(April 30): Stocks steadied on Thursday as investors dissected a flurry of earnings, including from four of the Magnificent Seven cohort. Market sentiment improved as oil erased a jump to the highest level in four years.
Nasdaq 100 contracts edged up as Alphabet Inc rallied more than 7% in pre-market trading after beating expectations, while Amazon.com Inc rose after its report. Microsoft Corp dropped as growth in its cloud-computing business fell short of high expectations. Meta Platforms Inc fell amid concerns over its spending plans.
Equity markets turned higher as global benchmark Brent crude oil reversed an intraday jump of as much as 7.1% to above US$126 ($160.85) a barrel. Axios had reported that US President Donald Trump was slated to receive a briefing on Thursday on new plans for potential military action in Iran, clouding hopes for an imminent peace agreement.
From elevated oil prices to a divided US Federal Reserve (Fed) keeping rates on hold and impressive megacap tech earnings, traders are grappling with a barrage of whipsawing headlines. The backdrop is testing a global equity rally that has erased war-related losses and pushed US markets to new highs.
“Equities are caught in between escalating Middle East tensions and strong fundamental earnings data being released,” said Wolf von Rotberg, an equity strategist at Bank J Safra Sarasin Ltd. “Oil prices moving towards US$150/bbl would likely increasingly impact the consumer in the US, which would also mark a turning point for equity markets. Thus, a deal is required to see a continued move higher over coming months.”
Elswewhere, the yen jumped against the dollar after Japanese Minister of Finance Satsuki Katayama said the time to take bold action in foreign exchange is nearing. Treasuries steadied after the surge in oil and a hawkish hold by the Fed drove bonds lower.
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Europe’s Stoxx 600 index swung higher on another day packed with corporate results and as traders prepared for interest rate decisions from the European Central Bank (ECB) and the Bank of England. Both are both expected to keep rates unchanged, with investors focused on policymakers’ latest views on the outlook for inflation stemming from the Middle East conflict.
“The Iran war is hitting energy-hungry Europe harder than other regions,” said Marija Veitmane, the head of equity research at State Street Global Markets. “Higher oil prices are pushing up inflation expectations and ECB rate assumptions, making an earnings recovery increasingly unlikely.”
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Apple Inc is the day’s marquee earnings event after a frenzied Wednesday offered a glimpse at how some of the world’s biggest tech companies are doing in artificial intelligence (AI). A slew of US economic data is also due Thursday.
“AI is giving markets a structural growth story, but oil is turning geopolitics into a structural inflation risk,” said Charu Chanana, the chief investment strategist of Saxo Markets. “With positioning still crowded in parts of tech, the market can no longer rely on earnings strength alone.”
The Fed left rates unchanged on Wednesday, but revealed a deepening division over the outlook for policy. Traders have all but abandoned wagers on a rate cut this year and began pricing in the chances of a hike in 2027.
Jerome Powell’s press conference was his last at the helm of the central bank after the Justice Department dropped a controversial criminal investigation into the Fed, clearing the way for the Senate confirmation of Kevin Warsh as the next chair. Powell said he will remain at the central bank as a governor.
The latest gathering revealed a deepening division. Cleveland Fed president Beth Hammack alongside Minneapolis’ Neel Kashkari and Dallas’ Lorie Logan “supported maintaining the target range for the federal funds rate but did not support inclusion of an easing bias in the statement at this time”. Governor Stephen Miran dissented in favour of a cut.
Corporate news:
- Societe Generale SA beat estimates for profit as its equities traders rode the market volatility of the first quarter and the French retail unit benefitted from lower rates for regulated savings accounts.
- BNP Paribas SA beat analyst estimates for profit in the first quarter as it joined the equities trading windfall across the industry.
- Glencore plc’s oil and gas team made bumper profits as the Iran war roiled global energy markets, with the surge in prices helping to put the firm on course for one of its best-ever trading results.
- Stellantis NV shares fell as investors questioned the sustainability of an apparent turnaround in the key North American market, where its performance was bolstered by price cuts and one-time financial gains.
- Unilever plc’s sales grew more than expected at the start of the year as consumers in emerging markets snapped up laundry detergents and Dove soap.
- Credit Agricole SA’s corporate and investment bank struggled with the market volatility during the first quarter as clients took a wait-and-see attitude, while a key metric of capital strength declined.
- Puma SE appointed Mark Langer as its new chief financial officer and reported first-quarter earnings that were slightly ahead of estimates as the German sports brand makes progress on its turnaround efforts.
- Alphabet Inc’s Google is seeing a clear payoff from its AI spending, while Meta Platforms Inc is lagging behind.
- Anthropic PBC began weighing a fresh funding round that would value the AI developer at more than US$900 billion, according to people familiar with the matter, potentially leapfrogging its long-time rival OpenAI as the world’s most valuable AI start-up.
- Samsung Electronics Co’s semiconductor arm brought in historic profit over the March quarter, beating expectations with a 48-fold jump as AI data centre orders delivered hefty margins.
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Some of the main moves in markets:
Stocks
- S&P 500 futures were little changed as of 5.51am New York time on Thursday
- Nasdaq 100 futures rose 0.2%
- Futures on the Dow Jones Industrial Average fell 0.2%
- The Stoxx Europe 600 rose 0.3%
- The MSCI World Index was little changed
Currencies
- The Bloomberg Dollar Spot Index fell 0.2%
- The euro rose 0.2% to US$1.1695
- The British pound rose 0.2% to US$1.3504
- The Japanese yen rose 0.7% to 159.34 per dollar
Cryptocurrencies
- Bitcoin rose 0.7% to US$76,164.21
- Ether rose 1.1% to US$2,264.2
Bonds
- The yield on 10-year Treasuries declined three basis points to 4.40%
- Germany’s 10-year yield declined two basis points to 3.09%
- Britain’s 10-year yield declined three basis points to 5.04%
Commodities
- West Texas Intermediate crude rose 0.2% to US$107.07 a barrel
- Spot gold rose 1.6% to US$4,622.96 an ounce
Uploaded by Tham Yek Lee
