By Steve Goldstein
Online retailing behemoth Amazon /zigman2/quotes/210331248/composite AMZN -0.02% easily beat first-quarter earnings forecasts , benefiting both from e-commerce as well as cloud-services demand — joining fellow technology megacaps Alphabet /zigman2/quotes/205453964/composite GOOG -0.25% , Apple /zigman2/quotes/202934861/composite AAPL -0.64% , Facebook /zigman2/quotes/205064656/composite FB -0.0059% and Microsoft /zigman2/quotes/207732364/composite MSFT -0.59% in trumping sell-side earnings estimates.
Wasn’t the reopening of the economy supposed to hurt the tech giants? It doesn’t look like it so far, and that might be the biggest development this earnings season — that consumers are deciding to stick with their COVID-19 pandemic behavior even as vaccinations increase and restrictions are lifted. Corporate America also seems to be betting that consumers will stay online — the average advertising revenue growth of Alphabet, Facebook, Snap /zigman2/quotes/205087158/composite SNAP -2.03% , Pinterest /zigman2/quotes/211319641/composite PINS +2.72% , Twitter and Amazon was 55% in the first quarter, according to The Information, a tech news site.
“As we emerge from the pandemic, we expect to see many of the digital behaviors adopted by consumers in lockdowns to stick. Consequently, the tech megacaps that once again exceeded expectations in their earnings this week remain high quality options for investors,” says Nicholas Hancock, a tech, media and telecommunications analyst at Carmignac, a French fund management firm.
The cynics toward the tech giants have been wrong time and again, says Jani Ziedins, who writes the Cracked Market blog . “So much for fear of expensive, overbought, and every other cynical criticism thrown at these stocks. These companies keep doing what they are good at and it is little wonder their stock prices keep going up,” he writes.
“While this latest pop makes them even more expensive, high almost always gets even higher. Stick with what has been working and no doubt in a few weeks and months, people will be kicking themselves for not buying at these levels,” he advises.
Personal income surged
Data showed a stunning 21.1% jump in personal income for March — consensus expectations were for a 20% increase. Consumer spending jumped 4.2% and PCE core inflation rose 0.4%. Shortly after the open, data on the Chicago-area purchasing managers index and consumer sentiment will be released.
In the eurozone, gross domestic product fell by 0.6% in the first quarter , dragged down by a 1.7% retreat in Germany. Chinese economic data largely missed expectations.
Twitter /zigman2/quotes/203180645/composite TWTR -0.99% shares fell 12% in premarket trade, as the social-media service guided for worse current-quarter revenue than analysts anticipated. NIO /zigman2/quotes/204905836/composite NIO -3.01% , the Chinese electric-vehicle maker, reported stronger-than-expected results.
Microvision /zigman2/quotes/208153926/composite MVIS -4.45% , the laser-scanning technology company that has been popular with individual investors, may slide after reporting a worse-than-expected loss on smaller revenue than anticipated.
Chinese regulators summoned online financial services companies, including Tencent /zigman2/quotes/204605823/delayed HK:700 -0.58% and JD.com /zigman2/quotes/205122565/composite JD -0.83% , and told them to strengthen antimonopoly measures.
U.S. stocks ease at April’s end
After the 25th record close for the S&P 500 /zigman2/quotes/210599714/realtime SPX -0.20% on Thursday, U.S. stocks /zigman2/quotes/210598065/realtime DJIA -0.27% /zigman2/quotes/210599714/realtime SPX -0.20% /zigman2/quotes/210598365/realtime COMP -0.71% were under pressure. Oil prices /zigman2/quotes/211629951/delayed CL.1 +0.10% are also dropping , the dollar /zigman2/quotes/210598269/delayed DXY -0.0022% is higher and the yield on the 10-year Treasury /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y -0.90% was 1.63%.
For the first time since 2014, the rolling 10-year return from commodities is now positive. The trade of 2021, says Bank of America strategist Michael Hartnett, has been long copper /zigman2/quotes/210054311/delayed HG00 +0.18% — up 28% — and short the 30-year Treasury /zigman2/quotes/211347052/realtime BX:TMUBMUSD30Y -0.38% , which has fallen 14%.
The woman who returned Lady Gaga’s dogs was among five people arrested in connection with the dognapping and shooting of the pop’s singer’s dogwalker.
Here’s an unusual eBay listing — Queen Elizabeth II’s former gold-plated Nintendo Wii is up for sale.
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