Alphabet drags the market down after the results, FED evening

Alphabet drags the market down after the results, FED evening
Alphabet drags the market down after the results, FED evening

1/31/2024 7:34 p.m

US markets have a busy Wednesday. First, earnings season is in full swing and a number of interesting numbers have emerged ahead of the start of today’s trading. Second, the FED central bank is meeting today for the first time this year.

Let’s start with the Fed. Reuters polls suggest the rate change would come as a surprise to the market. The FED is now in a comfortable position and will certainly not want to prematurely waste its boost to support the economy in the form of rate cuts. Analysts estimate the reduction only in Q2 of this year. The market will now be more interested in what words Jerome Powell will use to evaluate today’s meeting.

Today’s main driver was Alphabet’s results. At Alphabet, the main focus was on costs. Those for the past quarter were higher than expected and the company estimates higher than originally reported expenses due to investments in AI. The drop in stocks by up to 6.5% drags the entire technology segment down with it. The Nasdaq is down 1.4% “thanks” to that. Another giant Microsoft (MSFT -1.31%) presented its results, presenting good numbers in most indicators. Under the weight of Alphabet and perhaps also the predicted higher costs for the development of new functional AI, it too is sinking into negative territory. The Giants will continue to report. Apple (AAPL -0.99%), Meta (META -0.97%) and Amazon (AMZN -1.3%) are expected tomorrow.

In order not to deprive readers of other detailed quarterly reports, I offer the results of Boeing (BA +5.64%), which pleased in all indicators. The commercial aircraft segment did the most. The chain Starbucks (SBUX -0.2%) reported so-called inline, the reaction of the share price is minimal. The results of Mastercard (MA +1.35%) are received positively in the context of today’s sell-off in its segment.

For the sake of completeness, let’s also include reports from the labor market when the change in ADP employment was lower than expected.

S&P 500 index -0.81% to 4885.32 b.
Dow Jones 0.06% to 38490.64 b.
Nasdaq Composite Index -1.37% to 15296.791 b.

S&P 500 index -0.81 to 4885.32 b.
S&P Strongest Sectors Change Weakest S&P sectors Change
Reality +0.6% Communications sector -3.3%
Utilities +0.6% Information Technology -1.5%
Health care +0.4% Energy -1.2%
S&P Strongest Stocks Change S&P’s weakest stock Change
Paramount Global (STEAM) +8.6% Rockwell Automation (YEAR) -16%
Stryker (SYK) +7.8% MarketAxess Holdings (MKTX) -14%
Edwards Lifesciences (EW) +7% Teradyne (TER) -8.2%
Boeing (BA) +6.3% Alphabet (GOOGL) -6.9%
CENCORA INC O (COR) +4.8% Alphabet (GOOG) -6.9%

Source: Reuters

Martin Varecha
Fio banka, a.s

The article is in Czech

Tags: Alphabet drags market results FED evening


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