US stock markets recover from tech earnings shock

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Stock markets rebounded on Friday from the shock of disappointing earnings reports from giant tech companies that added to fears of a global recession according to traders.

The week saw missing results in forecasts from some of the world’s biggest companies, including Apple, Amazon, Facebook parent company Meta and Google parent company Alphabet.

This caused steep stock price losses for some of the titans, in turn sending the values ​​of tech companies around the world plummeting.

The tech-heavy Nasdaq Composite opened lower on Friday but quickly followed the Dow and S&P 500 higher.

“It was a week of mostly disappointing results from the US tech giants, which put significant pressure on the Nasdaq,” said market analyst Fawad Razaqzada at City Index and FOREX.com. .

Amazon, which on Thursday predicted slower sales growth during the year-end shopping season after announcing a drop in third-quarter profits, saw its shares fall about 10% as trading began. Friday, although he recovered part of this ground. in the morning talks.

Even if the Nasdaq rose, “there’s a good chance the tech-heavy index will drop again as we head into the end of the week,” he added.

Most European markets also pulled higher.

Investors are actually looking for data showing that the US Federal Reserve’s rate hikes are starting to slow inflation and the economy, which they hope will convince policymakers to slow or pause further rate hikes. of interest.

A 10% monthly drop in US pending home sales, a much bigger drop than expected, showed that rising interest rates are indeed having an impact on the housing market.

But the latest inflation data showed that prices and wages continued to rise, and consumers also continued to spend for the time being.

Briefing.com’s Patrick O’Hare said the latest inflation numbers “shouldn’t cause the Fed to reconsider its aggressive rate hike plans.”

On the foreign exchange market on Friday, the euro was back below parity against the dollar after official data on Thursday showed that the US economy rebounded in the third quarter.

Surprise figures on Friday showing Europe’s biggest economy, Germany, also grew in the July-September period, failed to push the euro above a dollar, where it was earlier in the week for the first time since September.

Meanwhile, high inflation figures for Germany at 10.4% and Italy at 11.9% do not bode well for the European Central Bank to abandon its interest rate hikes.

Elsewhere, the yen was down against the dollar after Japanese Prime Minister Fumio Kishida said the country would spend $260 billion on a stimulus package to cushion the weak economy.

The yen has plunged to a 32-year low against the dollar in recent weeks as Japan’s central bank refused to raise interest rates despite soaring inflation fueled by soaring energy prices.

“The Japanese yen is again the worst performer today after the Bank of Japan kept monetary policy unchanged,” said market analyst Michael Hewson at CMC Markets.

The rand was lower at 18.14 rand/$, while the JSE’s All-Share Index ended Friday down more than one percent.

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