Positive Earnings Across the Board, but Banking Woes Continue

Global stocks see a surge in trading activity as large companies release their earnings report and recession fears deepen after the latest economic announcements. Yesterday, 3 of the most influential companies released their quarterly earnings report both before and after the market closes.

Microsoft, Alphabet, Visa, and Mcdonald's released their earnings reports. Today’s investors are awaiting the release of Meta and Boeing’s quarterly reports. The earnings reports previously showed both positive and negative elements depending on the company. However, this week marks the first week companies have shown extremely positive earnings. 

This week, the stock market has again spotlighted and pressured the banking issues. This has been bought about by First Republic Bank, confirming depositors have withdrawn slightly more than $100 billion as individuals lack confidence in medium-sized banks. First Republic Stocks decline 50% during yesterday’s trading session. Investors are analysing whether the positive earnings will overpower the banking and recession risks. 

Due to the lower risk appetite throughout the day on Tuesday, the US Dollar rose in value, as did Gold prices. The US Dollar rose in value against the Euro, Pound, and Swiss Franc. The Dollar only saw a decline against the Japanese Yen, which increased in value against the whole currency market. Other safe-haven assets, such as Gold, came under pressure in the morning due to the rise in the US Dollar but corrected upwards after news of banking pressure and low consumer confidence arose. US Consumer Confidence read 101.3, which is the lowest since July 2022. 

In addition, it has also been reported that China, Russia, and possibly India are increasing their gold reserve to limit their exposure to the US Dollar. This, again, can support Gold in the longer term. 

Gold 2-Hour Chart on April 26th 

NASDAQ 

The NASDAQ experienced a substantial decline during yesterday’s trading, declining by 1.95% before attempting a correction. The index ended the day on a 0.74% decline and is trading slightly lower this morning. The index has declined 9 out of the last ten days, but traders should note that the instrument is experiencing strong buying sentiment at times. Investors will now monitor the price movement, orders flow, and pending orders when the market opens this afternoon. 

Microsoft is the second most influential stock within the NASDAQ, and Alphabet is the fifth most influential. Both companies saw positive earnings reports and are trading at a higher price after trading hours. Microsoft is trading 8.45% higher and Alphabet 1.69% higher, though these will show once the NASDAQ exchange opens. Even other technology companies are experiencing a surge in buyers, such as Meta, which is up 2.30%. Wall Street expects Meta to release their earnings tonight after the market closes. 

Judging from the latest earnings report, the cloud industry continues to grow 25-30% yearly, which is positive for both stocks. Alphabet’s Earnings Per Share came in 9% higher than analysts’ predictions, and the revenue read 1.30% higher than Wall Street was expecting. Nonetheless, Revenue was still slightly lower than in the previous quarter. Microsoft’s Earnings Per Share came in at 9.60% higher, and the Revenue read 3.60% higher than expectations.

In addition, other stocks not components of the NASDAQ are increased in value. McDonald’s Earnings Per Share was 12% higher, while Visa’s was more than 5% higher. These do not directly affect the NASDAQ but affect investor sentiment, and it is also essential to recognise that the stock market as a whole is partially correlated. Meta, this evening, is expected to confirm an Earnings Per Share of $1.95, which is higher than the $1.76 reported in the previous quarter. 

The instrument still follows a downward trend pattern regarding technical analysis, with the asset forming lower highs and lower lows. The asset also declined below the previous support level of $12,842. The investment has now formed a retracement and is trading slightly higher. Therefore, traders are monitoring the price movement for further crossovers and breakouts. The price of the NASDAQ is declining this morning, which is a concern for investors, Asian and European indices are also showing considerable declines in response to banking woes. The DAX this morning has declined by 0.68% over the past 30 minutes. 

NASDAQ 20-Minute Chart, 26th April 2023

Summary:

• Microsoft, Alphabet, Visa, and McDonald's released their earnings reports. All four companies beat the Revenue and Earnings expectations. 
• China, Russia, and possibly India are increasing their gold reserve to limit their exposure to the US Dollar.
• First Republic Bank confirms depositors have withdrawn slightly more than $100 billion as individuals need more confidence in medium-sized banks. Investors again fear a recession after the news and lower Consumer Confidence data.
• Alphabet’s EPS (Earnings Per Share) was 9% higher than analysts’ predictions.
• Microsoft’s EPS came in at 9.60% higher, and the Revenue read 3.60% higher than expectations.