The mostly
strong corporate reports seem to be trying to launch a counterattack against
the red sea of stock index losses. More than 150 companies from the S&P 500
broad market index have delivered their quarterly earnings reports, and more
than 80% of them beat consensus profit expectations of analyst polls. Yet even
those incredible financial achievements have so far only partially allowed for
the retrieval of the initial defeat score in quote price moves, which now
resemble the scenarios from recent Champions League matches that were played this
week between the Spanish and English clubs.
The results
of the miraculous efforts of the famous Madrid and Castellon clubs were not
sufficient against the pressure of Manchester City and Liverpool, which both
had undisputable advantages, at least in the first semi-final matches. Real
top-class players, Karim Benzema, Luka Modrić, and Vinicius Junior managed to
recover three goals out of four, while Unai Emery's zealous team were defeated
by the red team. However, the wave of pressure from the grandees of the Premier
League was much stronger, but only the matches on May 3-4 seem to promise blue
skies over the European football battles and the global market battle of the
greens with the reds, when the mysteries of the second leg matches and the
Federal Reserve (Fed) meeting will be exposed almost simultaneously.
Yet, the
common market herd and even well experienced wizards, including fund managers
and gurus, are too scared to bet on any positive outcome as the ideas of
possible slowdowns or even stagflation threats are amplified by high
uncertainty in the afterbite of the Fed's nine-trillion Dollar balance sheet
reduction, as well as the magnitude of the nearest interest hike. There is too
much speculation around the chances of a decline in corporate profits, even for
those companies that felt sustainable in the opening quarter of the year, and
an adequate explanation from the Fed could remove at least some of those repeated
objections.
In the
meantime, the audience of the stock market arenas jumped up in ecstasy when
Microsoft and Visa "score a goal" for the greens, helping themselves
to recover by 4.8% and 6.47% up respectively on Wednesday, which added at least
a couple of percent to the composite Wall Street's indices. Later on the same
market indicators were dragged down by the depressive Google-parent Alphabet
and Boeing reports. It is remarkable that even Microsoft and Visa, that
initially soared by 3-5%, lost their gains due to the overall sceptical sentiment
in the market.
On Wednesday Facebook
owner Meta announced that the number of daily active people on the platform
amounted to 2.87 billion on average in March, while monthly active users reached
3.64 billion, with both figures increasing by 6% year-over-year leading to Meta
quote's jumping by 17.3% on pre-market trading on Thursday. Advertisement
impressions grew by 15% on an annual basis while the average price per ad
declined by 8%, according to Meta Platforms CEO, which is another sign of a
mixed attitude of global business to investment prospects.
Yes,
Facebook's announcement seems to have had a positive impact on the depressive
market mood, so that S&P 500 futures struggled to add about 1.5% in Asian
and European hours on Thursday. This attitude is transmitted to major European
indices in almost the same proportion, which may be seen as the first positive
sign of the week. But the whole battle in investors' minds is ahead, as Apple
and Amazon reports are coming soon, gasoline prices and other costs are still
high as a kite, and the final verdict of the American and European regulators
on interest rates is still clouded.
Disclaimer:
Analysis and
opinions provided herein are intended solely for informational and educational
purposes and don't represent a recommendation or investment advice by
TeleTrade.
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