The news shaping the markets today

A series of explosions were heard in the southern Ukrainian city of Kherson late Wednesday. Amid ongoing tensions, safe haven investing sent the US dollar index higher this morning.

Japan’s industrial production grew 0.3% in March, following 2% growth in the prior month. The latest figure missed market expectations of 0.5% growth, exerting pressure on the JPY/USD forex pair.

New Zealand’s trade deficit widened to NZ$392 million in March, from NZ$41 million in the year-ago month. The news sent the NZD/USD pair lower in forex trading this morning.

South Korea’s Business Survey Index on business conditions in the manufacturing sector improved to 87 in April, from 84 a month ago. Despite this, the KRW/USD forex pair remained under pressure mainly due to strength in the US dollar.

Australia’s import prices rose 5.1% in the first quarter of 2022, following a 5.8% acceleration in the previous quarter. The news sent the AUD/USD pair lower in forex trading this morning.

What’s happening: Shares of Meta Platforms rose sharply in after-hours trading on Wednesday, despite the company missing revenue estimates for the first quarter.

What happened: Facebook’s parent was able to beat earnings expectations, despite recording its weakest revenue growth since going public. The company also warned that the recent negative trends could continue in the current quarter.

How were the results: The social media and metaverse giant reported a decline in profits for its first quarter, but the figure still topped market views.

• Revenues rose 7% to $27.91 billion, missing Street expectations of $28.21 billion.
• Profits came in at $7.5 billion, down 21% from the year-ago quarter.
• The company reported $2.72 per share in earnings, beating the consensus estimate of $2.56.

Why it matters:More than $220 billion had been wiped off from Meta’s market value after the company released its fourth-quarter results, in the biggest stock sell-off since the company went public. Investors closely monitored user numbers of Facebook and Instagram, with the younger audience seeming to prefer TikTok. The company had launched Reels to compete with TikTok and attract the youth to its Instagram app. The daily active users for Meta’s “family” of apps rose 6% year-over-year to 2.87 billion, while monthly active users came in at 3.64 billion in the first quarter. Facebook reported 1.96 billion daily active users, up 4% year-over-year, while its monthly active users rose 3% year-over-year to 2.94 billion. Ad impressions grew 15%, with ad pricing declining 8%. Meta’s Reality Labs segment recorded a net loss of $3 billion on $695 million in revenues. Management guided to revenues between $28 billion and $30 billion for the current quarter, short of the consensus estimate of $30.6 billion. The company said its revenues had come under pressure due to the ongoing war in Ukraine. Meta reduced its projection for expenses in fiscal 2022 from between $90 billion and $95 billion to between $87 billion and $92 billion.

How shares responded: Meta’s shares jumped 18.4% to $207.08 in extended trading, following the release of quarterly results. The stock had declined 3.3% during the regular trading session ahead of earnings. Meta’s shares have lost around 48% year to date.

What to watch: Investors will keep an eye on the ongoing Russia-Ukraine situation and stiffening competition from other social media platforms. Elon Musk’s deal to acquire Twitter will also remain in focus.

The markets today

US stocks will be in focus today ahead of a couple of major economic reports from the country

Context:US stocks made some recovery on Wednesday, following a broad sell-off in the previous session.

Details: The Nasdaq 100 suffered its worst daily decline since 2020 on Tuesday, with almost all tech stocks recording sharp losses. The S&P 500 is down around 12% from its record high, having declined below the key support level of 4,200 on Tuesday.

Better-than-expected earnings from several bigger companies provided some support to the US stock market on Wednesday. Shares of Microsoft gained around 5%, after the company reported upbeat quarterly earnings and issued an optimistic revenue forecast. Visa’s stock climbed more than 6%, after the company’s quarterly results exceeded market expectations.

Investors are also optimistic about Apple and Amazon reporting upbeat results, which are scheduled for release later today. Investors also responded to economic data from the US. The country’s goods trade deficit grew to an all-time high of $125.3 billion in March, versus $106.3 billion in the previous month. US merchandise imports grew 11.5% to a record $294.6 billion.

Wholesale inventories climbed 2.3% to $837.7 billion in March. The Dow Jones gained around 62 points to close at 33,301.93, while the S&P 500 advanced 0.21% to settle at 4,183.96 on Wednesday. The Nasdaq 100 remained almost flat, closing at 13,003.36, after losing around 0.5% earlier in the session.

What to watch: Investors await the release of economic data on GDP growth and initial jobless claims from the US today. The US economy, which expanded 6.9% during the final three months of 2021, is expected to grow by just 1.1% in the first quarter. Initial jobless claims are expected to decline to 180,000 in the latest week, from 184,000 in the week ending April 16. Markets will keep an eye on rising covid-19 cases, the Russia-Ukraine war, and rising inflation in the US.

Other Markets:European trading indices closed higher on Wednesday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 up by 0.53%, 0.27%, 0.48% and 0.73%, respectively.

Support & resistances for today

Market snapshot

What else to watch today

Spain’s consumer price index, unemployment rate and industrial confidence indicator, Turkey’s economic confidence index, and foreign exchange reserves, Italy’s Consumer confidence, manufacturing confidence and industrial sales, Eurozone’s economic sentiment indicator, industrial confidence indicator, selling price expectations, services confidence indicator, consumer confidence indicator and consumer inflation expectations, South Africa’s producer price inflation, France’s initial jobless claims and unemployed persons, Canada’s CFIB’s business barometer long-term index and average weekly earnings, Mexico’s unemployment rate, Brazil’s producer prices, government revenues and net payrolls, Germany’s inflation rate, US personal consumption expenditure, natural gas stocks change, and Kansas City Fed’s manufacturing production index, as well as Saudi Arabia’s bank lending growth and money supply M3.

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