Big Tech Earnings Impact Stock Futures: Nasdaq Dips; Alphabet Faces Setback

Tech giants' earnings impact markets: Nasdaq dips, Alphabet faces setback. Key events this week and market moves explained in simple terms.

iShook Opinion

Oct 25, 2023 - 09:15

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Big Tech Earnings Impact Stock Futures: Nasdaq Dips; Alphabet Faces Setback

The future of US stock prices took a little dip after Microsoft Corp. and Alphabet Inc., the parent company of Google, shared their earnings reports. It's a bit of a mixed bag for the tech giants, and this is setting the tone for other companies that are yet to share their numbers this week. Contracts for the Nasdaq 100 went down by 0.4%, and those for the S&P 500 slipped by 0.3%. Alphabet saw its value drop by as much as 7% before regular trading started. This happened because their cloud division didn't make as much profit as everyone was hoping for. On the other hand, Microsoft saw an increase because their cloud business did better than expected. Meanwhile, Texas Instruments Inc. didn't do so well as their forecast for future sales hinted that people might not be buying electronic stuff as much.

Right now, investors are keeping a close eye on how companies are dealing with high interest rates and if regular folks like you and me are changing how we spend money because of prices going up. Later today, Meta Platforms Inc., the parent company of Instagram and Facebook, is going to share its earnings. Tomorrow, it'll be Amazon.com Inc.'s turn.

Chris Beauchamp, who is a big expert on markets, said, "Tech earnings got off to a mixed start thanks to a focus on cloud computing, one of the big money spinners for the sector. It’s now up to Meta tonight and Amazon tomorrow to provide the kind of good news that might give stocks a reason to rally into month-end."

Over in Europe, the main stock benchmark went up and down because of earnings reports from some of the biggest companies that sell stuff to regular people and from fintech companies that use technology to do financial things. This made some people worried that the whole world might be slowing down, and that's not great for companies making money.

For example, the company that owns Gucci, Kering SA, didn't sell as much stuff, which made their value go down. The company that makes things for homes, Reckitt Benckiser Group Plc, also didn't do as well as people expected. Another company, Worldline SA, had a really tough time. Their value went down by more than 50% - that's the biggest drop they've ever had! They had to say that they don't think they're going to make as much money this year as they thought. There's a similar story for a company called Nexi SpA - they saw their value drop by more than 10%.

But, there were some companies in Europe that did really well. Deutsche Bank AG, for example, did much better than expected. They said they're going to give more money back to the people who own their company because they made more money from their corporate bank and got more money from people putting money in the bank. Two other companies, Swedish steelmaker SSAB AB and French software company Dassault Systemes, did better than expected too.

The amount of money you get from 10-year Treasury bonds went up by a little bit, and the value of the US dollar went up for the second day in a row. This is because people are worried about prices going up a lot, so they're being careful with their money.

Evelyne Gomez-Liechti, who is a big expert on money stuff, said, "The amount of money you get from 10-year Treasury bonds will probably stay about the same as it's been recently. But we do think that the latest US data gives some support to the idea that interest rates will stay high for a while." She also said, "We wouldn’t be surprised if the amount of money you get from 10-year Treasury bonds goes up to 5% again."

In Asia, companies that sell things to regular people did really well because the government said they're going to help the economy and the stock market. The Hang Seng Tech Index, which keeps track of how well tech companies in Hong Kong are doing, went up by 2.2%. But, there's a company in China, Country Garden Holdings Co., that's having a tough time. They couldn't pay back a loan in dollars, which is a big problem. It's part of a bigger issue in China where a lot of companies that build things are having trouble paying back the money they owe.

The price of oil in the whole world, which is decided by a special group of people, stayed about the same. A big kind of oil called Brent crude costs about $88 for a barrel, and a different kind called West Texas Intermediate costs about $84. The US and Saudi Arabia said they're going to try really hard to talk to each other and work things out, which made people less worried that something bad would happen to the oil market.

Important Things Happening This Week:

On Wednesday, Canada is going to decide if they want to change how much money they charge for people to borrow money.
Also on Wednesday, we'll find out if a lot of people are buying new homes in the US.
On Wednesday, two big companies, IBM and Meta, will tell us how much money they made.
On Thursday, the big group in Europe that decides how much money it costs to borrow money will make a decision. The person in charge, Christine Lagarde, will also talk to reporters.
On Thursday, we'll find out if a lot of people are buying and selling things in the US.
On Thursday, two more big companies, Intel and Amazon, will tell us how much money they made.
On Friday, we'll find out if companies in China that make things out of metal are making a lot of money.
On Friday, we'll find out if things in Tokyo, which is a big city in Japan, are getting more or less expensive.
On Friday, we'll find out if prices for things in the US are going up a lot or just a little. We'll also find out if people are buying more or less stuff and how much money they're making.
Also on Friday, a really big company that sells a lot of oil, Exxon Mobil, will tell us how much money they made.

What's Happening in the Markets:

Companies that Sell Shares

The future price for S&P 500 shares went down by 0.2% as of 8:28 a.m. in New York.
The future price for Nasdaq 100 shares went down by 0.4%.
The future price for Dow Jones Industrial Average shares went up by 0.3%.
The main group of European companies went up by 0.1%.
The main group of companies from all over the world didn't change much.

Money from Different Countries

The US dollar got stronger by 0.2%.
The money in Europe, called the euro, went down by 0.2% and is now worth about $1.06.
The money in the UK, called the pound, went down by 0.3% and is now worth about $1.21.
The money in Japan didn't change much, and is still worth about 150 yen for $1.

Digital Money

Bitcoin, which is a kind of digital money, went up by 2.2% and is now worth about $34,396.
Ether, which is another kind of digital money, went up by 1% and is now worth about $1,789.

Money from Big Loans

If you lend the US government money for 10 years, they'll give you a little bit more money back. Now, they'll give you about 4.87% more than you gave them.
In Germany, if you lend the government money for 10 years, they'll give you a little bit more money back. Now, they'll give you about 2.85% more than you gave them.
In the UK, if you lend the government money for 10 years, they'll give you a little bit more money back. Now, they'll give you about 4.55% more than you gave them.

Things We Use Everyday

The oil we use to make cars and machines go costs about $84 for a barrel in the US.
The kind of oil we use in other parts of the world costs about $88 for a barrel.