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What’s happening: Shares of Amazon.com Inc fell in after-hours trading on Thursday, following the release of the company’s fourth-quarter results.
What happened: The Internet giant reported better-than-expected sales and earnings for the fourth quarter.
However, Amazon’s soft revenue guidance for the current quarter exerted pressure on the stock.
How were the results: The Seattle, Washington-based company reported low double-digit growth in sales for the three months ended December 31.
Why it matters: Amazon recorded capital expenditure of $26.3 billion during the fourth quarter. Much like its Big Tech peers, the company spent heavily on AI. Alphabet recently announced that its capex could increase to $75 billion this year.
The Black Friday week and Cyber Monday proved to be record breaking for Amazon. Its online store sales climbed 7% to $75.56 billion in the quarter, topping expectations.
The company recorded sales growth in its all segments, with sales in North America growing 10% year-over-year to $115.6 billion and International sales rising 8% to $43.4 billion. Amazon Web Services saw a 19% year-over-year surge in sales to $28.8 billion during the quarter.
Management guided to net sales between $151 billion and $155.5 billion for the first quarter, which represents 5% to 9% year-over-year growth. However, the figure came in short of market estimates of $158.5 billion.
The company projected an unfavourable currency impact of $2.1 billion in the current quarter, while 2024 being a leap year could impact sales by about $1.5 billion.
Amazon guided to operating income of $14 billion to $18 billion for the first quarter, compared to $15.3 billion in the year-ago quarter.
How shares responded: Amazon’s shares fell 4.1% to $229.15 in the extended trading hours on Thursday, following the release of quarterly results. The stock has jumped more than 8% year to date.
What to watch: Investors will continue monitoring the company’s investments in AI, which could significantly impact overall results ahead.
Context: The CAD/USD forex pair edged lower this morning amid strength in the US dollar.
Details: Canada’s key economic indicator showed a sharp decline in purchasing activity. The Ivey Purchasing Managers Index dipped to 47.1 in January, from 54.7 in the previous month. The figure also came in below market estimates of 53.
The latest reading showed a slip back into the contraction zone and reached the weakest mark since December 2020, further increasing prospects of a dovish stance from the Bank of Canada.
Some strength in the US dollar exerted pressure on the CAD/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, edged higher to 107.71 this morning.
However, a rise in the price of crude oil, one of Canada’s major exports, lent some support to the loonie. WTI crude oil prices gained around 0.5% to trade at $70.94 a barrel this morning.
The CAD/USD pair slipped to 1.4311 this morning. The S&P/TSX Composite Index had declined 0.14% to close at 25,534.49 on Thursday.
What to watch: Investors await the release of economic data on Canada’s unemployment rate (1730 UAE Time), employment change (1730 UAE Time) and average hourly wages (1730 UAE Time) today.
The unemployment rate in Canada, which fell to 6.7% in December, is expected to increase to 6.8% in January. Employment in Canada, which surged by 91,000 in December to record the biggest rise since January, is projected to increase by 25,000 in January. Analysts expect average hourly earnings to rise by 3.7% year-over-year in January.
Other Markets: European indices closed higher on Thursday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 Index up by 1.21%, 1.47%, 1.47% and 1.17%, respectively.
US President Donald Trump indicated the unveiling of a plan to end the ongoing war between Russia and Ukraine at the Munich Security Conference in Germany. The news sent the safe-haven US dollar index slightly higher in forex trading this morning.
Philippines’ manufacturing production grew by 0.4% year-over-year in December, compared to a 3.5% decline in the previous month, lending support to the PHP/USD forex pair.
The Bank of Mexico slashed its benchmark interest rate by 50 bps to 9.50% at its latest meeting, sending the MXN/USD pair lower in forex trading this morning.
The Bank of England lowered its benchmark rate by 25bps to 4.5%, which exerted pressure on the GBP/USD forex pair.
US President Donald Trump’s media company, Trump Media and Technology Group (TMTG), announced plans on Thursday to launch three ETFs, including one tracking the price of bitcoin. The news sent bitcoin higher by 0.8% to $97,372 this morning.
Spain’s industrial production (1200 UAE Time), Singapore’s foreign exchange reserves (1300 UAE Time), India’s foreign exchange reserves (1530 UAE Time), Mexico’s inflation rate (1600 UAE Time), Brazil’s car production (1700 UAE Time), new car registrations (1700 UAE Time) and balance of trade (2200 UAE Time), US non farm payrolls (1730 UAE Time), unemployment rate (1730 UAE Time), average hourly earnings (1730 UAE Time), Michigan consumer sentiment (1900 UAE Time), wholesale inventories (1900 UAE Time), Baker Hughes oil rig count (2200 UAE Time) and Baker Hughes total rigs count (2200 UAE Time), Russia’s foreign exchange reserves (1745 UAE Time) and full year GDP growth (1900 UAE Time), Turkey’s treasury cash balance (1830 UAE Time), as well as Argentina’s industrial production (2300 UAE Time).
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