Stocks on Both Sides of the Atlantic Rebound as Tensions Ease
On Monday, global stocks slid whilst oil prices rose as tensions appeared to escalate between Russia and Ukraine. Yesterday, we saw the exact opposite scenario.
Russia announced on Tuesday that it had withdrawn some of its troops from the Ukraine border region and, although both the US and NATO said they were yet to see evidence of this withdrawal, it appeared to be enough to reassure the markets.
Brent crude, which seemed to be charging towards $100 a barrel, slipped from its seven-year high to close yesterday down by 2.4%, although has recovered some of these losses this morning.
On the other hand, stock indices on both sides of the Atlantic had positive sessions, rebounding after the previous day’s losses.
The FTSE 100, IBEX 35 and DAX 40 gained 1.03%, 1.68% and 1.98% respectively, and have continued to rise this morning.
On Wall Street, tech stocks drove all three major indices higher, with the Dow Jones, S&P 500 and Nasdaq gaining 1.22%, 1.58% and 2.53% respectively.
Meanwhile, earnings season is beginning to wind down, with 370 of the S&P 500’s companies having already published results.
Yesterday evening, at the close of the market, Airbnb reported fourth quarter results which exceeded expectations and forecasted another strong performance in the first quarter.
The company reported revenue of $1.53 billion and Earnings per Share (EPS) of 8 cents, compared to the $1.46 billion and 4 cents which had been forecast by Wall Street analysts.
Whilst Airbnb was initially hit badly by the pandemic, it has benefitted from a shift in demand by consumers who are no longer constrained to working in an office. As the number of people working from home has shot up since the onset of the pandemic, Airbnb has noted a rise in customers booking accommodation closer to home where they stay for longer periods to work remotely.
Airbnb finds itself uniquely positioned to benefit from this new category of travel. Moreover, as international travel restrictions are eased and the tourism sector begins to recover, Airbnb may also find itself benefitting from tourists who are not yet comfortable mingling with other guests in hotels, preferring their own space due to health concerns.
Airbnb further announced that bookings for the current quarter are expected to significantly exceed pre-pandemic levels for the first time since the pandemic began, and have forecasted revenue of between $1.41 billion and $1.48 billion, significantly higher than the market’s consensus of $1.24 billion.
In response to these positive results - Airbnb shares, which had already gained 6.14% during yesterday’s session – have risen a further 3.10% in pre-market trading.
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