Here’s an exciting market update from CNBC, as some of the biggest names in the technology industry have made headlines after trading hours:
Shares of Facebook popped more than 7% in extended trading Wednesday following the release of the social media giant’s first-quarter earnings. Facebook reported earnings per share of 85 cents, which was not comparable to analysts’ estimates due to a $3 billion legal expense related to a Federal Trade Commission inquiry into Facebook’s privacy policies.
Revenue came in at $15.08 billion, topping Wall Street’s $14.98 billion forecast, according to Refinitiv. Daily active users increased 8% year over year to total 1.56 billion. Average revenue per user was $6.42, beating estimates of $6.39.
Microsoft shares jumped more than 3% after hours Wednesday after the company posted better-than-expected third-quarter earnings. The second largest company by market valuation, behind Apple, earned $30.57 billion in revenue during the period. That tops estimates of $29.84 billion, according to analysts surveyed by Refinitiv. Earnings per share were $1.14, higher than the $1.00 expected by analysts.
Shares of Tesla seesawed after market close Wednesday based on disappointing first-quarter earnings. Elon Musk’s automaker reported a loss of $2.90 on revenue of $4.54 billion. Analysts expected a loss of 69 cents on revenue of $5.19 billion per Refinitiv.
Chipotle shares were volatile in extended trading Wednesday following the release of the restaurant company’s first-quarter earnings. Chipotle posted revenue of $1.31 billion, beating estimates of $1.26 billion. Earnings per share were $3.40, compared to the $3.01 forecast on the Street.
Chipotle’s same store sales grew 9.9%, topping estimates of 7.3%.
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Here’s a global stock market updates provided by CNBC:
- Shares in Asia mostly gained in afternoon trade.
- The U.S. and China are set to resume trade negotiations in Washington on Wednesday, following last week’s talks in Beijing.
- A Financial Times report on Wednesday said the two countries are closer to reaching a deal.
Stocks in Asia were higher in Wednesday afternoon trade following a report that said the U.S. and China are closer to reaching a trade agreement.
Mainland Chinese stocks, however, were tepid by the morning session’s end, with the Shanghai composite advancing 0.23 percent. The Shenzhen component and Shenzhen composite were largely flat.
Meanwhile, the ASX 200 in Australia rose 0.65 percent. Data on Wednesday showed that retail sales Down Under hit a 15-month high in February, with the country’s trade surplus soaring beyond expectations to its second highest on record in the same month.
The broad MSCI Asia ex-Japan index advanced 0.69 percent to 539.56, as of 12:27 p.m. HK/SIN.
The U.S. and China are set to resume trade negotiations in Washington on Wednesday, following last week’s talks in Beijing. Ahead of the meeting, White House economic adviser Larry Kudlow said the two countries “expect to make more headway” in this week’s talks.
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Here’s the latest market updates from CNBC:
- Shares in Japan, South Korea and Australia advanced in morning trade.
- The Wall Street Journal reported Sunday that the U.S. and China are “in the final stage of completing a trade deal,” with Beijing offering to lower tariffs on U.S. products in categories ranging from chemicals to autos.
Stocks in Asia rose on Monday morning following a report that China is offering to lower tariffs on certain U.S. products as part of a trade deal with America.
In Australia, the ASX 200 rose 0.58 percent in morning trade, with almost all sectors advancing.
US-China trade deal progress
The Wall Street Journal reported Sunday that the U.S. and China are “in the final stage of completing a trade deal,” with Beijing offering to lower tariffs on U.S. products in categories ranging from chemicals to autos. For its part, Washington is considering eliminating most if not all of the trade sanctions placed on Chinese goods last year, according to the Journal.
A summit between the two leaders could happen sometime in March, according to both Bloomberg and the Journal.
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Check out the latest stock market performance from LOM Financial, today:
Markets ended the abbreviated week as a warning of a global slowdown was offset by strong earnings. The MSCI World Index ended the week up 0.07% while the S&P 500 lost -0.21%.
