Mike Dolan talks about the future outlook for the US and global markets
A volatile week for Wall Street giants looks set to end on a positive note, as Microsoft and Alphabet's results stunned the gallery overnight, while the yen plunged again in Asia after the Bank of Japan left policy unchanged.
After a day in which Meta's massive spending on artificial intelligence spooked investors and depressed both the company's stock and the broader tech sector, its rival appears to have steadied its ship overnight.
Google's parent company Alphabet announced its first-ever dividend and $70 billion in stock buybacks, sending its stock price soaring nearly 16% after the bell. Microsoft's shares rose more than 4% in after-hours trading as its quarterly revenue and profit exceeded expectations, helped by gains from the introduction of artificial intelligence across its cloud services.
Snap was also a big mover, with its shares soaring nearly 30% in Frankfurt after the photo-messaging app's owner reported better-than-expected quarterly revenue and user growth.
But it's not all rosy, with shares of semiconductor maker Intel expected to fall short of market expectations for second-quarter sales and profits, and seen as lagging behind the fast-growing AI components market. As a result, prices plummeted by more than 8%.
Nevertheless, the impact on the broader market caused Nasdaq futures to jump more than 1% overnight, while S&P 500 futures rose about 0.8%. Big oil companies like Exxon Mobil and Chevron were at the top of Friday's earnings diary.
Stock exchanges in Asia and Europe also rose on Friday, with the VIX stock market volatility indicator remaining subdued near Thursday's nearly two-week low.
However, much of the focus in Asian macro markets today is on the Japanese yen, which has fallen sharply and is becoming increasingly volatile. With the Bank of Japan still sticking to its monetary easing policy, the yen fell more than 0.5% to a 34-year low of 156.82 yen to the dollar. policy.
Stocks fluctuated wildly during London trading hours as traders grew wary of authorities' actions to stem the decline, although no actual intervention was detected yet, preserving most of the day's losses. .
The Bank of Japan has kept interest rates near zero and is prepared to raise borrowing costs later this year, underscoring its growing confidence that inflation is on track to reach 2% permanently in the coming years. suggested something.
However, the yen weakened as there was no clear guidance on the path for future rate hikes and the spread between Japan and other advanced economies remained widening.
The yen's weakness against the greenback spread to other regions as the dollar actually weakened against other major currencies after Thursday's key US gross domestic product (GDP) data unexpectedly missed expectations. Ta.
The U.S. economy grew at its slowest pace in nearly two years in the first quarter, but the numbers were partially depressed by a surge in imports, and signs of stronger domestic demand and accelerating inflation indicators in the quarter helped the Federal Reserve Expectations were high that the board would not cut interest rates. Interest rates before September.
Nevertheless, U.S. Treasury yields retreated from recent highs on Friday as traders awaited the release of the Fed's favored March PCE inflation measure later in the day.
The headline rate of PCE inflation is expected to rise slightly to 2.6% last month, while the core rate is expected to fall to 2.7%.
Anglo American on Friday rejected a 31.1 billion pound ($39 billion) takeover offer from rival miner BHP Group, saying the bid significantly undervalued the London-listed miner and its prospects. did.
Here are the key diary items that could give direction to US markets later on Friday:
* US March PCE inflation rate, average PCE lowered by Dallas Fed, University of Michigan final April sentiment index
* U.S. corporate earnings: Exxon Mobil, Chevron, AbbVie, Colgate Palmolive, T Rowe Price, Aon, HCA Healthcare, Roper Technologies, Charter Communications, Centene, Ball, LyondellBasell, Phillips 66
* German Chancellor Olaf Scholz welcomes Secretary-General Jens Stoltenberg to Berlin for 75th anniversary of NATO alliance
(Writing by Mike Dolan; Editing by Gareth Jones mike.dolan@thomsonreuters.com)
