Big Tech investors were pleased on Tuesday as Alphabet, Google’s parent company, reported better-than-expected results. The company saw a 15% increase in revenue compared to the same time last year, with ad revenue surpassing expectations. Google Cloud also showed strong growth of 35% from the previous year, earning $11.4 billion last quarter, which exceeded analysts’ predictions of $10.5 billion. Despite facing regulatory challenges, including an antitrust trial, Alphabet’s stock rose by 6% after the earnings announcement. This successful performance by Alphabet reassures investors concerned about a potential slowdown in AI demand.
On the other hand, AMD, one of Nvidia’s competitors, gave a disappointing revenue forecast for the current quarter, raising concerns about a slowdown in AI sales. Today, investors are looking forward to hearing from Microsoft and Meta regarding their quarterly performance. Earnings announcements will continue with Apple and Amazon later this week, followed by Exxon and Chevron on Friday.
Meanwhile, BP announced mixed quarterly results, reporting the slowest profit growth in nearly four years due to weak oil prices. The company’s $1.75 billion buyback program was received positively, but caution was advised as BP warned of a potential change in their buyback strategy due to ongoing challenges in the oil and gas market, causing a 5% drop in shares.
In the oil market, US crude oil prices remained under pressure, with resistance near the $70 per barrel level. Geopolitical tensions that previously supported oil prices have eased, replaced by concerns about Chinese growth and supply/demand dynamics. The World Bank predicts a global oil supply surplus of 1.2 million barrels per day next year, raising questions about potential intervention by OPEC to stabilize prices.
Turning to economic data, the US jobs market showed signs of weakness, with job openings falling to their lowest levels since 2021. The US dollar index retreated from recent highs, with the US 2-year and 10-year yields testing downside levels. The focus today is on the ADP report, which is expected to show an increase of around 110,000 new private jobs in October. A weaker-than-expected report could further support the Fed’s dovish stance and weigh on the US dollar.
In Australia, higher-than-expected inflation data for Q3 was reported, but concerns about Chinese stimulus measures and iron ore prices continue to pressure the Australian dollar. In Europe, major Eurozone countries are set to release their October CPI numbers, which are expected to show an uptick. A positive CPI reading could support the euro against the US dollar.
Elsewhere, the UK budget announcement is anticipated, and the USD/JPY pair is consolidating ahead of the Bank of Japan’s decision. Bitcoin prices have surged to levels not seen since March, influenced by expectations of a Trump victory in the upcoming presidential election. This optimism has also boosted Trump-friendly assets, although uncertainties remain regarding the election outcome.
