Earnings season kicks off with a bang | Calamatta Cuschieri

Markets break new records, Citigroup beats expectations and Gilead dives further into Galapagos

US markets started the week higher on Monday as the next earnings season rolls in with second-quarter results from Citigroup sparking another drive into record territory. The Dow Jones Industrial Average advanced 27.13 points, or 0.1 percent, to an all-time high of 27,359.16 whilst the S&P 500 index edged up 0.53 points, or less than 0.1 percent, to end at 3,014.30. The Nasdaq Composite Index rose 14.04 points or 0.2 percent to close the session at 8,258.19.

European markets also closed higher with the pan-European STOXX 600 index rising 0.4 percent on the back of gains in the autos, chemicals and basic resources sectors. Germany’s DAX closed up 0.52 with its manufacturing and services sectors seeing boosts from recent data in Chinese economic growth.

Maltese markets ended nearly unchanged with the MSE Equity Total Return Index closing up 0.029 percent at 9,710.359 points. The biggest gain was seen by Medserv Plc which closed up 5.26 percent at €1.20, followed by Bank of Valletta Plc which ended up 1.82 percent at €1.12. Trident Estates Plc posted the biggest decline with shares closing down 3.03 percent at €1.92.

Citigroup kicks off earnings season

New York-based Citigroup Inc topped expectations for quarterly profit on Monday as a tight lid on costs and strength in consumer lending helped the third-largest U.S. bank counter weakness in its trading business. Overall revenue rose 2% to $18.76 billion, driven by 4% growth in Citi’s consumer business as customers spent more on their credit cards. Branded card revenue jumped 7% as more customers initially attracted with promotional offers started paying interest. Interest-earning card balances rose 10%.

Banks have been under pressure to cut costs as a weaker economic outlook raised concerns about revenue growth. Fellow Wall Street titans JPMorgan Chase & Co, Bank of America Corp and Goldman Sachs Group Inc are expected to report their figures later in the week.

Gilead ups stake in Galapagos

U.S. antiviral drugmaker Gilead Sciences will invest $5.1 billion in a major expansion of its partnership with Belgo-Dutch biotech Galapagos NV, news that lifted Galapagos’s shares more than 18% to an all-time high on Monday. The two companies are going after inflammatory conditions, one of the most lucrative areas in the pharmaceuticals industry.

Galapagos, which has more than 500 scientists, is part of a thriving biotech scene centered around Belgium, fueled by tax breaks and other incentives, with companies spun out of universities now listed on the local stock exchange. As part of the deal, Gilead will spend $1.1 billion to lift its Galapagos stake to 22% from 12.3%. The rest of the investment will be used to develop and commercialize its treatments for a 10-year period, the companies said.

Disclaimer: This article was issued by Peter Petrov, junior trader at Calamatta Cuschieri. For more information visit, https://cc.com.mt/. The information, view and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.