Market Wrap

Market Wrap: tech earnings come in strong, and jobs data looms

Annie Charalambous, Friday, 30 April 2021

ETX Capital Market Wrap

Earnings dominated markets this week, having kicked off with Tesla 's latest results, which, despite posting $438 million in net profit for the quarter, saw shares dip in each session since. Over the last five days, TSLA is down 6% and YTD, sits at -4%. Following that, tech numbers rolled in, with Google (Alphabet), Microsoft, Apple, and Facebook all beating estimates as revenues continue to climb.

Ahead of its own release after Thursday 's close, Amazon stock absolutely from a very consistent low at around 3473 to a sudden 3648 in the afternoon. Today, the rapid rise to the highest peak in a year for Amazon stock has tailed off but the company's stock is still far ahead of the rest of the year's performance.

Perhaps what is surprising is that it took this long for a massive spike to occur given Amazon's absolute dominance in retail goods delivery during periods of extensive lockdown across many Western nations in which Amazon is the dominant force. The company's AWS division may have a huge influence over global commercial data to the point at which it has a stranglehold over the transmission and reporting aspect of all retail OTC derivatives conformity to MiFID II 's directive, meaning that whenever most regulatory technology companies send data to a reporting entity, it is giving its entire intellectual property to Amazon. Ergo, AWS owns and has full access to all trade, client, reporting and commercial data of every derivatives firm reporting to major financial markets regulators.

This is a huge revenue generator for the firm, however perhaps Amazon's original core business activity, the low-tech business of delivering parcels, should be viewed as its cash cow. More lockdowns have come into play recently – Turkey goes into a 3 week lockdown today, and many European nations show no sign of easing their lockdowns, thus confidence in Amazon's revenues is likely to be sustained.

Aside from that, Amazon, like all the large internet companies, is also a data company. It is similar to Google, Alibaba, Facebook, and eBay in its collaboration with big government and influence over the world 's markets and political leaders due to its harvesting of mass data and very detailed knowledge on how to assemble it.

In other corporate areas, despite the huge rises of the British pound's value over the US dollar that steadily continues, and some stellar first-quarter results having been announced yesterday, the FTSE100 's 12-month high has been decimated this morning.

As next month begins, a 6,954 starting point is something of a damp squib. The euphoria over Britain's most prestigious 100 stocks being over 7000 for the first time in over one year bolstered interest in indices, however, next week begins with trepidation as it is very hard to see what caused the downward move to suddenly occur given the massively high banking and tech firm results for the first quarter of the year, the strength of the pound and the now semi-open British economy compared to the largely closed European one.

Some analysts are considering problematic Asian markets, but their generic finger-pointing is not attributing this perceived weakness to any specific subject.

It certainly looks as though the FTSE 100 may go lower again next week.

Mark your Economic Calendar

  • Public holidays abound, as Monday's sunny weather will take members of the British, Japanese, Irish, and Greek public away from their computer screens and out for a day of spring relaxation – hence. there are no scheduled announcements across those countries. In Australia, it's business as usual and at 2:00 am, the monthly inflation gauge is set to be released, with an expected increase of 0. 4% over last month. The high figure to watch, however, is the projected 7. 4% increase in job advertisements across Australia and New Zealand compared to last month, suggesting a burgeoning economy. In mainland Europe, Germany's annual retail sales will be announced at 7:00 am, with a 1. 2% increase likely.
  • On Tuesday, Australia will announce a number of important metrics during the early hours of the morning UK time. At 2:30 am, monthly export, home loans and imports, along with the trade balance for the country will be made clear. Exports are set to be down by 1%, home loans down by 1. 7% but imports up by a very high 5% over February. The United States will make its vehicle sales figures known, which are currently estimated at 17. 7 million for the twelve month period. This is a tentative announcement, however. In Britain, the month of March is estimated to have been a period in which a remarkable 87,700 mortgages were approved, perhaps as a result of the extended stamp duty holiday. This may boost confidence in an asset-buying public and strengthen the pound.
  • On Wednesday at 16:30 UK time, the Irish Exchequer returns will be published, a set of data that looks to potentially affect the Euro as it is estimated to be down by 4. 172 billion in April compared with March. Ouch.
  • Come Thursday at 13:30, the US Nonfarm productivity figures for the first quarter of 2021 will be unveiled, which are estimated at a 4. 2% drop over the previous quarter. Not ideal, thus the US Dollar could be in the mire.
  • Friday will be a day in which Germany will release its current account balance, estimated at 18. 8 billion Euros, however the country is also set to announce that its exports are down by 0. 9% and imports up by 3. 6% which is surprising for a nation whose economy is based on traditional heavy manufacturing. At 7:45 am, France will also issue its current account balance, which paints a totally different picture from that of Germany, with estimates that it will be 2. 6 billion in deficit! At 13:30 BST, US Nonfarm Payrolls will be announced, with a drop to 780,000 compared with 859,000 in March.

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