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© Reuters. A smartphone with a displayed Intel logo is placed on a computer motherboard in this illustration taken March 6, 2023. REUTERS/Dado Ruvic/Illustration
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A look at the day ahead in U.S. and global markets from Mike Dolan
After mega tech earnings inspired the best day for Wall St stocks in almost 4 months, online retail giant Amazon cooled the frenzy somewhat on Friday - even as chipmaker Intel (NASDAQ:INTC) attempted to pick up the torch.
But the dramatic re-acceleration of Big Tech stocks this week - where the NYFANG+TM index of the top 10 Big Tech stocks is now up 37% so far this year - is competing with multiple macro narratives that are increasingly hard to read.
Japan's yen fell to its lowest in six weeks and Tokyo's Nikkei 225 jumped 1.4% after the Bank of Japan faced down persistent speculation of a sudden tightening of its ultra-loose monetary stance, with new Governor Kazuo Ueda opting instead for a broad review on how to phase out the policy.
Keeping BOJ bond-buying alive for the time being despite another rise in Japanese inflation, the news followed rearview mirror readouts from the United States and Europe on how gross domestic product unfolded in the first quarter.
While U.S. GDP growth slowed more than forecast to an annualised 1.1%, that was mainly due to a big rundown in inventories untypical of an economy fearful of recession and it masked an acceleration in consumer spending during the quarter.
Europe was even harder to read - a disappointing Q1 flatline in Germany but forecast-beating brisk expansions in Italy and Spain and a mixed bag of April inflation soundings.
The net result of the blizzard of incoming economic and earnings news, a stock market jump and the U.S. debt ceiling standoff has seen a sharp back-up in bond yields. Two-year U.S. Treasury yields are back above 4%, even though they're off Thursday's highs ahead of the U.S. market open today and next week's Federal Reserve policy decision.
Helped by the yen swoon, the dollar index is higher.
With the Fed meeting in view, the release of March PCE price inflation data later on Friday tops the diary. Big Oil tops the earnings calendar.
Wall St stock futures fell back 0.4% after a wild ride in Amazon.com (NASDAQ:AMZN) shares overnight.
The stock initially jumped more than 10% after decent bottom-line earnings were released. But it reversed all of that after Chief Financial Officer Brian Olsavsky signaled its long lofty cloud computing growth would slow further as its business customers braced for turbulence.
Amazon was down about 2.5% ahead of Friday's open.
Intel attempted to keep tech appetite alive, however, and its shares rose 4% in out-of-hours trading after it flagged a second-half improvement in depressed gross margins.
Banking remained jittery. U.S. officials are coordinating urgent talks to rescue First Republic Bank (NYSE:FRC) as private-sector efforts led by the bank's advisers have yet to reach a deal, according to Reuters sources.
With much of Europe and Asia closed on Monday for the May Day bank holiday, Asia bourses advanced in Wall St's slipstream but Europe retreated sharply on some jarring corporate updates.
The biggest European laggards in percentage terms were UK lender Natwest, which fell nearly 6% after reporting large deposit outflows in the first quarter, and Spain's Banco Sabadell, which dropped 5.7% for similar reasons.
In deals, Deutsche Bank (ETR:DBKGn) said on Friday it had agreed to buy London-based stockbroker Numis for about 410 million pounds ($511 million) - an all-cash offer representing a premium of 72% to Numis stock's Thursday close.
Events to watch out for on Friday:
* U.S. March personal income and consumption and core PCE reading, Dallas Fed's March "Trimmed MeanPCE", April Chicago business survey and University of Michigan sentiment surveys
* U.S. corp earnings: Exxon Mobil (NYSE:XOM), Chevron (NYSE:CVX), Colgate-Palmolive (NYSE:CL), Newell Brands, Aon (NYSE:AON), Charter Communications (NASDAQ:CHTR), LyondellBasell
* Eurogroup finance ministers meet in Stockholm, with European Central Bank President Christine Lagarde, ECB board member Fabio Panetta and ECB bank supervisor Andrea Enria attending
GRAPHICS:
Amazon's cloud division growth hits record low https://www.reuters.com/graphics/AMAZON-RESULTS/gdpzqbozbvw/chart.png
Tokyo core-core inflation reaches a four-decade high https://www.reuters.com/graphics/JAPAN-ECONOMY/INFLATION/gdpzqbzdrvw/chart.png
Big Tech share of S&P500 market cap https://fingfx.thomsonreuters.com/gfx/mkt/dwvkdlweepm/One.PNG
Mega Tech mojo returns https://fingfx.thomsonreuters.com/gfx/mkt/egpbyqdjyvq/Three.PNG
(By Mike Dolan; Editing by Toby Chopra; mike.dolan@thomsonreuters.com. Twitter: @reutersMikeD)
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