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Tech giants in the spotlight

With tech stocks driving the stock market rally in the US in early 2024, all eyes are on market reports from major technology companies this week. Yesterday's 12% gain in Tesla shares despite missing quarterly revenue underscored the positive market sentiment when Meta reported its first quarter results after the close yesterday. However, Meta shares fell by up to 19% in after-hours trading due to weak revenue and artificial intelligence (AI) spending guidance. The major stock indices in the USA and Asia were mixed yesterday and today.

Dominique Stutz, LGT
Tempo di lettura
5 minuto
Meta company sign
© Shutterstock

Social media company Meta exceeded high expectations with revenue growth of 27% to USD 36.5 billion and a doubling of profit to USD 12.4 billion. However, the company's shares, which have risen by more than 40% so far this year, fell by up to 19% in after-hours trading, wiping out more than USD 200 billion in market capitalisation. Investors weren't content with the high expenditure on artificial intelligence and weaker revenue forecast.

Alphabet, which publishes its results today together with Microsoft, was one of the biggest losers with a decline of 3.3%. Microsoft, Amazon and social media companies also slipped in after-hour trading after the Meta report.

In New York trading, gains fell slightly ahead of Meta's quarterly report. The technology-heavy Nasdaq 100 closed 0.3% higher at 17,526.80 points. The Dow Jones Industrial fell by 0.1% to 38,460.92 points after four consecutive days of gains. The broad market S&P500 barely moved with a small gain of 0.02% to 5071.63 points.

Stock markets in the Asia-Pacific region were mixed. The South Korean Kospi fell by 1.5%. The Hang Seng Index in Hong Kong gained 0.1%, while the Shanghai Composite was down slightly at 0.05%. In Tokyo, the Nikkei 225 was slightly in the green. The markets in Australia and New Zealand are closed today for a public holiday.

Expectations are also brightening in Europe: Sentiment among German companies has improved and the ifo business climate index rose to 89.4 points in April, up from 87.9 points in March. This means that the index has climbed for the third time in a row. The economy is stabilising - in particular thanks to the service sector, which is also driving growth in economic activity in the eurozone. The Purchasing Managers' Index (PMI) released this week showed a growth value of 51.4 this month. These positive signals come after Europe's largest economy, Germany, shrank throughout 2023 and the eurozone economy only narrowly escaped a recession at the end of 2023.

In addition, Bundesbank President Joachim Nagel has said he is in favour of a rate cut in June if data - such as wage growth in the first quarter - boosts confidence in achieving the 2% inflation target. However, he warns that a series of rate cuts would not necessarily follow. He is not yet fully convinced that inflation will return to target in a timely and sustainable manner. Core inflation, particularly in the services sector, remains high. The German DAX rose by 0.5% on Wednesday and the Euro Stoxx 50 fell by 0.4%.

The ZEW Economic Sentiment Index for Switzerland shows a sustained upward trend for the third time in a row with an index value of 17.6 compared to the previous value of 11.5. This sustained positive sentiment indicates growing confidence in the Swiss economy. However, the Swiss stock market fell on Wednesday, mainly due to the heavyweight Roche (-3.3%) and UBS shares (-2.9%). The Swiss benchmark index SMI ended the trading day at 11,370.74 points, down 0.9% and thus reaching its low for the day.

Corporate news in focus: Quarterly figures from Alphabet, BASF, BNP Paribas, Deutsche Bank, Holcim, Idorsia, Inficon, Merck Co, Microsoft, Nestle, Sanofi

Economic data in focus: Germany GfK Consumer Confidence Index, USA Gross Domestic Product, USA Initial Jobless Claims


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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
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