Stocks Seek Direction Before Tech Earnings Results

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Stock MarketsEuropean and Wall Street stock markets were largely flat Monday after some losses in Asia, as investors awaited earnings from US tech behemoths this week.

Bourses in New York, London, Frankfurt, and Paris dipped in and out of negative territory throughout the day. All eyes will be on results from the likes of Amazon, Facebook owner Meta, Google-parent Alphabet, and Microsoft.

“The first quarter earnings reporting period will go into hyperdrive this week, which is partly why things are starting today at a slow pace,” said analyst Patrick O’Hare.

The US calendar also includes readings on first-quarter gross domestic product and an update on consumer confidence.

German business confidence edged up in April, a survey showed, but the rise was weaker than expected.

Manufacturers have been boosted in the short term by lower energy prices — which had surged last year following Russia’s invasion of Ukraine — and the reopening of China’s economy after long Covid shutdowns.

But the German economy was still “far away from strong growth” and it would “continue its flirtation with recession,” warned ING economist Carsten Brzeski.

Also this week, investors will be watching important economic data from South Korea, Australia and the eurozone, as well as Bank of Japan chief Kazuo Ueda’s approach as he chairs his first key policy meeting.

In parliament on Monday, Ueda suggested the bank would stay the course in terms of monetary stimulus, adding that inflation was expected to cool below two percent in the second half of the fiscal year ending next March.

– Bank trouble –

Elsewhere on the corporate front, Credit Suisse revealed that more than $68 billion was withdrawn in the first three months of 2023, in what is likely its final quarterly results before it is swallowed by rival UBS.

The bank saw its net profit swell to $13.9 billion — up from a significant loss a year earlier — after holders of high-risk Credit Suisse debt were wiped out in the emergency takeover deal.

The problems at Credit Suisse will continue to prompt fallout across the banking sector, said Michael Hewson, chief market analyst at CMC Markets UK.

“It’s set to be a big week for the UK banking sector in the wake of the problems thrown up by the collapse of Credit Suisse and subsequent turmoil across the sector,” he said.

“This morning investors got the first look below the bonnet so to speak and it wasn’t a pretty sight…. not so much a bank run as a sprint.”

Later Monday, First Republic Bank, reported a more than 40 percent drop in its deposits in the first quarter this year but added that the situation has stabilized since late March.

Shares fell more than 20 percent in after-hours trading, following its first earnings report since the dramatic failures of Silicon Valley Bank (SVB) and Signature Bank last month shone a spotlight on regional lenders and their vulnerabilities

– Key figures around 2130 GMT –

New York – Dow: UP 0.2 percent at 33,875.40 (close)

New York – S&P 500: UP 0.1 percent at 4,137.04 (close)

New York – Nasdaq: DOWN 0.3 percent at 12,037.20 (close)

London – FTSE 100: FLAT at 7,912.20 (close)

Frankfurt – DOWN 0.1 percent at 15,863.95 (close)

Paris – CAC 40: FLAT at 7,573.86 (close)

EURO STOXX 50: DOWN 0.2 percent at 4,401.80 (close)

Tokyo – Nikkei 225: UP 0.1 percent at 28,593.52 (close)

Hong Kong – Hang Seng Index: DOWN 0.6 percent at 19,959.94 (close)

Shanghai – Composite: DOWN 0.8 percent at 3,275.41 (close)

Euro/dollar: UP at $1.1050 from $1.0986 on Friday

Pound/dollar: UP at $1.2485 from $1.2432

Dollar/yen: DOWN at 134.14 yen from 134.16 yen

Euro/pound: UP at 88.46 pence from 88.37 pence

West Texas Intermediate: UP 1.1 percent at $78.76 per barrel

Brent North Sea crude: UP 1.3 percent at $82.73 per barrel



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