Google Beat keeps rally alive? 25/04/2024

HOT stories for today
 

US market wrap:
 

• U.S. equities wrapped up Thursday’s trading session firmly in positive territory, marking the third consecutive day of gains for the major indexes. The upward momentum was fueled by a resurgence in megacap tech stocks, which have endured sharp losses in recent weeks amid heightened anxiety over escalating global trade disputes.By the closing bell, the S&P 500 had notched a robust weekly advance of nearly 4%. The Dow Jones Industrial Average climbed more than 2% on the week, while the tech-heavy Nasdaq Composite surged over 5%.
• Among the session’s standout performers was Alphabet, which joined Tesla in the winners’ circle after surpassing sky-high expectations in its latest earnings report. Interestingly, despite a significant earnings miss, Tesla shares have soared 14% this week, buoyed by optimism surrounding the company’s long-term bet on autonomous, revenue-generating vehicle technology. However, the broader economic picture showed some troubling signs. In March, U.S. existing home sales plunged to a three-year low, with transaction volume slipping 5.9% to a seasonally adjusted annual rate of 4.02 million—the weakest showing since 2009.

Google Beat keeps rally alive?

• Despite a broader tech selloff driven by economic fears, Alphabet delivered a strong first quarter. The Google parent posted EPS of $2.81, beating estimates of $2.01, and revenue of $90.2 billion versus expectations of $89.2 billion. It also announced a $70 billion stock buyback and a 5% dividend hike. “Alphabet didn’t just beat — it showed real resilience,” said Zacks strategist Kevin Cook. Still, analysts raised concerns over macroeconomic risks, the shift to AI-driven search, cloud growth, and capex. Advertising, which makes up 75% of Alphabet’s revenue, remained solid at $66.9 billion — up 8.5% year-over-year — but tariff impacts may emerge later.
• AI search has sparked worries about declining click-throughs, but Google said it's monetizing AI Overviews at similar rates to traditional search, and its AI tools are helping advertisers target more effectively. Google Cloud revenue hit $12.26 billion, rising 28.1% but slowing slightly from the prior quarter. Executives cited infrastructure constraints, with plans to expand capacity through 2025. Despite strong fundamentals, Alphabet shares are down 15.3% in 2024. 
   

Stocks on the move:

• Intel (INTC) – Shares declined nearly 6% after the chipmaker issued a downbeat outlook for the current quarter. Intel projected revenue around $11.8 billion at the midpoint, falling short of analysts’ average forecast of $12.82 billion. The company also expects earnings to hover around breakeven.
• Gilead Sciences (GILD) – The biopharma stock slid over 3% following a revenue miss in its first-quarter report, disappointing investor expectations.
• Boston Beer (SAM) – The maker of Sam Adams beer climbed 2% after delivering a strong earnings beat. Boston Beer reported earnings of $2.16 per share on $454 million in revenue, exceeding Wall Street’s projections.
• T-Mobile (TMUS) – Shares of the telecom giant dropped more than 5% despite first-quarter earnings and revenue topping analyst estimates.
• VeriSign (VRSN) – Stock in the internet domain provider edged down nearly 2% after its Q1 earnings slightly missed expectations. VeriSign posted EPS of $2.10 on $402 million in revenue, just under the anticipated $2.11 per share and $401.9 million in sales, according to FactSet. The company also announced its first cash dividend since 2011.
   

Today’s action

• Asia-Pacific markets traded mixed on Thursday, following Wall Street’s gains as renewed hopes for a de-escalation in the U.S.-China trade war lifted investor sentiment. Japan’s Nikkei 225 led the region with a gain of more than 1%, while Australia’s S&P/ASX 200 added 0.56%. In contrast, South Korea’s Kospi slipped 0.47%, and the smaller Kosdaq index edged down 0.15%. Hong Kong’s Hang Seng Index fell 0.29%, and mainland China’s CSI 300 hovered near flat. The cautious optimism in Asia came after U.S. stocks logged a second consecutive day of gains.
• Futures tied to the S&P 500 rose 0.3% overnight trading, while Nasdaq 100 futures climbed 0.3%. Dow Jones Industrial Average futures, however, edged down 15 points, suggesting a muted start. Investors are now turning their attention to several key earnings reports expected Thursday, with tech heavyweight Alphabet, chipmaker Intel, and consumer giant PepsiCo set to report quarterly results. On the economic calendar, durable goods orders and weekly jobless claims will offer further insight into the health of the U.S. economy.

Watchlist: INTC, GOOGL, VRSN, GILD, CL, AN, ABBV, META
 

Bitcoin
 

• Bitcoin (BTC) continued trading in a narrow range Thursday morning, brushing up against a key resistance zone as analysts watch for a potential breakout. The cryptocurrency climbed to $94,700 on April 23 — its highest level since early March — with the next psychological barrier sitting at $95,000. Swissblock highlighted the $94,000–$95,000 range as a crucial resistance band, suggesting that a short-term pullback toward $90,000 may be necessary to build momentum for a stronger move higher.
• Decreased exchange inflows, renewed demand for spot Bitcoin ETFs, and a broader surge in global liquidity are fueling the bullish case for Bitcoin—factors that historically align with asset price rallies. Market analyst Jamie Coutts noted that rising institutional participation reflects growing confidence from traditional finance in the crypto space. Meanwhile, gold continues its upward trajectory, with chatter around a potential climb to $4,000 per ounce gaining traction.
  Watchlist: Bitcoin: 74,000-100,000, Ethereum: 1,500- 2,000, Solana: 80-155
   

Forex
 

• The EUR/USD pair slipped to near 1.1380 during early Friday trading in Asia, as growing confidence that the ECB will cut rates in June continues to weigh on the euro. Still, downside pressure may be limited as investors remain cautious over U.S.-China trade tensions, following Trump’s comments about ongoing negotiations despite Beijing’s denials. Traders are also eyeing the final University of Michigan consumer sentiment reading, due later today.
• Meanwhile, the Japanese yen fell to a two-week low, with USD/JPY rising beyond 143.50, as optimism over a potential de-escalation in U.S.-China trade talks dampened demand for safe-haven assets. Stronger-than-expected Tokyo inflation reinforced expectations of further BoJ tightening in 2025, but a dovish Fed outlook may cap broader USD strength.
  Watchlist: EUR/USD: 1.0700-1.1600, USD/JPY: 140-144
   

Basic Materials
 

• WTI crude oil prices extended gains for a second straight session, hovering around $62.80 during Friday’s Asian trading. However, the commodity remains on track for a weekly decline as concerns mount over potential OPEC+ output increases. Several member countries are reportedly advocating for a second month of accelerated production hikes in June. Additionally, a possible ceasefire and easing of sanctions on Russia could boost its oil exports, further pressuring prices.
• Meanwhile, gold (XAU/USD) edged lower after touching the $3,370–$3,371 range, as a more positive global risk tone weakens demand for safe-haven assets. The retreat was also fueled by resurgent USD strength, bolstered by upbeat U.S. macro data. Still, geopolitical uncertainty and ongoing Fed rate cut expectations may help cushion the downside in the precious metal.
  Watchlist: GOLD 2600-3500, US Oil: 57.00-70.00

Key Economic Events Today:

EST time
10:00 am USD: Consumer Sentiment
10:00 am USD: Inflation Expectations

Earnings

BMO (Before the US Market opens)
ABBV            AbbVie Inc
HCA              HCA Healthcare
CL                 Colgate Palmolive
SLB               Schlumberger N. V.
PSX               Phillips 66
AMC (After the US Market closes): 

The TEFS Analyst team wishes you a successful day!