Solid big tech earnings are not enough to ignite a broader rally

The S&P 500 Index and Dow Jones Industrial Average both hit fresh four-week-lows Wednesday, through stronger-than-expected first-quarter results from tech giants Microsoft and Alphabet helped the Nasdaq Composite Index rebound modestly from a four-week low.  Elsewhere, European shares held onto early losses to trade 0.7% lower yesterday, as investors digested a batch of earnings updates and economic data while remaining concerned about the impact of rising interest rates on the global economy. 

Summary as at 27.04.2023 

• Asian equity markets mostly fell this morning, coming under pressure from a round of weak regional earnings, while concerns over slowing economic growth and a potential US banking crisis eroded sentiment.  Investors also reacted to soft economic data in the region, headlined by data showing Chinese industrial profits slumped 21.4% year-on-year in Q1.  Meanwhile, the Bank of Japan kicked off a two-day monetary policy meeting, the first to be led by new BOJ governor Kazuo Ueda.  The S&P/ASX 200, Nikkei 225 and Topix declined, while the Kospi, Hang Seng and Shanghai Composite fluctuated around the flatline. 
• European equities are poised to extend declines while US equity futures are seen higher this morning as investors remain focused on earnings and concerns over economic growth.  Companies slated to report earnings today include Amazon, Intel and Eli Lilly, among others.  Investors also look ahead to first-quarter US GDP figures, weekly jobless claims and pending home sales data. 
• Oil prices rose slightly on Thursday, but were nursing sharp losses for the week as fears of slowing economic growth largely offset signs of tightening US supplies, with the focus now turning to key economic data due later in the day.  Prices were now trading close to a one-month low and were below the $80 a barrel level that was targeted by OPEC. 

• New orders for US manufactured durable goods rose by 3.2% from a month earlier in March, recovering from a revised 1.2% decline in February and easily beating market expectations of a 0.7% growth.   
• Meta’s first quarter results surpassed Wall Street’s modest expectations on both profit and revenue, sending its share soaring by 12% in after-hours trading.  Meta reported that the monthly user base of its flagship platform – Facebook – inched close to 3 billion, and its revenue guidance for the current quarter was also above analysts’ estimates. 
• Deutsche Bank this morning posted a better-than-expected 9% rise in first-quarter profit as income from higher interest rates offset a slump in revenues at the investment bank.  The bank also flagged job cuts in non-client-facing staff as it reported a steep drop in investment banking revenue that was worse than expectations. 
• Samsung’s profit plunged in the first quarter as prices for its memory chips continued to fall and demand remained weak.  Looking ahead, the company expects demand to gradually recover in the second half as customer inventory levels will slowly drop. 
• Boeing reported an adjusted net loss of $1.27 yesterday, about 20 cents less than analysts had expected, but revenue beat expectations at $17.92 billion.  The company also said it would increase production of 737 MAX planes later this year despite production snags.  Its shares rose about 0.4%.