Amazon fell about 10% in post-market trading after announcing $200 billion of planned spending and reporting in-line earnings. Amid abroader selloff in software companies, the market needed something a little more impressive, but the outlook for Q1 revenue failed to move the needle. While growth at Amazon Web Services, the company’s core cloud business, is accelerating, so far there’s not much sign of capital spending translating into increases in cash flow.
Alphabet’s earnings, and the call that followed, are unlikely to bring much relief to the software and AI stocks that have been getting hammered. On the other hand, at least it went off better than Microsoft last week. The share price fluctuated in post-market trading, and is lower at the time of writing, but it hasn’t moved to take back the 20% gains of the past three months.
Small caps are taking the baton from big tech as a renewed selloff in software and AI-linked names drags on the Nasdaq 100 and stalls the broader market advance.
Apple is a victim of its own success. A record quarter for iPhone sales meant it needed more memory chips than expected, and supplies are running dry. That’s likely to lead to higher costs and lower margins for Apple and its peers in the tech appliance industry and will limit the relief for tech stocks, which had one of the worst days of the year on Thursday.
The market’s reaction to earnings from Meta and Microsoft confirmed the tendency to separate companies into winners and losers from AI. While there’s a clear increase in skepticism toward big capital spending, markets are still prepared to reward ambition, especially from the more retail-friendly names.
Brazilian equities are ripping higher, the real is trading at fresh 19-month highs against the dollar and foreign investors are scrambling for exposure as the South American nation emerges as one of the hot spots for yield and liquidity.
The Kospi opened only modestly lower today following President Trump’s tariff threats, with the Korean won bearing more of the brunt.
The melt-up is back with US equities trading like the Greenland tariff escalation never happened. Both the S&P 500 and VIX are near levels from a week ago, re-anchored in the previous year-to-date ranges.
US bank stocks rebounded nicely Thursday thanks to earnings optimism, with Goldman Sachs’ post-results mega-bond issuance flashing extremely constructive signals.
