Wednesday, April 27, here are five things you must know:
1. -- Stock Futures Rebound On Earnings Boost, But Bears Continue to Blame
In the wake of collective concerns about Fed rate rises, China's lockdown, and Russia's war on Ukraine, US equity futures expected to rebound from one of the largest one-day declines of the past two years Wednesday.
Following the Dow's higher-than-expected third quarter earnings last night, Microsoft MSFT shares might provide some early support, resulting in a robust cloud and computing business helping the Nasdaq recover from a 514 point decrease that stampered the index to its lowest levels since December of 2020.
After Gazprom, a state-controlled energy giant, suspended natural gas deliveries to Poland and Bulgaria because it failed to meet an earlier demand to pay in roubles, technology sentiment will be able to fight the escalation of tensions between Russia and its European neighbors.
The move, widely described as a warning to Germany and other Western European nations that have challenged Russia's invasion of Ukraine in February, pushed the euro to a five-month low of 1.0597, while strengthening regional equities in early Frankfurt trading.
The US dollar index continues to rise at least two years against its global peers as a result of its strongest April gain in more than five years, and was increased by another 0.43 percent to 102.738, as traders price-in the consequences of 50 basis point rate rises at both of the Federal Reserve's next two policy meetings and move into a safe-haven asset.
That in part, has boosted the market's major volatility index, the VIX, that is far beyond the 30 point mark, a level traders typically associate with significant intra-day moves for large indices.
This as well as another busy corporate earnings with potential impact on Wall Street again Wednesday, with Boeing () -, T-Mobile US () - and Kraft Heinz () reporting before the bell and Meta Platforms () -, Ford () -, PayPal () - and Qualcomm () - are expected to close their trading.
Futures linked to the Dow Jones Industrial Average are indicating a 390 point opening bell increase, while those linked to the S&P 500, which has dropped by 12.4% for the year, are priced for a 41 point increase. Futures linked to the US-focused Nasdaq are considering a 137 point opening bell increase.
2. -- Microsoft Forecasts Impressive Cloud Growth and Addressing Azure Concerns
Microsoft's stock has risen higher in pre-market trading, owing to the tech giant's forecasting stronger-than-expected revenue growth for its major divisions, dwindling concerns about the pace of rises in its Azure cloud offering.
Revenues for Microsoft's Intelligent Cloud division, which houses Azure, would equate to $21.1 billion and $21.35 billion for the current quarter, generating double-digit percentage gains in the next fiscal year.
Azure's flagship cloud offering increased 46% from last year, but remained unchanged for the third quarter, thanks to a combined group sale of 18% to a record $49.4 billion for the three months ending in March, according to a Street consensus estimate.
"Microsoft's results, guidance, and tone were optimistic for MSFT shares, and they might be useful to modestly alleviate widespread macro worries for software investors, according to BMO Capital Markets analyst Keith Bachman.
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Microsoft's stock was marked 5.3 percent higher in pre-market trading, indicating a $284.50 opening bell price.
3. -- Google Shares a Slide On Revenue Miss, and a $70 Billion Buyback Softens Blow
Shares in Alphabet () fell in pre-market trading after the search and advertising giant reported lower-than-expected first quarter earnings as a result of a global rebound in ad sales linked in part to Russia's war on Ukraine.
Google's top line fell 6.7 percent from last year to 24.62 per share over the three months ended in March, a tally that missed Street expectations by around $1.14. Group revenues were also disappointed, even after a 23% increase to $68.01 billion, with the Street offering only $54.9 billion. Google's activities in Russia and European clients have slashed marketing budgets.
The addition of a $70 million share buyback to the group's capital return intentions halted some of last night's post-market slump, but Google's stock was still marked 3.5 percent lower in pre-market trading, indicating a $2,314.25 opening bell price.
Twitter Shares an Extend Slide As the Musk's Takeover Problem Is Tied
Shares continue to decline in pre-market trading, down well below the $54.20 level Elon Musk has agreed to pay for the social media website, as investors continue to doubt the terms of Tesla's $44 billion purchase.
Musk, according to some reports on the world's richest man, will be required to pay a $1 billion termination fee if his efforts to buy Twitter and take it private fail.
According to filings, Twitter will have to pay Musk a similar amount, although both sides will have the option of walking away if the move isn't completed by October 24. If one is proposed, Twitter will entitle and not solicit a superior offer to Musk.
Musk may have violated terms of the merger agreement with Twitter when he complained about the company's decision to censor pre-election statements on Hunter Biden, President Joe Biden's son, and his affiliation with business leaders in China and Ukraine.
In pre-market trading, Twitter shares fell 2%, indicating a cost of $48.70 per opening bell.
5. -- Visa shares rise as financial recovery drives Q1 earnings down.
Visa () - shares have risen in pre-market trading following the credit card issuer's earnings in the first quarter, fueled in part by business and personal travel as a result of a "short-lived" spike in Omicron infections.
Visa paid $1.79 per share for the three months ending in March, far ahead of the Street consensus prediction. Group revenues increased by 25% to $7.2 billion. Cross border spending was up 38%, and its suspension of payments in Russia only affected roughly 4% of its revenues and resulted in a modest $60 million charge.
As travel and entertainment expenses improved, American Express () surpassed Street projections by nearly 30%, to $11.74 billion.
"The implications of the Omicron variation were short lived, and the global economic recovery that started in the middle of last year," said Visa CEO Elon Musk.
Visa shares were marked 4.75% higher in pre-market trading, indicating a $210.66 opening bell price.
