The stock market was lower on Friday, after disappointing earnings reports from
Amazon.com. Inflation data hit the wires, too – and the bond market has taken note.
futures contracts for
Dow Jones Industrial Average
It fell 112 points, or 0.3%, after the index climbed 614 points on Thursday.
Standard & Poor’s 500
Futures indicated the start of a 0.9% decline with
Preparing to fall 1.1%. The S&P 500 and Nasdaq rose more than 2.5% each Thursday.
“Futures are moderately lower after earnings and disappointing guidance from AMZN and AAPL,” wrote Tom Essaye, founder of Sevens Report Research.
Apple (stock ticker: AAPL) reported earnings of $1.52 per share, beating estimates of $1.43 per share, on sales of $97.28 billion, above expectations of $93.89 billion. The results were not disappointing. The company said supply restrictions in China caused by the country’s Covid-related shutdown could reduce second-quarter sales by $4 billion to $8 billion. The stock fell 2.3%.
Amazon (AMZN) reported earnings of $7.38 per share, beating estimates of $8.36 per share, on sales of $116.44 billion, above expectations of $116.3 billion. Higher costs such as labor and shipping affected the company’s profits. The company also drove sales of $118.5 billion for the current quarter, mid-range, beating estimates of $125.5 billion. The stock is down 10%.
Falling stock prices for Amazon and Apple drove the Nasdaq down. The combined market capitalization of the two companies as of Thursday’s close was $4.14 trillion, about 20% of Nasdaq’s total market capitalization.
The S&P 500 is down 10% this year and is on track to close out its worst January-April period since 1970. The Nasdaq has been flirting with the bear market, dropping 19% in 2022 — the worst four months to start in the year since 1973, And it’s the second-worst index ever — tech stocks that pack the index tumbled.
Elsewhere, inflation remains high. The PCE index rose 6.6% year over year in March. Markets had been hoping inflation would peak, but that rate is higher than the 6.4% price hike seen in February.
But there is good news. The core personal consumption expenditures result, which does not take into account the fluctuations – and the recent spike – energy and food prices, rose only 5.2% in March. This is lower than the previous result of 5.4%. This means that prices across the board are rising at a slower pace.
That could ease pressure on the Federal Reserve to raise interest rates aggressively, which markets welcome. The Federal Reserve will announce its interest rate decision next week.
This is not exactly what the market is referring to. The two-year Treasury yield, which reflects market expectations for the benchmark lending rate two years from now, rose to 2.74% from about 2.7% before the inflation data.
The stock market is basically unchanged from what it was before the inflation print.
It was 1.1% higher, and Tokyo
Here are the stocks on the go on Friday:
Tesla (TSLA) is up 2% in pre-market trading, after CEO Elon Musk He said via Twitter He has no further plans to sell Tesla shares beyond Friday. The billionaire CEO recently sold $4 billion worth of company stock, likely to help fund his acquisition of the social media conglomerate.
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