US equities edged higher on Wednesday, while shares in Meta sank in after hours trading following a weak revenue forecast.
United States
Shares in Facebook owner Meta fell -14% in after-hours trading following a weak revenue forecast and increased spending estimates amid an increased push into artificial intelligence. The company sees total expenses for the year now between US$96-99 billion, up from US$94-99 billion previously, while revenue for the second quarter is estimated between US$36.5-39 billion, this compares to expectations of US$38.24 billion. Elsewhere, shares in Tesla were 12% higher following its earnings results after the close on Tuesday.
The S&P500 was just 0.02% higher along with the Nasdaq Composite 0.1% while the Russell 2000 was -0.36% weaker. In economic data, the latest durable goods orders for March were slightly above estimates, coming in at 2.6% vs 2.5% forecast. In focus tonight is the latest GDP data for Q1, expected to show the economy expanded at a 2.5% annualised rate, moderating from a 3.4% annualised rate in Q4 2023.
Europe
European equities finished lower, weighed by earnings updates as well as geopolitical tensions. Shares in Kering, the product manufacturer, fell -6.87% in Paris after warning profit will fall in the first half of the year. Elsewhere, geopolitical tensions rose after the Israeli military said it struck around 40 sites linked to Hezbollah in Southern Lebanon, a seemingly more intense attack than previous ones. The Euro Stoxx 600 was -0.43% lower along with the DAX -0.27%, CAC -0.17% and FTSE100 -0.06%.
Australia
The ASX will be closed today, while futures are pointing to a -58 points or -0.75% decline on Friday. The index was little changed on Wednesday, down just -0.01% after initially rising as much as 0.53%. The paring of gains followed inflation data for Q1 which was higher than expected, with headline prices rising 3.6% over the year vs 3.5% expected and the trimmed mean rising 4% vs 3.8% forecast. In reaction, the Australian Dollar was 0.17% higher at 0.6498, the 3-year government bond yield surged 18.7 basis points to 4.036% while no rate cuts are currently priced in for 2024 based on cash rate futures.
Australian Inflation (YoY %)
Commodities
Oil prices are modestly weaker overnight despite the increase in geopolitical tensions, with both WTI and Brent crude down -0.66% and -0.41% respectively. Iron ore futures in Singapore climbed 4.56% on Wednesday and are 0.62% higher this morning at US$118.65, with copper 0.52% higher. Gold is modestly weaker by -0.25% to US$2,316 an oz, silver is also -0.53% lower along with Bitcoin -3.47%.
Economic Calendar
German Consumer Confidence (MoM May) 16:00
ECB Economic Bulletin 18:00
US GDP (QoQ Q1) 22:30
This article was written by James Woods, Portfolio Manager, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
