Meta Soars, Yet Markets Struggle Amid Crisis

Technology companies continue to release positive earnings reports, but global stocks and the NASDAQ remain under pressure. Meta is the third technology-based company this week to release their quarterly earnings report. Meta stocks increased by more than 11% outside of trading hours. Similar to Microsoft and Alphabet, the company released higher-than-expected earnings and revenue. However, the NASDAQ, Dow Jones, and SNP500 have all declined over the past 2-days regardless of mainly positive earnings. 

The global stock market continues to struggle as investors' sentiment remains low. This is due to the banking developments in the banking liquidity crisis. US regulators rush to devise a plan to prevent another US bank from failing. The bank’s stocks are down 90% this year, saw a 49% decline on Tuesday, and continued to decline yesterday.  According to sources, the bank’s board of directors are now offering partners to purchase the bank’s bonds at rates above market rates. 

The bank has also reportedly sold long-term securities and mortgage loans of $50–100 billion. If the bank is unsuccessfully able to do so, the organisation will collapse, similar to Silicon Valley Bank. According to reports, this would result in a $30.0 billion loss for the industry. So far, the Treasury is declining to comment on the development.

As the market’s risk profile declines, safe haven assets increase in value. The price of Gold is back above $2,000, and bond yields are declining, indicating that confidence is low. However, the US Dollar Index is one safe haven asset that continues to decline. The US Dollar Index is again down today and remains below 101.50. Investors are now also contemplating whether the Federal Reserve will look to increase interest rates at May’s meeting. To be more certain about the future of the monetary policy, economists will be monitoring today’s Gross Domestic Product and tomorrow’s PCE Price Index. 

NASDAQ

The NASDAQ is increasing by 0.40% during this morning’s Asian session but remains below yesterday’s price highs. The asset has formed two higher lows but still cannot form a higher high indicating the asset is not to create a formal upward trend. For a bullish trend to form, the asset must maintain a price above $12,930.

As mentioned above, the latest development is in relation to Meta’s latest earnings. Meta’s earnings read 13% higher than analysts expected, and the company revenue read 3.57% higher. The CEO also praises the firm’s AI department, which, according to the CEO’s speech, is something Meta has used for many years. The company CEO also confirmed Instagram users spend 20% more time on the platform, and AI helps the social media platform to determine which short videos to show viewers and at what periods throughout the day. 

This week, investors will also monitor the latest inflation data, such as the Price PCE Index. The Price PCE Index is expected to show 0.3%, but if the figure comes in lower than expected, the chances of a further 0.25% rate hike are doubtful. If the Federal Reserve chooses not to hike, it would be deemed positive for the stock market. If today’s Gross Domestic Product reading is lower than 2%, again, this may point towards the Fed potentially backing away from further interest rate hikes.

Indications on the intraday timeframe so far continue to indicate a possible decline. Moving averages are crossing over downwards, as is the stochastic oscillator. The price also forms an ascending triangle pattern, which assists traders in placing potential breakout points. Regression channels indicate the price is at a resistance level on longer-term timeframes and may show a decline.