- AWS Disappoints
- Intel Continues To Struggle
- Expectations Are For Quarter Point Rate Hike From Fed
Following a surprisingly strong report from Facebook parent Meta Platforms, stocks rallied sharply Thursday. The S&P 500 jumped 2% and the Nasdaq Composite jumped nearly 2.5%. However, after the close Thursday, Amazon ruined an otherwise strong day and set the stage for what could potentially be a choppy end to the week.
Although Amazon beat on both revenues and profits, growth in cloud computing provider AWS slowed to 11% from 16%. That was the slowest rate of growth in the sector since Amazon began reporting it separately back in 2015. The slowdown in cloud computing echoed similar news received earlier in the week from both Microsoft
Elsewhere, Exxon Mobil and Chevron
In total, 235 of the 500 companies in the S&P 500 have now reported. According to an article in today’s Wall Street Journal, based on reported earnings so far and estimates for remaining companies, first quarter earnings are on pace to fall over 4% from a year ago. However, reported earnings have managed to top expectations by 8% at this point. That drop in earnings also comes in the wake of the most recent GDP report that showed the economy grew 1.1% in Q1, down from 2.6% in the final quarter of last year.
For today, markets are bouncing around a bit in premarket trading. The latest reading on Personal Consumption Expenditures (PCE) was released this morning. Analysts were looking for an increase of 0.3% and that is exactly what they got. The PCE factors heavily into Fed decision making and with the Fed scheduled to meet next week, expectations are well above 80% for Powell and company to increase rates 0.25% next Wednesday. As always, I would stick with you investing plan and long term objectives.
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