Investing.com - Here are the top five things you need to know in financial markets on Friday, April 27:
1. U.S. advanced first quarter GDP in focus
Investors will keep an eye on a preliminary reading of first-quarter U.S. growth due at 8:30AM ET (12:30GMT) Friday to gauge if the world's largest economy is strong enough to withstand multiple rate hikes in the coming months.
The report is expected to show growth in the January-March period slowing from an annual rate of 2.9% to 2.0%, as consumer spending is forecast to have slowed sharply from the last quarter.
Despite the expected slowdown, the data is unlikely to make much impact on Fed policymakers given the expected boost over the coming months from the Trump administration tax cuts.
However, central banks are closely watching growth figures for signs of a global slowdown. The U.S. data will arrive after the UK registered its slowest growth in five years earlier on Friday, while the French economy also slowed more than expected to its lowest level since the third quarter of 2016.
Besides the GDP report, the University of Michigan will publish its revision of consumer sentiment for April at 10:00AM ET (14:00GMT). A slight uptick to 98.0 from the initial reading of 97.8 is the consensus forecast.
2. Amazon and Microsoft expected to support tech stocks
Shares of Amazon.com (NASDAQ:AMZN) rallied nearly 7% to in pre-market trade on Friday, after the e-commerce giant posted earnings that beat on both the top and bottom line.
Amazon reported earnings of $3.27 per share on $51.04 billion in revenue, which was well above analysts’ expectations for earnings of $1.26 per share on $49.78 billion in revenue.
Amazon Web Services, the cloud service platform, continued to show robust growth, as revenue rose 49% to $5.44 billion, topping expectations of $5.25 billion.
Shares of Microsoft Corporation (NASDAQ:MSFT) also gained nearly 2% in pre-market trade on Friday after topping consensus expectations.
Microsoft reported earnings of 95 cents per share on $26.82 billion in revenue, beating analysts’ expectations for earnings of 85 cents per share on $25.77 billion in revenue.
Microsoft’s personal computing segment posted revenue of $9.92 billion for the quarter, above analysts’ estimates of $9.25 billion.
Meanwhile, Microsoft’s transition from its legacy businesses to cloud remained on track as its Intelligent Cloud segment posted revenues of $7.90 billion beating Wall Street estimates of $7.68 billion.
Also on watch Friday, oil giants Chevron (NYSE:CVX) and Exxon (NYSE:XOM) will release quarterly earnings before the opening bell.
3. U.S. stocks point to mixed open ahead of GDP
After solid gains a day earlier, U.S. futures pointed to a more cautious stance on Friday ahead of first quarter GDP data. While both the Dow and S&P 500 looked set to register slight losses, tech stocks were holding onto slight gains as Amazon and Microsoft supported sentiment. At 5:36AM ET (9:36GMT), the blue-chip Dow futures fell 114 points, or 0.47%, S&P 500 futures lost 8 points, or 0.30%, while the Nasdaq 100 futures inched up 3 points, or 0.04%.
Elsewhere, European stocks headed for a fifth straight week of gains as well-received earnings from Spanish banks and a recovery in tech shares buoyed sentiment.
Earlier, Asian stocks closed higher as investors celebrated a rebound in tech stocks while markets in Seoul were underpinned by optimism as leaders of North and South Korea held their first summit in over a decade.
4. Oils cautious ahead of U.S. shale production data
The weekly installment of drilling activity from Baker Hughes on Friday at 1:00PM ET (17:00GMT) will provide investors with fresh insight into U.S. oil production and demand after data last week showed the number of U.S. oil rigs rose for the third straight week.
The weekly rig count is an important barometer for the drilling industry and serves as a proxy for oil production and oil services demand.
Market participants remain concerned that rising U.S. output could potentially derail OPEC's effort to end a supply glut.
Domestic oil production - driven by shale extraction - rose to an all-time high of 10.52 million bpd last week, the Energy Information Administration (EIA) said, staying above Saudi Arabia's output levels and within reach of Russia, the world's biggest crude producer.
OPEC and other producers, including Russia, agreed to cut output by about 1.8 million barrels per day (bpd) in November last year to slash global inventories to the five year-average. The arrangement is set to expire at the end of 2018 although traders hold hopes that it could be extended into next year when OPEC gathers for its meeting in June.
U.S. crude oil futures fell 0.45% to $67.88 at 5:38AM ET (9:38GMT), while Brent oil traded down 0.45% to $74.40.
5. BoJ stands pat amid central bank immobility
The Bank of Japan left its monetary stimulus program unchanged on Friday, as expected, but removed previous wording on reaching its 2% inflation around fiscal 2019, underscoring just how much more time will be needed to reach its 2% target. Its overall inflation forecasts were largely unchanged.
The move came after the European Central Bank also held steady on Thursday with ECB president Mario Draghi refraining from discussing the end of asset purchases or even the stronger euro as they focused on gauging the health of the region’s economy. Momentum has waned since the start of the year, and any pickup in underlying inflation appears to have stalled.
Although the Federal Reserve has led the central banker pack with six interest rate increases since 2015, global policymakers are in a wait-and-see mode as they look for signs of a slowdown in global growth. The Fed is expected to hold steady at its meeting next week, though markets are pricing in the next rate hike for June and odds for an additional two posterior increases by the end of the year were hovering just below the 50% threshold.