Research Market strategy
By Swissquote Analysts
Published on 20.07.2021
Morning news

Robinhood Expects IPO to Value Trading App at About $33 Billion

Topic of the day

Trading app Robinhood Markets Inc. expects its coming initial public offering to give it a market value of about $33 billion, lower than the level previously anticipated. The Menlo Park, Calif., company plans to sell about 52.4 million shares in the offering, and other stockholders would sell about 2.6 million, at a price between $38 and $42 each. At the midpoint of the offering range, Robinhood would raise about $2 billion. Millions of individual investors flocked to Robinhood this year to ride the rally in meme stocks like GameStop Corp. and cryptocurrencies like dogecoin. Its IPO is one of the most anticipated of the year and was expected to value the company at $40 billion or more. Robinhood’s growth continued into the second quarter, driven by new users opening accounts and an increase in options and cryptocurrency trading. The company expects to report second-quarter revenue between $546 million and $574 million, more than double what it generated a year earlier. The number of funded Robinhood accounts increased by 4.5 million between the end of March and the end of June, reaching 22.5 million in total.

Swiss stocks

The share prices on the Swiss stock exchange went sharply south on Monday in line with the neighboring stock exchanges in Europe, but also the US stock exchanges. First and foremost, the growing concerns about the consequences of the corona pandemic for the global economy were named as a negative factor, especially since the number of new infections is rising again noticeably worldwide. The SMI lost 1.4 percent to 11,862 points. In the 20 SMI stocks, there were 19 losers and one winners, Givaudan. 42.53 (Friday: 32.04) million shares were traded. The fact that the minus of the SMI was not as big as in other places in Europe, where the losses were sometimes well over 2.5 percent, was due to the comparatively stable index heavyweights. Nestle (-0.2%), Roche (-0.6%) and Novartis (-1.6%) are considered defensive and not very cyclical. Lonza (-0.2%) and Alcon (-0.5%) also held up comparatively well with their pharmaceutical appeal. Shares from the insurance sector were far ahead on the losing side. They were additionally burdened by the claims for damages that could potentially be made by the insurers after the severe weather disaster in Germany and Belgium. According to the analysts at Berenberg, the most affected companies in Switzerland include Baloise (-2.5%), Helvetia (-4.2%) and Zurich Insurance (-2.6%). According to Berenberg, reinsurers are likely to face costs of up to $ 3 billion. With a minus of 4.3 percent, Swiss Re were the weakest SMI value. However, a downgrade to "hold" from "buy" by Commerzbank may also have played a role.

International markets


European stocks skidded on Monday, as investors worried about the progression of the Delta variant of the coronavirus and the rise in inflation in the United States. In Paris, the CAC 40 and the SBF 120 each sold 2.5%. In Frankfurt, the DAX 30 fell 2.6%, while in London, the FTSE 100 was down 2.3%. The Stoxx Europe 600 index lost 2.3% to 444.3 points on worries about the inability of major economies to return to normality as the COVID-19 pandemic lingers even with the emergence of vaccines. Airline stocks were among the worst performers. British Airways owner International Consolidated Airlines Group (-5.2%) and easyJet (-6.6%) both dropped significantly in London after the U.K. said quarantine rules would remain in place for travelers returning from France. Other decliners included cruise operator Carnival, plane maker Airbus, and engine maker Safran. Among other stocks, Paris-listed Vivendi fell 1.5%. Pershing Square Tontine, a blank-check company led by hedge-fund manager Bill Ackman, said it had dropped plans to purchase a 10% stake in Universal Music Group. Mr. Ackman's Pershing Square said it would take a large stake in Universal, which is majority owned by Vivendi, instead. Italian luxury fashion house Ermenegildo Zegna will go public on the New York Stock Exchange later this year as part of a tie-up agreement with special-purpose acquisition corporation Investindustrial Acquisition. Shares of the SPAC, whose chairman is former UBS CEO Sergio Ermotti, added 2% before the bell in New York. In England, the lifting of many restrictions, dubbed "Freedom Day," was also coupled with new restrictions on travel to France, on worries about the beta variant of the coronavirus that causes COVID-19.

United States

The Dow Jones Industrial Average declined more than 700 points on Monday—its worst session since October—as anxiety mounted over the spread of the Delta coronavirus variant and its potential impact on the global economy. Investors sheltered in the safety of government bonds, and oil prices fell after the Organization of the Petroleum Exporting Countries and a Russia-led group of big producers agreed to raise production. The moves were reminiscent of trading patterns that prevailed in the early days of the pandemic. Investors sold shares of companies directly affected by restrictions on movement and business, while buying government bonds and stocks that stood to benefit from renewed lockdowns. American Airlines Group, United Airlines and cruise operator Carnival all dropped between 4% and 6%. Energy producers Marathon Oil and Diamondback Energy both fell more than 5%. Stocks that climbed included supermarket chain Kroger, which rose $1.71 a share, or 4.3%, to $41.07. Online crafts marketplace Etsy gained $5.91, or 3.2%, to $190.33. The Dow ended the day down 725.81 points, or 2.1%, at 33962.04, its worst day in almost nine months. The S&P 500 fell 68.67, or 1.6%, to 4258.49. The technology-heavy Nasdaq Composite declined 152.25, or 1.1%, to 14274.98, its fifth consecutive losing session. Monday’s losses marked an acceleration after U.S. stock indexes retreated last week, snapping a three-week winning streak. Despite Monday’s selloff, the S&P 500 is up more than 13% this year and closed at a record just one week ago. Inflation accelerated to a 13-year high in the U.S. in June. All 11 sectors of the S&P 500 dropped Monday. Energy and financials were the worst-performing groups. One bright spot was Five9, which jumped $10.52, or 5.9%, to $188.12. Zoom Video Communications agreed to buy the provider of cloud-based customer-service software in a deal valuing the firm at $14.7 billion. Zoom shares shed $7.77, or 2.2%, to $354.20. Looking ahead, investors will be monitoring corporate earnings this week for signs of how companies are faring amid the revival of economic activity. Air carriers American and United are among the hundreds of companies set to report quarterly results this week, along with Intel, Netflix and Chipotle Mexican Grill.


Following very weak US guidelines, the stock exchanges in East Asia lose ground on Tuesday. In Tokyo, the Nikkei 225 index lost 1.0 percent to 27,387 points, additionally burdened by the stronger yen. With a current minus 0.5 percent, the composite index in Shanghai is holding up again comparatively well - although the Chinese central bank has confirmed the reference interest rate for corporate and personal loans at the current level. The Hang Seng Index in Hong Kong is falling by 1.2 percent.


The yield on 10-year Treasury notes fell to 1.181 - its lowest level since February - from 1.30% Friday.


Deutsche Bank raises Rational Corp target to EUR 629 (490) - Sell
BoA increases target Carl Zeiss to EUR 105 (89) - Traders
Berenberg raises target Dic Asset to EUR 19.50 (18.50) - Buy

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