Fixed Income Market Overview
U.S. Treasury yields surged on Thursday in response to the first-quarter GDP report revealing decelerating growth alongside escalating consumer prices. The 10-year Treasury yield ascended by 4.8 basis points to 4.702%, marking its zenith since November 2 of the preceding year, while the 2-year Treasury yield augmented approximately 5.8 basis points to 4.995%, surpassing a previous high set on November 14. Notably, a basis point denotes a minute increment of 0.01 percentage point. The GDP data disclosed a growth rate of 1.6%, falling short of economists’ consensus forecast of 2.4%, triggering apprehension within financial circles. Concurrently, the report unveiled a 3.4% surge in consumer prices, markedly eclipsing the previous quarter’s 1.8% increment. This development accentuated concerns surrounding sustained inflationary pressures and cast uncertainty over the Federal Reserve’s capacity to enact rate cuts amidst a decelerating economic landscape. The impending policy meeting of the Federal Reserve next week engenders keen anticipation among market participants, who, despite anticipating unchanged interest rates, remain vigilant for subtle indications regarding the timing and magnitude of prospective rate adjustments throughout the year, as discerned through the lens of CME Group’s FedWatch Tool.
Nvidia-backed startup Synthesia unveils AI avatars that can convey human emotions.
Deutsche Bank shares up 8% after first-quarter profit beat, investment banking recovery.
BHP makes $39 billion bid for Anglo American in mining mega play.
Oil prices pull back as U.S. economic growth disappoints.
Meta loses $200 billion in value as Zuckerberg focuses earnings call on all the ways company bleeds cash.
Major Indicies
| Symbol | Price | Change | %Change |
|---|---|---|---|
| DJIA | 38,085.80 | -375.12 | -0.98%↓ |
| NASDAQ | 17,430.50 | -96.30 | -0.55%↓ |
| SNP 500 | 5,048.42 | -23.21 | -0.46%↓ |
| NIKKEI | 37,628.48 | -831.60 | -2.16%↓ |
| HIS | 17,284.54 | 83.27 | 0.48%↑ |
| VIX | 15.37 | -0.60 | -3.76%↓ |
Bonds
| Name | Yeild | CHG |
|---|---|---|
| US 10-YR | 4.71% | 0.06 |
| US 30-YR | 4.82% | 0.04 |
| US 5-YR | 4.73% | 0.06 |
| JPN 10-YR | 0.90% | 0.01 |
| UK 10-YR | 4.37% | 0.04 |
Futures & Commodities
| Name | Last | Change | %Change |
|---|---|---|---|
| WTI CRUDE | 83.57 | 0.76 | 0.92%↑ |
| NAT GAS | 1.986 | 0.007 | 0.35%↑ |
| GOLD | 2,342.50 | 4.10 | 0.18%↑ |
| SILVER | 27.35 | 0.01 | 0.03%↑ |
| COPPER | 4.539 | 0.081 | 1.82%↑ |
Equity Market Overview
Alphabet
Alphabet, amidst concerns regarding its core Google ads business and profitability from AI investments, surpassed expectations in its recent earnings report, with a 15% revenue growth, the highest since early 2022. YouTube ad sales surged 20%, allaying fears about the future of online ads amidst the emergence of generative AI services like OpenAI’s ChatGPT. With a 12% jump in extended trading, pushing its market cap beyond $2 trillion, Alphabet demonstrated reacceleration in its advertising business, notably in Google Cloud, where revenue soared 28% to $9.57 billion. Despite increased competition and a shifting landscape, Alphabet remains optimistic about leveraging AI to enhance user experiences and financial performance, underscored by its inaugural dividend declaration and a $70 billion stock repurchase plan.
Microsoft
Microsoft’s fiscal third-quarter results surpassed Wall Street expectations, causing its shares to surge up to 5% in extended trading. The company reported earnings per share of $2.94 and revenue of $61.86 billion, beating analyst estimates. Revenue from the Intelligent Cloud segment grew 21%, with Azure and other cloud services seeing a 31% increase. The Productivity and Business Processes unit, including Office and LinkedIn, generated $19.57 billion, while More Personal Computing revenue reached $15.58 billion, driven by Windows and Xbox sales. Microsoft’s GitHub Copilot tool gained 1.8 million paid subscribers, and the company continues to invest in AI capabilities. Despite a capacity bottleneck affecting Azure AI growth, Microsoft remains optimistic about future prospects, with a focus on expanding its cloud services and AI offerings
Intel
Intel’s first-quarter earnings surpassed expectations for earnings per share but fell short on sales, leading to an 8% drop in its stock in extended trading. For the second quarter, Intel forecasted earnings of 10 cents per share on revenue of $13 billion, below analyst estimates. Despite reporting a net loss of $400 million, Intel saw a 9% year-over-year increase in revenue to $12.7 billion. CEO Pat Gelsinger emphasized the company’s long-term potential in enabling next-generation chip technologies. Intel Foundry, its chip manufacturing business, reported $4.4 billion in revenue but also faced a $2.5 billion operating loss in the March quarter. Client Computing sales surged 31% to $7.5 billion, while Data Center and AI business sales rose 5% to $3 billion.
