NASDAQ Futures Down More Than 1.5%, Xi Jinping Pushes Out Youth League Members From Politburo, Spotify Users Up 20% YoY
Aa
Share
Summary:
- NASDAQ weighed down by poor MSFT & GOOGL earnings.
- Xi's years-long campaign to destroy the faction was successful.
- Spotify surpassed expectations in terms of both paid and free user growth.
NASDAQ down more than 1.5% on Tuesday
On Wednesday, Nasdaq futures dropped more than 1% after poor financial statements from tech titans Alphabet (NASDAQ:GOOGL) and Microsoft prompted losses at other megacap firms and fueled concerns about slowing economic growth. While Alphabet, the parent company of Google, reported disappointing ad sales and warned of a slowdown in advertising expenditure, Microsoft Corp (NASDAQ:MSFT) reported its lowest sales growth in five years and anticipated second-quarter revenue below Wall Street estimates.
In premarket trade, the businesses' shares plummeted 5.7% and 6.0%, respectively, while those of Apple (NASDAQ:AAPL) and Amazon.com (NASDAQ:AMZN), who are expected to release earnings this week, dropped 3.7% and 0.6%.
The disappointing results come after Snap Inc. (NYSE:SNAP) issued a warning last week over sluggish ad demand and a string of mixed earnings reports, which have added to concerns that the economy is being negatively impacted by decades-high inflation and ad-hoc interest rate hikes to combat it.
âš ï¸BREAKING:
— Investing.com (@Investingcom) October 26, 2022
*NASDAQ 100 FUTURES TUMBLE 1.8% AS GOOGLE, MICROSOFT SINK AFTER EARNINGS$QQQ $GOOGL $MSFT pic.twitter.com/2rd4B4bJjP
China’s new president pushes out youth league members
The three most notable absences from China's new Communist Party leadership have one thing in common: they all rose through the ranks of the Youth League and were regarded as representatives of a once-dominant clique, whose influence Xi Jinping has now successfully quashed.
Even the larger Central Committee was bypassed as Xi installed supporters in key party positions during the recent twice-a-decade leadership reshuffle. Premier Li Keqiang and Vice Premier Wang Yang, both 67 and young enough to be re-appointed to the elite seven-member Politburo Standing Committee, were left out.
Hu Chunhua, a fellow vice premier and former high flyer who, at 59, had been considered a prospect for premier and, at one point, even a potential future president, failed to make it to the 24-man Politburo.
Analysts said the omissions demonstrate Xi's years-long campaign to destroy the faction was successful.
China's Xi deals knockout blow to once-powerful Youth League faction https://t.co/g47pd77mil pic.twitter.com/uqSDoVgG2g
— Reuters (@Reuters) October 26, 2022
Spotify up 20% on Users
Spotify surpassed expectations in terms of both paid and free user growth in the third quarter, pointing to the region's strength in particular.
A net addition of 23 million members, or 20% more than Spotify's previous projection, brought the total number of monthly active users (MAUs) to 456 million, which is the company's highest Q3 growth to date. The number of Spotify Premium subscribers increased to 195 million, up 7 million during the time (about 1 million more than expected) and 13% annually.
Ek stated on the earnings call that Spotify is considering increasing the cost of its U.S. subscription plans in response to price increases by YouTube Premium and Apple Music. “[I]t’s something we will [discuss] with our label partners,” he said. “I feel good about this upcoming year, and what it means about pricing for our service.”
Spotify (SPOT) reported a quarterly loss of $0.99 per share vs the $0.88 loss that the Zacks Consensus Estimate had predicted. This contrasts with a loss of $0.48 per share in the prior year. These numbers have non-recurring expenses taken into account.
This quarterly report shows a -12.50% profits surprise. This music streaming service operator surprised analysts by posting a loss of $0.91 per share during the most recent quarter when it was anticipated that it would lose $0.68, a difference of -33.82%.
The management's remarks on the earnings call will be largely responsible for determining if the stock's current price movement based on previously revealed numbers and anticipated future earnings can be sustained.
Compared to the S&P 500's -20.3% decrease since the start of the year, Spotify share prices have fallen by around 59.6%.
Spotify reaches 456M total monthly users in Q3, up 20% YoY and topping expectations https://t.co/vRe14ATA7s via @Variety
— Yahoo Finance (@YahooFinance) October 25, 2022
CEO also said subscribers can expect price hikes for the service sometime in 2023. $SPOT shares are down 5% in after market trading.
Sources: finance.yahoo.com, twitter.com, reuters.com, investing.com
