Global News： Interest rate cuts are expected to suffer another setback. The US double-kill earnings report boosted Microsoft and Google’s after-hours surge.
On Thursday (April 25), Eastern Time, the three major indexes of US stocks opened sharply lower, then bottomed out and rebounded, but eventually closed down across the board. The S&P Nasdaq stopped for three consecutive days and the Dow fell nearly 1%.
At the close, the S&P 500 index fell 0.46% to 5048.42 points; The Dow Jones index fell 0.98% to 38,085.80 points; The Nasdaq index fell 0.64% to 15,611.76.
[Market Review]
US stocks almost encountered a "black swan" overnight, and the main reason for the decline was the sharp drop of technology giant Meta and the US economic data hitting the Fed’s interest rate cut expectations.
Meta’s 10.56% plunge caused the market to worry about the company because AI burned money and could not see the profit prospect in the short term. Since then, the US GDP in the first quarter (the annualized quarterly rate increased by 1.6% compared with the expected 2.5%) and the PCE annualized quarterly rate (3.7% compared with the previous value of 2.0%) released far below expectations not only delayed the interest rate cut until December, but also further suppressed market sentiment.
Faced with the unexpected "unexpected" economic growth and stubborn core inflation in the United States, the market is worried that the risk of stagflation in the United States seems to be increasing.
American debt
The stubborn signs of inflation in the GDP report made traders further lower their expectations for the Fed’s interest rate cut. The yield of US Treasury bonds hit a new high in the year, and the yield of 10-year US Treasury bonds finally closed at 4.70%. The yield of 2-year US bonds, which is most sensitive to the Fed’s policy interest rate, finally closed at 4.96%.
[Hot American stocks]
Among the popular US stocks, Microsoft fell 2.45%, Apple rose 0.52%, NVIDIA rose 3.71%, Amazon fell 1.65%, Meta fell 10.56%, TSMC rose 2.74%, Tesla rose 4.97%, and AMD rose 1.33%.
Among them, Google and Microsoft announced after-hours earnings that exceeded expectations, and paid dividends for the first time in Google’s history. The stock price rose by 12% after hours, and Microsoft also had nearly 5% performance. However, Intel Q2′ s revenue outlook fell short of expectations, and its share price fell nearly 8% after hours.
[global index]
In European stock markets, the FTSE 100 index rose slightly by 0.48% to 8079 points. The French CAC40 index fell slightly by 0.93% to 8017 points. Germany DAX index fell slightly by 0.95% to 17,917 points.
In Asian stock markets, the Hang Seng Index rose slightly by 0.48% to 17,285 points. The index of state-owned enterprises rose slightly by 0.33% to 6120 points. The Nikkei 225 index fell 2.16% to 37,628 points.
[Overseas Market China Index]
Overnight, Hang Seng Technology Index futures fell by 0.30%, Nasdaq China Jinlong Index rose by 0.75%, and FTSE China A50 Index rose by 0.52%.
[China Stock Exchange]
In terms of popular Chinese stocks, Tencent Holdings (Hong Kong stocks) fell by 1.39%, Alibaba rose by 0.66%, Pinduoduo by 1.38%, Netease by 0.11%, Baidu by 0.72%, Ctrip by 0.36%, LI by 1.68%, Weilai by 0.60% and Xpeng Motors by 0.07%.
[foreign exchange commodities]
The picture shows the real-time market as of press time.
The US dollar index maintained a downward trend in the Asian and European markets, once falling below 105.50 after the release of the unexpected US GDP data, and then rebounded to the 106 mark in the short term and fell back, finally closing down 0.52% to 105.598.
Supported by the weakening of the US dollar index, gold maintained an upward trend, and COMEX gold closed up 0.27% at $2,332.2 per ounce; COMEX silver finally closed up 0.44% to $27.465 per ounce.
WTI crude oil rebounded due to the new US sanctions against Iran and Israel’s planned attack on Rafah, and finally closed up 1.26% to US$ 83.85/barrel. Brent crude oil closed up 1.45% to $89.3/barrel.
[Highlights]
The GDP growth rate in the first quarter of the United States was much lower than expected, and the Fed’s interest rate cut was postponed.
The annualized quarterly growth rate of GDP in the first quarter of the United States was lower than expected, the lowest growth rate since Q1 last year. At the same time, the initial value of the annualized quarterly rate of the core PCE price index in the first quarter recorded 3.7%, the highest since Q2 last year. As a result, traders delayed the Fed’s expectation of the first rate cut until December. Goolsbee said that the Fed must readjust its policy after the high inflation data. In addition, the Fed megaphone said that inflation performance was stronger than expected, and the dream of cutting interest rates gradually drifted away.
Bank of Japan considers reducing government bond purchases.
It is reported that the Bank of Japan will consider taking measures to reduce its government bond purchases. Yellen also talked about the yen issue, saying that intervention in the foreign exchange market should be a rare behavior, which only occurs when there is excessive fluctuation and will be negotiated in advance.
For the first time in Google’s history, revenue, advertising and cloud revenue all accelerated in the first quarter.
Google’s revenue growth in the first quarter was the fastest in two years, and its profit surged by 60%, betting on AI’s capital expenditure of $12 billion. The growth of cloud business has accelerated again to a high of 28% at the beginning of last year, its operating profit has quadrupled and its advertising revenue has improved steadily. The company also paid a quarterly dividend for the first time in history and will buy back up to $70 billion in additional shares.
AI helped Microsoft’s first-quarter earnings report exceed expectations across the board, and cloud revenue once rose by more than 5% after the accelerated growth.
This is the first full quarterly financial report after the launch of Copilot’s generative AI assistant, which not only increased Microsoft’s profit by 20% year-on-year but also slightly increased month-on-month, but also promoted the accelerated growth of Azure cloud revenue by 31%, and the contribution of cloud revenue increased to 7 percentage points, all of which were liked by Wall Street. CEO Nadella said that he has been integrating the artificial intelligence technology of partner OpenAI into Microsoft’s entire product line.
Early warning recovery is slow. Intel’s second-quarter profit and income guidance is inferior. After-hours, it once fell more than 9%.
In the first quarter of this year, Intel’s sales revenue and profit were higher than analysts’ expectations, but the guidance in the second quarter was lower than expected, which sounded the alarm. It means that Intel CEO Pat Gelsinger’s efforts to revive the company may take longer and cost more.
Musk gets money, chat robot Grok becomes ChatGPT’s enemy.
Musk may soon get billions of dollars to build his chat robot Grok into a rival of ChatGPT. This round of financing is considered to be one of the largest financing on the artificial intelligence track, and Sequoia Capital is one of the investors who participated in this round of financing.
The world’s largest rhubarb gold stocks led the S&P 500 index.
As of Thursday’s close, Newmont, the world’s largest gold mining company, rose 12.46% after its financial report, ranking first among the S&P 500 stocks. Due to the rapid rise of international gold prices, the average selling price of gold in Q1 was $2,090/ounce, which was $136 higher than the average price in 2023, and the gold sales also rose from $2.3 billion in the same period last year to $3.3 billion.
Micron received a US$ 6.1 billion subsidy from the US government.
Micron Technology confirmed on Thursday that it will receive $6.1 billion from the US federal government to build three chip manufacturing plants. In addition to this grant, Micron is also eligible for the US Treasury’s investment tax credit, which will provide a 25% credit for qualified capital investment. In addition, the New York State Government will provide incentives worth $5.5 billion.
[financial calendar]