IMF Warns of a Global Slowdown
The International Monetary Fund cut 2019 global growth estimates by 0.2% to 3.5%, citing risks of a more significant downward correction was rising. In the US, the effects of fiscal stimulus are expected to unwind. Mexico experienced a significant downgrade to growth reflecting lower private investment. The high levels of public and private debt mean capital markets should be more sensitive to downturns than they have been historically.
The IMF report mirrors the World Bank January 2019 assessment (published on 1/8/19), which sees headwinds from the removal of accommodative policies that supported the protracted recovery along with more extreme weather events creating challenges in developed and developing countries. Lax credit markets have resulted in a growing number of developing countries holding questionable levels of debt.
Market Wrap Up
Earnings releases have been mixed but strong positive revenues and EPS surprises on Wednesday from Proctor and Gamble, Comcast, and United Tech Corp marked the turnaround that helped bring markets back to levels near the beginning of the week.
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Here’s an update for December’s Stock Market performance and global economic concerns from LOM Financial:
The month of December was once again dominated by troubling economic headlines ranging from disruptive global trade negotiations to disturbing U.S. central bank commentary. On top of the steady drum beat of what some are calling dysfunctional political behavior, the U.S. Government’s partial shutdown has added to the negative investor sentiment which has been building all year. Sliding stock prices over the last month of the year added to the fourth quarter market woes, notwithstanding a sharp equity market reversal on the day after Christmas. For the month of December, the S&P 500 declined by -9.03% and the MSCI World Stock index fell by -7.57%. These results capped an overall tumultuous year where the MSCI World declined by 8.19% for the period as a whole.
Since the U.S. and China met during the G20 meeting at the beginning of December, China has implemented multiple policies addressing major issues in trade war negotiations. China agreed to cut tariffs on more than 700 goods in sectors such as agriculture, pharmaceutical, manufacturing and materials. Despite the progress, most products will still be subject to the retaliatory tariffs until there is a breakthrough in the trade deal. Furthermore, China has drafted a law to prevent forced technology transfers, which is a main complaint by Washington. However, critics question whether the new law will be enforced successfully. U.S. trade representatives will travel to China in January for another round of negotiations and any update from their talk will likely affect markets early in the New Year.
Despite the ongoing risk market selloff in during the fourth quarter, the Fed still decided to raise the Fed Fund rate for the fourth time in 2018, to a range between 2.25% and 2.5%. However, the Federal Open Market Committee (FOMC) did adjust next year’s projected base rate move downward to just two hikes, in the face of market volatility. However, Fed Chairman, Jerome Powell reiterated the plan for balance sheet runoff. As the Fed downplayed risks to the economic outlook, investors worry that a hawkish central bank will ultimately slow the economy and send markets into another tail spin. As interest rates continues to climb, consumers will feel even more pressure on mortgages and auto loan payments. Overall, businesses have begun to experience a higher interest burden.
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LOM Financial has an update regarding the Brexit’s effect on the stock market’s performance lately:
A mixed week ended down on Friday. The MSCI World Index closed down -1.13% while the S&P 500 lost -1.22%. The generic 30-year index rose 0.10%.
May Survives No Confidence Vote
The pound rallied 1.42% on Wednesday following Theresa May successful defense against a no-confidence vote. Prime Minister May benched a vote on the Brexit terms noting that it would not pass an approval vote if it were to go to Parliament. The EU has been vocal in dismissing calls for a better deal being negotiable but affirmed that Britain could elect to remain part of the EU without approval from other EU members. While remaining would likely be better for the country, another Brexit vote seems unlikely given the challenges related to setting a precedent of voting until you get a desired outcome. If the UK were to enter a hard Brexit, Britain would default to the WTO rules of trade with higher tariffs and barriers to entry. We are now within 100 days of the March Brexit deadline.
Google Visits Washington DC
Google’s CEO, Sundar Pichai, went to Capitol Hill to address questions of political bias in their search engine. The discussion basically broke down to senators being concerned that searches for conservative topics tended to be less prevalent and more negatively biased. Pichai tried to explain that their algorithm uses user feedback to determine various factors like relevance, freshness, popularity and how other people are using it. Perhaps the surprising fact was that 15% of daily searches Google sees are have never been seen by the algorithm before.
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