Day Ahead: Top 3 things to watch
Investing.com - Here's a preview of the top 3 things that could rock markets Friday, April 20.
1. US Q1 GDP, Consumer Sentiment Data in Focus
U.S. bond yields are expected to remain in focus Friday as first-quarter GDP and inflation data could confirm investors’ bullish expectations on both the U.S. economy and inflation. Consumer sentiment data is also expected to garner investor attention.
The preliminary reading of first-quarter U.S. GDP at 08:30am ET is expected to show the economy expanded 2.0%, down from the fourth quarter growth of 2.5%. While the GDP price index is expected to show a 2.2% reading.
The Employment Cost Index, which measures the change in the price businesses and the government pay for civilian labor, is expected to show a reading of 0.7% slightly above the 0.6% growth seen in the fourth quarter.
Michigan’s consumer expectations due 10:00 am, are expected to show a reading of 86.9 for April, while consumer sentiment is forecast to show a reading of 98.0 up from 97.8 seen in the previous month.
The fall in US bond prices following the dramatic rise in treasury yields attracted a wave of buyers on Thursday, pressuring the 10-year treasury yield below 3%.
The dollar, however, traded higher against a basket of major currencies on Thursday as falling bond yields were offset by euro weakness after ECB Draghi delivered a mixed message on the Eurozone economy.
2. Amazon, Microsoft to Extend Nasdaq Rally?
Shares of Amazon.com Inc (NASDAQ:AMZN) rallied more than 6% to $1,617.03 in afterhours trade on Thursday, 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), however, fell in afterhours trade despite the tech giant reporting earnings and revenue that beat analysts’ 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.
The NASDAQ closed 1.64% at 7,118.68.
3. Baker Hughes Rig Count Data on Tap
The weekly instalment of drilling activity from Baker Hughes on Friday at 1:00 pm ET, 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.
Investors are also expected to monitor any further evidence of a shift in sentiment on the Iranian nuclear deal after French President Emmanuel Macron said on Wednesday that he expected U.S. President Donald Trump to pull out of a deal with Iran, reached in 2015.
Crude futures settled higher amid renewed expectations for the U.S. to scrap the Iranian nuclear deal.