Introduction
The past week has been a rollercoaster for investors as Big Tech companies released their quarterly updates, resulting in a mix of highs and lows across the market. Major indexes experienced a slide, influenced by the performances of Alphabet, Meta, and Apple. With another crucial week ahead, stakeholders are keenly observing the market’s movements.
What happened last week?
US
Microsoft and Alphabet: The week started with Microsoft soaring high with impressive cloud-driven revenue growth, while Alphabet remained grounded with less-than-expected results.
Meta: Presented good numbers but projected a gloomier future, causing unrest among investors.
Amazon: Ended the week on a brighter note, showing promising results and offering some relief to investors.
US Economy: Surprisingly grew by 4.9% annually in Q3, defying expectations and showing resilience against the Federal Reserve’s interest rate hikes.
Chevron and Hess: Announced a massive $60 billion acquisition, marking the second significant oil deal of the month.
Europe
Roche and Telavant: Engaged in a mega-merger with a $7.1 billion deal.
European Central Bank: Put a halt to a yearlong series of interest rate increases, as the region stands on the verge of a recession.
Asia
China: Introduced new measures to support the economy, showing a proactive approach to stimulate growth.
What does all this mean?
Microsoft and Amazon: Excelled in their quarterly reports, particularly in cloud-driven revenue and profit, setting a positive tone for their future.
Alphabet: Although it showed good advertising revenues, it fell short in cloud metrics, indicating a need for improvement in its AI capabilities.
Meta: Despite disappointing investors, it showed substantial revenue growth and a willingness to cut costs.
Global Economy: Showed a stark contrast between the thriving US economy and the struggling European and Asian economies, with the US outshining its global counterparts.
Mergers and Acquisitions: Saw a resurgence, indicating a return of confidence in the corporate world. US oil giant Chevron announced a $60 billion acquisition of Hess (the second massive oil deal this month after Exxon’s $65 billion merger with Pioneer), and Swiss pharma company Roche chipped in with a $7 billion purchase of Telavant.
The global economic landscape is currently marked by stark contrasts and diverging paths, painting a picture of uncertainty and resilience. The United States stands out as a beacon of strength, showcasing impressive economic growth amidst global turmoil. On the other hand, European economies are navigating through turbulent waters, with signs of an impending recession becoming increasingly evident. China, too, finds itself at a critical juncture, grappling with the dual challenges of slowing economic growth and the looming threat of deflation.
This week’s focus: Big Tech’s big future
AI is the underlying theme in Big Tech’s future, with Microsoft leading the way and Alphabet needing to catch up. The technology has yet to make a significant impact on Meta, Amazon, and Apple, but it is bubbling under the surface, ready to influence future strategies and products.
The week ahead
Economic Reports: Key economic data from Germany, the Euro area, China, and the US will be released.
Earnings Reports: Major companies like McDonald’s, MSCI, Advanced Micro Devices, Qualcomm, Estée Lauder, Apple, and Moderna are set to release their earnings.
Interest Rate Decisions: The Federal Reserve, Bank of Japan, and Bank of England will make crucial interest rate decisions.