Oracle Stock Extends Its Rally. Earnings Got a Boost From AI.
Topic of the day
Oracle shares extended their rally Monday after the enterprise software company posted better-than-expected quarterly results. Shares were up 3.5% in after-hours trading. The stock closed up 6.1% in the day’s regular session. Heading into the announcement, investors were focused on the outlook for the company’s cloud business, which is getting a boost from generative AI companies. For the fiscal fourth quarter ended May 31, Oracle reported revenue of $13.8 billion, up 17% as reported and 18% in constant currency. Oracle had projected growth of 17% to 19% adjusted for currency. Non-GAAP profit was $1.67 a share, a dime above Wall Street’s consensus. Results were driven by a 54% growth in cloud-related revenue, or 55% in constant currency, well above Street estimates of about 50%. Under generally accepted accounting practices, Oracle earned $1.19 a share. Oracle noted that unfavorable exchange rates reduced non-GAAP profit by three cents a share. Oracle said its cloud-infrastructure business in the quarter had revenue of $1.4 billion, up 76% as reported or 77% adjusted for currency. Cloud applications revenue were $3 billion, up 45% or 47% adjusting for foreign exchange.
Looking for New Structured Product Ideas?
The Swiss stock market ended modestly higher on Monday after staying positive right through the day's session. Investors reacted to some corporate news in addition to looking ahead to central bank meetings. The U.S. Federal Reserve, the European Central Bank, People's Bank of China and the Bank of Japan, are all scheduled to announce their monetary policies this week. The benchmark SMI ended with a gain of 46.83 points or 0.42% at 11,301.25, after moving in a tight range between 11,296.43 and 11,343.18. Partners Group rallied more than 3%. Sika and Richemont both surged about 2.25%. Holcim climbed 1.34%, while Credit Suisse, Givaudan, ABB, Geberit and Logitech gained 0.75 to 1.2%. UBS Group gained 0.82% after saying it has completed the acquisition of domestic rival Credit Suisse Group AG. Shares of the latter gained 1.1%. Novartis ended higher by 0.75% after it agreed to acquire Seattle-based biotech firm Chinook Therapeutics for up to $3.5 billion. Swisscom tumbled 1.7%. Roche Holding declined 0.7%, while Alcon, Lonza Group and Zurich Insurance Group ended marginally down. In the Swiss Mid Price Index, Tecan Group surged 4.3% and Belimo Holding and DocMorris both ended higher by 4.1%.
European stocks closed higher on Monday with investors looking ahead to central bank meetings for clues on interest rates. The European Central Bank is expected to hike rates by 25 basis points on Thursday. The People's Bank of China and the Bank of Japan are also scheduled to announce their monetary policies this week. The pan European Stoxx 600 ended 0.16% up. The U.K.'s FTSE 100 edged up 0.11%, Germany's DAX climbed 0.93% and France's CAC 40 surged 0.52%. Switzerland's SMI gained 0.42%. Among other markets in Europe, Austria, Czech Republic, Ireland, Portugal and Spain ended higher. Greece and Netherlands edgd up marginally. Iceland, Norway, Poland and Turkiye closed weak, while Belgium, Denmark, Finland, Russia and Sweden ended flat. In the UK market, Ocado Group surged 3.62% on rating upgrade. Croda International and Auto Trader Group climbed 3.2% and 3.1%, respectively. Experian, Aritel Africa, RS Group and IAG gained 2 to 2.8%. CRH, IHG, Whitbread, Admiral Group, Relx, Smiths Group, Sainsbury (J), WPP and AstraZeneca also ended notably higher. Fresnillo ended 4.2% down. Vodafone Group, Segro, BT Group, Anglo American Plc, Unite Group, BP and Rio Tinto declined 1 to 2.7%. In the German market, Adidas surged more than 5.5% after Bernstein raised its rating on the stock to 'outperform'. Puma, Sartorius, Infineon, Volkswagen, Covestro, Daimler Truck Holding and Brenntag climbed 2 to 2.8%. BMW, MTU Aero Engines, Siemens, Zalando, HeidelbergCement, Mercedes-Benz, Continental and Beiersdorf gained 1 to 2%. Fresenius ended 1.51% down.
U.S. stocks climbed Monday, driving the S&P 500 to its highest level in more than a year, as investors looked ahead to a busy stretch packed with key economic reports and the Federal Reserve's latest interest-rate decision. Coming off its fourth straight week of gains, the S&P 500 rose 0.9% to 4338.93, its highest close since April 2022. The Dow Jones Industrial Average ticked up 0.6%, or about 190 points, while the tech-heavy Nasdaq Composite advanced 1.5%. Monday's gains spanned a mixture of old and new winners. Tech giants such as Meta Platforms, Alphabet and Nvidia climbed. Tesla shares finished up 2.2% at $249.83, extending their winning streak to 12 sessions – the longest on record, according to Dow Jones Market Data. Among the newly ascendant, Carvana climbed 11%, building off its strong performance last week after it said it expects to post improved profit metrics in the second quarter. Cruise operator Carnival rose 12% after JPMorgan analysts upgraded the stock to overweight from neutral. Shares in several airline companies also posted strong gains. Weighing down indexes, meanwhile, were shares of energy companies as oil prices declined. Benchmark U.S. crude fell 4.3% to $67.12 a barrel, while Brent crude dropped 3.9% to $71.84 after Goldman Sachs Group cut its year-end outlook for Brent to $86 from $95, citing swelling supplies from Russia, Iran and Venezuela.
The majority of the stock markets in East Asia and Australia are showing gains on Tuesday. The stock markets are thus following the positive trend on Wall Street. Here, the S&P-500 rose to its highest level in over two years. The stock markets in the region are once again led by Tokyo. The Nikkei index rose by 2.0 per cent and thus continued its clear upward movement since last Friday. Market participants point to the gains on the US stock markets.
In the U.S. bond market, the yield on the benchmark 10-year U.S. Treasury note settled at 3.763%, up from 3.744% Friday after the government sold $40 billion of 3-year notes and $32 billion of 10-year notes.
Citi raises Rio Tinto to Buy (Neutral) – Target 6,000 GBp
Jefferies lowers the Adecco target to CHF 30 (35) – Hold
Deutsche Bank raises the Henkel target to EUR 60 (55) – Sell
Produced by MBI Martin Brückner Infosource GmbH & Co. KG on behalf of Swissquote. All news is acquired with journalistic accuracy. No liability is assumed for delays or errors.