing the medication before the study showed it was working. The critics also raised questions about whether the advantages of the medicine, which were small in the tests, value the risks of adverse events such as brain hemorrhage requiring constant physician monitoring.
United Health Group (UHC), with customers resuming elective medical care that the pandemic had postponed, has seen its profits for the second quarter decrease more than three-thirds by over a year ago. However, the United Health Group has achieved a high projection of $4.70 per share concerning the estimated consensus of $4.43 in the top and bottom lines. As for AMC Entertainment (AMC), after having dropped for the fourth straight day and eighth time in nine sessions on Wednesday, it again dropped 6.2% more in the premarket. Yesterday’s skid slump was limited to 15%, and the overall loss in the session amounted to around 41%.
Netflix (NFLX) is attempting to outperform the competition by introducing video games…
With over 200 million customers, Netflix is the king of streaming. However, it appears that the platform has now set its eyes on a new type of entertainment: video games. According to Bloomberg, the business will start offering video games on its service within the following year. According to the source, video games would be added to the platform as a new genre, comparable to documentaries and stand-up specials. Bloomberg did not go into detail but stated that Netflix would not charge an additional fee for access to the games.
Business is flourishing with Netflix atop the streaming mountain in this department. It’s growing but is beginning to appear a tad late. The streaming service in April, after adding 4 million in the first quarter of 2021, has 208 million users worldwide. This figure was also somewhat lacking in its expectations and the next quarter; the firm reports next week. Making the connection to something already of interest to many subscribers, Netflix will release a video game based on its successful original series “Stranger Things.” The firm has been seeking to diversify, and video games might be a clever method to achieve this.
Mike Verdu has been appointed Netflix’s Vice President of Game Development to support the company’s gaming initiatives. Verdu has a strong track record in this field, having previously served as the vice president of content at Facebook (FB) Reality Labs, where he was in charge of the company’s virtual reality products. He was also the senior vice president of mobile at Electronic Arts (EA), one of the gaming industry’s most recognizable names. Netflix has proven time and time again that it can succeed by providing new types of entertainment to its viewers.
