Fox earnings, Snap fallout — What you need to know on Wednesday

Myles Udland
Markets Reporter

In what’s been a big week for major media stocks, 21st Century Fox (FOXA) earnings on Wednesday will be the day’s corporate highlight.

The media conglomerate is expected to report results after the close on Wednesday, and reports from Monday that Disney (DIS) and Fox discussed a possible deal is sure to be a topic of conversation on the company’s earnings call.

Rupert Murdoch. (AP Photo/Julio Cortez, File)

Elsewhere in earnings, headliners on Wednesday should include casino operator MGM (MGM), Humana (HUM), CenturyLink (CTL), Monster Beverage (MNST), and Twilio (TWLO). The economic calendar is empty.

Investors will also keep an eye on shares of Snap (SNAP), which were cratering in after hours trade on Wednesday after earnings disappointed. CEO Evan Spiegel also said in prepared remarks on the company’s earnings conference call that, “we are currently redesigning our application to make it easier to use.”

Spiegel added that, “There is a strong likelihood that the redesign of our application will be disruptive to our business in the short term, and we don’t yet know how the behavior of our community will change when they begin to use our updated application. We’re willing to take that risk for what we believe are substantial longterm benefits to our business.”

Snap also took a $40 million loss on its Spectacles glasses, saying it “misjudged strong early demand” for the product.

Snap co-founders Bobby Murphy, left, and CEO Evan Spiegel ring the opening bell at the New York Stock Exchange as the company celebrates its IPO. (AP Photo/Richard Drew, File)

President Trump, one year ago

One year ago Wednesday, President Donald Trump won a surprise election, defeating Hillary Clinton and initially sending markets into a tailspin.

But after stock futures bottomed in the early morning hours on stocks began a rally that they have hardly paused for since.

As we noted on Monday, the S&P 500 is up 21% since Trump’s election, the fourth-best among presidents elected since 1936. And while one of Trump’s favorite boasts has been about the strength of the economy and the gains we’ve seen in the stock market since his election, it is worth noting what happened in the years following strong first-year performances for other presidents.

Two of them — John Kennedy and George H.W. Bush — saw stocks enter a bear market over the next year. The third, Bill Clinton, enjoyed the final years of the tech bubble. Which ended in a massive crash that began just months before the 2000 presidential election.

President Donald Trump on election night, 2016.

Trump’s current commentary about the stock market and the economy, while true in that stocks have gone up a lot and the economy is doing well, raises another question about the often complicated relationship between stocks, the economy, and presidents.

Much like sports coaches, presidents often get too much credit when times are good and too much blame when times are bad. As Goldman noted Monday, Trump has certainly boosted the spirits of small business owners and the performance of stocks levered to this sector of the economy have reflected this success. But the big tech stocks powering the economy this year are certainly more about secular trends in the business world and the economy than who is the president.

The more interesting question, perhaps, is what happens if and when the markets or the economy turn south, and will Trump be keen to claim responsibility for all economic activity in the country or try to find someone — or some thing — to blame.

Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland

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