Today's U.S. session proceeded in a great mood, however, the releases of major tech stocks Apple, Amazon and Alphabet, showed that Wall Street's largest companies are catching a clear breathlessness which has weighed on investor sentiment. As a result, the US500 is already approaching the 4160 point level, and NASDAQ is falling below 12 780 levels.
Apple (AAPL.US) negatively disappointed investors with weaker earnings per share and revenue, which came in below expectations by nearly $4 billion. Revenue from iPhone sales fell nearly 5% to $65.78 billion against $68.3 billion estimates. MacBook sales estimates diverged by more than 20%. Interestingly, sales revenue in China turned out to be nearly 10% higher, which may indicate the relative strength of Chinese consumers.
Amazon (AMZN.US) reported a sharp decline in earnings per share and failed to beat estimates for cloud computing revenue, which accounts for more than half of its profits. The e-commerce giant gave a very 'loose' estimate for Q1 2023 expecting operating profit in the range of $0 to $4 billion versus $3.52 billion expectations, potentially indicating that the company is bracing for a further slowdown.
Alphabet (GOOGL.US), which derives more than half of its profits from advertising, disappointed with lower YouTube revenue, cloud revenue estimates came in line with expectations but the company's cloud business is relatively small so it's even harder to talk about a positive surprise. Apple is losing more than 3% in post-close trading, with Amazon and Alphabet posting near 5% declines. Weaker reports also came from another tech giant Qualcomm. Also Starbucks failed to beat estimates for both revenue and profit, (especially sales outside the U.S was very weak), potentially indicating that consumers are getting more careful about their spending. Weaker reports from mega-techs show that falling inflation 'didn't come from nowhere' which, in the face of further 'disinflation process' in 2023, puts further pace of revenue and profit growth in question.
US500 chart, M30 interval. The major U.S. benchmark erases some of the upside and falls near the SMA50 (purple line) after the release of BigTech results Source: xStation5
