Global markets were higher overnight, with US Markets (S&P 500 Index, +2.5%) bouncing back after strong earnings for most of the market that reported, offsetting concerns around the economy.
The US economy first quarter GDP fell -1.4% from last year annualised, as net trade and inventories detracted from quarterly growth. Importantly though, domestic demand remained strong, with consumption growing at a +2.7% annualised pace in first quarter and investment a very strong +9.2%.
Meta (Facebook) was the standout, rising +17.6% on its result, which encouraged a strong tech recovery rally. Chip maker Qualcomm bounced +9.6% after the chipmaker delivered strong earnings and a bullish outlook for third. Gains were broad-based with all sectors trading higher.
European markets (Stoxx 600 index, +0.6%) were up again as positive earnings result had investors in a more positive mood.
Apple (AAPL:NASDAQ)
Apple shares are currently down -2% in after-hours trade following the release of its quarterly result after the bell, trimming its 4.5% gain overnight.
Apple released a strong result, revenue rose +9% year on year to $97.28 billion (beating expectations by $3.39 billion) and earnings came in at $1.52 per share, well ahead of expectations of $1.43 per share – bucking investor fears about how a weakening macroeconomic backdrop would affect the company.
Apple increased its dividend by 5% to 23 cents per share and authorised a $90 billion share buyback programme.
However, Apple did stat that it could potential take a $8 billion hit due to supply chain chain issues which did not bode well.
We are BUY rated on Apple and believe supply chain issues would be a minor short-term headwind for Apple.
Australia & New Zealand Market Movers
The Australian market was up yesterday (ASX200 index, +1.3%) following two days of losses following positive updates from local companies.
AMP capital lead gains up +13.2% after agreeing to sell its international infrastructure business for $462m. Fortescue was another strong gainer up +8.1% after a solid trading update and the company lifting their guidance for 2022 which support gains across other major miners.
Coles lifted +0.6% after its strong fourth quarter trading update with no covid-19 related restrictions despite store closures due to flooding, and announced it would be increasing prices to cover cost inflation.
The New Zealand market was up on Thursday (NZX 50 index, +1.3%), strong earnings in the US boosting investor sentiment with strong gains across most of the market, to try offset rough month of trading.
NZ King Salmon continues to be highly volatile reporting the largest gain yesterday up +6.9%, while Tourism Holdings limited rose +5.3% despite the Australian competition regulator saying it was concerned a proposed acquisition may hurt competition.
Fisher and Paykel did not get the same treatment and slipped 1.9%, now becoming the second largest NZX listed company, being dethroned by Meridian Energy.
3 Things Markets will be Watching this Week
- Geopolitical risks remain elevated with the Russia/Ukraine conflict.
- US first quarter GDP data and a huge week of earnings in the US with Alphabet, Meta, Apple, Ford, Amazon, Chevron and Exxon Mobil all due to report.
- Locally, Australian CPI (inflation) data trading updates from Australian Oil and Gas producers.