US cable TV pain continues, Viacom dulls mood of tech index - ASX futures down 36 points

Continuing on from yesterday's theme, US media names continued to experience heavy selling last night. Today's first chart shows the same names, and Viacom's (VIA) fourth-straight quarterly decline in advertising revenue saw investors in that stock panic. The numbers versus expectations were not too horrific (EPS hit expectations, but revenue was 5% lower than expected), so this illustrates the hypersensitivity surrounding the media sector at present. Because of this result, VIA fell as much as 22% during the session before closing down 13.35%. But this still puts it on a two-day losing streak of 20% - not pretty. While this is a big fall, VIA (at US$17.5 billion market cap) is not that large, relative to some of the behemoths that dominate the NASDAQ Composite index. The real giants of US tech are shown in today's second chart - here's the big five NASDAQ stocks by market cap and 2015 year to date performance:

  1. Apple (AAPL): US$657 billion, up 5.62% YTD
  2. Google (GOOG): US$450 billion, up 22.42% YTD
  3. Microsoft (MSFT): US$373 billion, up 1.74% YTD
  4. Facebook (FB): US$268 billion, up 21.92% YTD
  5. Amazon (AMZN): US$248 billion, up 70.6% YTD
The moves in these giants are illustrated in today's last chart, along with Netflix (NFLX), which is one stock that is seriously upsetting the apple cart for the media industry in the US, which--as I pointed out yesterday--will likely begin to influence the media landscape in Australia too, now that it has set up shop here. While relatively small compared to the companies listed above (US$54 billion, up 159.11%), NFLX would be Australia's seventh-largest stock if it were listed on the ASX 200, sitting just below Telstra (TLS). And it punches above its weight in terms of tech influence in the US as massively-disruptive tech business that is upending a traditional industry. Again--while one Rivkin member quite rightly pointed out the difference between the cable/subscriber model in US television versus Australia's free-to-air listed companies--you don't want to be a one-trick-pony TV network in Australia and what is going on in the US now should concern Ten Network's (TEN) board.  

Locally, the Australian unemployment rate rose to 6.3% yesterday, but for the right reasons. More people were looking for work, which masked the positive higher-than-expected number of people employed by creating a higher denominator in the equation. So while this 13-year high in Australian unemployment makes for great headlines, it's not that scary and the market yesterday did most of its selling before the release. So nothing new aside from a bad lead from the US today, and the ASX 200 will continue to track lower through the middle of the 5,500-5,750 range as a result.


Source: Rivkin, Saxo Bank

To view the Rivkin economic calendar and Global Markets matrix, members can click here.

How to apply for the FGG IPO

As was the case with Future Generation Investment Company (FGX), Rivkin will be working with its broking partner CMC Markets in donating the broker stamping fees to charities associated with the investment company’s cause – in this case, youth mental health and homelessness.

With this in mind, we strongly urge you to follow the following steps accurately so Rivkin can add to the philanthropic nature of this IPO.

  1. Visit http://www.futuregeninvest.com.au/Global/prospectus.pdf to download and read the prospectus
  2. IMPORTANT: complete the Broker Firm Application Form on page 87 of the prospectus, this way we can donate the stamping fees
  3. Ensure you have sufficient funds in your Rivkin Securities stockbroking account to pay for the stock
  4. Enter the Broker Code 02662
  5. Enter the Adviser Code 0001
  6. Email your application to customerservice@rivkin.com.au or post it to:

Rivkin Securities FGG Offer
Po Box 1524
Double Bay 1360

Don’t have a Rivkin Securities stockbroking account? Open one now by emailing customerservice@rivkin.com.au (your Relationship Manager will call you back and pre-fill forms etc.) or phoning 1300 748 546. Our online brokerage is $11.00 or 0.11%, $9.90 or 0.11% for SMSFs that use Rivkin Super. PLUS we go the extra mile and donate non-core earnings like broking fees from this IPO to charity. You’re doing yourselves a favour and doing those in need a favour by getting involved.

This article was written by Scott Schuberg, CEO of Rivkin Securities Pty Ltd. Enquiries can be made via info@rivkin.com.au or by phoning +612 8302 3600.

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