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ASX set for gains as US shares end mixed, Snapchat smashed

07:21 UTC+8 May 11, 2017 | Sue Lannin

Snapchat app on a mobile phone. (ABC News)

Snapchat may be a popular social media app, especially among teenagers, but its parent company, Snap Inc, is on the nose with investors after it made a $US2.2 billion loss for the first quarter.

Markets at 8:30 am (AEST):

  • ASX 200 +0.20 pc to 5,883
  • AUD: 73.50 US cents, 56.82 British pence, 83.97 Japanese yen, 67.61 euro cents, $NZ1.0763
  • US: S&P 500 +0.11pc to 2,400, Dow Jones -0.16pc to 20,943, Nasdaq +0.14pc to 6,129
  • Europe: Euro Stoxx flat at 391, FTSE +0.59pc to 7,385, DAX +0.07 pc to 12,758
  • Commodities: Gold flat at $US1,218/ounce, Brent crude oil +3.2pc to $US50.28, iron ore flat at $US60.75

That is despite a nearly 300 per cent increase in revenue over the year to $US149.6 million.

Daily active users rose from 122 million for the same time last year to 166 million for the quarter.

Snap's shares plunged more than 20 per cent in afterhours trade.

Snapchat is facing increased competition for users from Facebook and Facebook-owned Instagram, which has 200 million daily users.

That is as its social media rivals increasingly copy its Snapchat stories format, which allows users to create an edited sequence.

Snap chief executive Evan Spiegel, who is engaged to Australian model Miranda Kerr, told an investor conference call that the company was working on improving the Snapchat app for Android phones.

Nearly one third of new users over the quarter were on Android phones.

Other US stocks were mixed after President Donald Trump fired the head of the FBI, James Comey.

The Nasdaq hit another record high thanks to a rally by computer graphics processor maker Nvidia, after it reported that quarterly revenue jumped by nearly half.

Major internet and cloud services companies such as Facebook, Google, Amazon, IBM, Microsoft and Alibaba Group use Nvidia's graphics processing technology.

Its shares jumped 18 per cent to $US121.29.

A rise in oil prices saw energy firms rally as US stockpiles fell.

Oil prices have fallen recently on worries that OPEC and other major oil producers will not be able to limit production and hold up prices.

But investors were disappointed with first quarter profit results from the Walt Disney Company.

The entertainment giant said profit at its cable networks fell slightly because of higher programming costs and a fall in subscribers at sports channel ESPN, which hurt revenue.

That was partially offset by a rise in revenue at Disney Channels and Freeform.

Overall, net income rose 11 per cent from the same time in 2016 to $US2.4 billion for the second quarter of 2017.

Its stock fell 2.4 per cent in after-hours trading.

ECB says bond buying program to stay for 2017

In Europe, shares closed near two-year highs in the wake of centrist Emmanuel Macron's victory in the French presidential election.

European Central Bank chief Mario Draghi spoke to the Dutch Parliament and gave an upbeat assessment of the current and expected business climate saying it was "clearly improving" in the euro area.

He said the ECB would continue its bond buying program in full in 2017.

It is expected the ECB could adjust its views on inflation next month, with Mr Draghi saying it was too early to say that inflation was picking up despite signs that the economy is improving.

"Incoming data confirm that the cyclical recovery of the euro area economy is becoming increasingly solid and that downside risks have further diminished," he said.

"Nevertheless, it is too early to declare success.

"Underlying inflation pressures continue to remain subdued and have yet to show a convincing upward trend."

Staying on central banks, the Reserve Bank of New Zealand left official rates on hold at 1.75 per cent.

ANZ said the tone of the RBNZ's communication remained cautious.

AustraliaPlus


 

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