Proactive Investors - 12:15pm: Apple gains on big buyback
Stocks rallied at midday led by Big Tech on the back of Apple Inc (NASDAQ:AAPL, ETR:APC)'s upbeat earnings and record $110 billion buyback program.
The tech-heavy Nasdaq led the gains, adding 2% at 16,152 points, with Apple 6.7% higher at about $185.
The S&P 500 and Dow Jones both gained 1.2% at 5,123 points and 38,670 points respectively.
Apple’s stronger-than-expected earnings on Thursday wrapped up a mixed week for US earnings.
“The tech giants have done well and suggest that the gloomy reception to Meta’s results for last quarter was unique. However, there has been weakness for US consumer discretionary, with signs that the least well-off consumers could be struggling as inflation remains high,” XTB research director Kathleen Brooks commented.
“Starbucks (NASDAQ:SBUX) fell sharply and is down 14% so far this week. CVS, the drug store chain, is the weakest performer in the S&P 500 this week after reporting disappointing earnings. McDonalds also reported disappointing earnings earlier this week, and Amazon (NASDAQ:AMZN) said that customers were looking for cheaper items in its e-commerce unit.”
9.52am: Wall Street sent higher on rate cut hopes
Weaker-than-expected jobs figures for April on Friday prompted growing optimism that the Federal Reserve could begin to mull interest rate cuts, sending markets higher early on.
The Dow Jones added 477 points to reach 38,705 as trading got underway, while the Nasdaq and S&P 500 added 276 and 52 points respectively to sit at 16,117 and 5,116.
Labour Department figures showed 175,000 payrolls were added to the US economy last month, against expectations for 243,000.
“If the labour market is starting to soften, it would help the Fed in their fight to get inflation all the way back to target,” Validus Risk Management’s Ryan Brandham commented.
“Consequently, for today’s session, we would expect the market to price in more rate cuts in the US for 2024.”
Also providing upward pressure was Apple Inc (NASDAQ:AAPL, ETR:APC), which climbed 6.8% as the market opened following a well-received second-quarter update on Thursday evening.
Amgen Inc (NASDAQ:AMGN, ETR:AMG) saw even stronger gains of 12.3% after hinting toward encouraging interim results from a trial of its experimental weight-loss drug MariTide.
Cybersecurity firm Fortinet Inc (NASDAQ:FTNT) slumped 7% in the meantime, after expectation-beating results on Thursday failed to deter investors from a larger-than-anticipated fall in quarterly billings.
8.51am: Markets jump as US jobs data surprises
Markets on both sides of the Atlantic received a boost after US jobs data showed fewer payrolls were added in April than expected, in turn boosting hopes for base rate cuts.
Nonfarm payrolls jumped by 175,000 in April, US Labour Department data showed on Friday, below analysts’ expectations for a 243,000 increase.
Average earnings climbed by 0.2% over the month, again below expectations, with unemployment coming in at 3.9%, against an anticipated 3.8%.
“Markets and central bankers have been looking for evidence that disinflation may be ahead, and today’s figures could indicate that the economy is slowing down,” Charles Schwab (NYSE:SCHW) analysts said.
“A dive in the labour market may be what it takes to push the Fed from a stroll to a sprint.”
The FTSE 100 jumped further on the news to yet another high of 8,240, before scaling back to 8,229 - up 51 points for the day.
Futures trading had the Dow Jones, Nasdaq and S&P 500 adding 501, 275 and 60 points respectively in the meantime.
7.03am: Wall Street seen higher
Apple Inc (NASDAQ:AAPL, ETR:APC) is set to soar as the market opens on Friday, aiding the Dow Jones to a 302-point gain to reach 38,684.
Shares in the technology giant were up 6% in pre-market trading, after Apple beat expectations with second-quarter results and authorised a record-breaking US$110 billion buyback.
Futures trading had the Nasdaq and S&P 500 up 112 and 18 points respectively in the meantime, at 17,762 at 5,110.
XTB analyst Kathleen Brooks said Apple’s better-than-expected results, “mega” buyback and push into artificial intelligence were all buoying the stock.
On the latter, she added: “After the company abandoned its driverless car project, Apple lagged in the AI stakes. It said that it is investing in integrating AI into its hardware and software using chips made in-house and concentrating on privacy and security.
“Its experience with privacy and security on its iPhones and other devices could give it an advantage over its rivals.”
Traders also awaited jobs data for April on Friday, with expectations being for an additional 240,000 payrolls to have been created over the month.
This would mark the slowest rate of growth since November, with markets also eyeing wage growth data in the context of prospective interest rate cuts by the Federal Reserve, according to Brooks.