Wall Street indexes posted positive gains for the week, with the S&P 500 gaining 1.9%, the Dow rising 0.6%, while the Nasdaq jumped 4.2%. The holiday-shortened week began with Joe Biden taking charge as the 46th President of the United States, while Kamala Harris became the first woman, first Black and first Asian American Vice President of the country.

Along with the political developments, corporate earnings were in full swing as major banks, tech and FMCG companies reported their quarterly or annual earnings, reflecting a clearer picture of the coronavirus’ impact on their performance.

The upcoming earnings-loaded week will see companies such as 3M (MMM), Lockheed Martin (LMT), JetBlue (JNLU), American Airlines (AAL), and McDonald’s (MCD) report their quarterly numbers too. Here’s a look at top news stories last week.

Top Stories This Week

Eyes on corporate results as political dust settles

Following results announcements from JPMorgan (JPM) and Citigroup (C), Goldman Sachs (GS) and Bank of America (BAC) kicked off earnings announcements last week. Goldman’s revenue rose to $11.7 billion, while Bank of America (BAC) reported a profit of $5.5 billion. Morgan Stanley’s net revenue rose to $13.64 billion from $10.86 billion last year.

Apart from banks, Procter & Gamble Co’s (PG) net sales rose 8% for the second quarter and it expects higher sales in fiscal 2021 as more customers shop more of the company’s cleaning products.

Among tech giants, IBM’s (IBM) total revenue fell 6.5% to $20.37 billion, while revenue from its cloud-computing business rose 10% to a record $7.5 billion in the fourth quarter. Intel (INTC) posted record annual sales of $77.9 billion. Its net income for 2020 was $20.9 billion, down from $21.1 billion a year earlier.

Snap Summary
With Joe Biden taking over as the President of the United States, the noise engulfing the country’s political platform has settled and investors’ focus has shifted to fundamentals driving the market — corporate results. Several companies have already reported their quarterly and, so far, profits have been strong. As per this report, of 66 S&P 500 companies that have reported earnings, 87.9% have beaten Wall Street estimates. For 2021, earnings are expected to rise 23.7% after sliding 14.1% in 2020. With vaccinations being rolled out, expectations are that economies would soon return to normalcy and be back on the recovery path.

Netflix’s user base crosses 200 million, signals an end to big borrowing

Netflix Inc’s (NFLX) global subscriber count crossed 200 million at the end of 2020. The world’s largest streaming service also said it will no longer need to borrow billions of dollars to fund its TV shows and movies. Its revenue also increased to $6.64 billion.

Snap Summary 
Higher user additions aside, Netflix’s commentary on its debt plan to make its content has been welcomed by investors. It had raised about $15 billion through debt in under a decade, and now it’s expectations for its free cash flow to break even in 2021 and possible share buyback bodes well for the stock. The results, the management outlook, and its plan to add more global customers come at a time when other major media companies are beefing up their arsenal to capture a bigger market-share of the streaming market. Walt Disney Co (DIS) has already announced several new programming for Disney+, while AT&T Inc’s (T) Warner Bros will send all 2021 movies straight to HBO Max alongside theaters.

ViacomCBS to launch streaming service Paramount+ in March

ViacomCBS Inc (VIAC) will be launching its streaming service, Paramount+, in the United States on March 4. The company also said the service will commence in Latin America and Canada on the same day, in the Nordics on March 25, and in Australia during mid-2021. Paramount+ will have content from BET, CBS, Comedy Central, MTV, Nickelodeon and Paramount Pictures.

Snap Summary
Viacom’s announcement is a testament to several media companies entering the streaming market or raising their current war chests to take on the likes of Disney+ and Netflix, among others. The ongoing COVID-19 pandemic has forced people to stay at home and opt for several platforms for their entertainment. Companies are looking to cash in on this trend and build on the recurring revenue model.

Google warns of shutting down search engine in Australia

Alphabet-owned Google (GOOG) has threatened to shut down its search engine in Australia if the country doesn’t change a proposed law that requires the company to pay publishers for news. Google Australia Managing Director Mel Silva told a parliamentary committee last week that the law will be a bad outcome for the company, the Australian people, media diversity and small businesses who use Google Search.

Snap Summary
Google’s warning is the second after Facebook (FB) threatened to restrict Australian users from sharing news articles on its platforms last year if the proposed law isn’t changed. The statements show an intensifying battle between the Australian government and tech companies, as the law that seeks to compel tech giants to pay publishers is being observed by many countries and that could set a precedent for others to follow suit. As per the Australian code, if publishers and tech companies cannot agree on a compensation, a binding arbitration would kick in.

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