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Five Things You Need to Know to Start Your Day - Bloomberg

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Social media giants soar, money managers in demand and more delta danger.

Ad binge

Twitter Inc. and Snap Inc. blew past analyst estimates for second-quarter results, as companies continue to pour money into digital advertising. Snap’s second-quarter sales more than doubled to $982.1 million, while Twitter forecast revenue from $1.22 billion to $1.3 billion, higher than expectations. The blockbuster results are an emphatic response to questions about whether ad spending levels would return to their pre-pandemic levels. Both companies are up in pre-market trading, with the results also boosting the shares of rivals Facebook Inc. and Alphabet Inc., who report next week amid threats of a broad crackdown on Big Tech.

Rude health

The investment-management industry is in rude health as firms compete for clients eager to grow wealth amid low yields. Private-equity giant Carlyle Group Inc. is looking to raise as much as $27 billion for a new fund that would be the industry's largest ever, surpassing Blackstone Group Inc.’s $26 billion record from 2019. Meanwhile, JPMorgan Chase & Co. plans to hire 500 new advisers for its boutique wealth business as competition to serve the rich heats up. Finance job openings are booming in London too: Open positions in financial services, consulting and law are back above pre-pandemic levels.

Delta danger

Pfizer Inc.’s vaccine was just 39% effective in preventing people from being infected by the delta variant in Israel in recent weeks, according to the country’s health ministry, though it protected strongly against hospitalization and severe illness. Los Angeles County’s top health official said fully vaccinated people made up one-in-five Covid-19 infections in June and warned that the figure may rise in July with a higher level of community transmission. Meanwhile, just hours before the opening ceremony, Japan’s Olympics organizers reported a record number of new daily coronavirus infections linked to the Games, including three athletes, bringing the total to 110.

Markets mixed

Investors are weighing optimism over corporate earnings against 

mixed economic data and concern about the spread of coronavirus variants. Overnight, the MSCI Asia Pacific ex-Japan Index dropped 0.8%, with Tokyo closed for a holiday. In Europe the Stoxx 600 Index had climbed 0.8% by 5:46 a.m. Eastern Time, headed for a fourth day of gains. S&P 500 futures pointed to green at the open, the 10-year Treasury yield was at 1.291% and oil held most of a three-day advance.

Coming up...

PMIs for services and manufacturing are due at 9:45 a.m., with the Baker Hughes rig count following at 1 p.m. It's a relatively quiet day for earnings, with American Express Co. Inc., Regions Financial Corp. and Honeywell International Inc. among the few notable names reporting.

What we've been reading

Here's what caught our eye over the last 24 hours. 

And finally, here’s what Justina's interested in this morning

It’s hard to remember by now all the push notifications we got on Monday when the S&P 500 plunged the most since May. Solid corporate earnings have since helped. U.S. and European firms have reported 117% and 121% growth on the year so far respectively, according to Barclays. Sure, last year’s dismal numbers helped, but a decent majority has also beat estimates.

The concerns are mostly what comes next. The worry list includes the spreading Delta variant and supply-chain constraints, which were flagged in the eurozone PMI report today. Inflation fears have also crept into some corporate guidance.

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Source: Barclays

But anyhow it’s Friday and it looks like the S&P 500 might even close at another record high. Yawn. It helped that both Snap and Twitter earnings trounced expectations yesterday, which are boosting hopes for Facebook and Alphabet’s results next week. Given how much these tech giants drive the U.S. market, as long as that part of the picture still looks rosy, we can rest easy going into the weekend.

Follow Bloomberg's Justina Lee on Twitter at @justinaknope

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