The earnings results of the big tech could turn out to be the silver lining for the markets. While markets closed negative on Tuesday, the US equity futures on Wednesday are in green. US stock futures increased today as market optimism was boosted by better-than-anticipated earnings from mega-cap tech giants. With Microsoft and Alphabet beating market expectations and delivering a decent set of financials for the previous quarter, the sentiment around tech stocks is appearing bullish.
Meanwhile, The UK’s competition authority has announced that it will block Microsoft Corp.’s mega-deal for videogame publisher Activision Blizzard Inc., citing the possibility of harmful effects on competition in the cloud-gaming market. In premarket trading Wednesday, Activision’s shares ATVI, was down nearly 10%, while Microsoft’s shares MSFT, were up 8%. It remains to be seen how these stocks react after the market opens.
On April 25, the Dow dropped 1.02%, the S&P 500 sank 1.58%, and the Nasdaq Composite fell 1.98% during normal trading on Tuesday. All 11 S&P sectors also finished lower. First Republic fell 49% after the local bank reported that deposits dropped by 41% to $104.5 billion in the most recent quarter, rekindling worries about the banking crisis’ wider effects.
The next stop will be Meta’s results today. Facebook-parent Meta Platforms, one of the most valuable companies in the world, with a market capitalization of nearly $555 B report first quarter 2023 financial results after market close on Wednesday, April 26, 2023. Meta will host a conference call to discuss its results at 2 p.m. PT / 5 p.m. ET the same day.
Banking woes may continue after First Republic Bank’s shares plunged 49% taking the lender’s shares to a record low. However, it is the result from bigger banks that will decide the fate of US banking in the near future.
The American economy is beginning to splutter after a year of strong tightening, but the Federal Reserve is still expected to raise interest rates by a quarter percentage point when it meets next week.
The market currently expects the US interest rate to peak in June before falling to below 4.5% by year’s end. For additional hints on the status of the economy, investors are now looking forward to other corporate earnings reports and a plethora of statistical data on Wednesday.