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Amazon’s shares rise after strong Q1 results

Wednesday, May 01, 2024

Today’s headlines

What’s happening: Shares of Amazon edged higher in after-hours trading on Tuesday, following the release of the company’s quarterly results.

What happened: The ecommerce giant said it recorded its fastest-ever delivery speeds during the first quarter.

Despite reporting a beat on sales and earnings, Amazon issued a lower-than-expected outlook for its second-quarter revenues.

How were the results: The Seattle, Washington-based company reported a low double-digit increase in sales for the first quarter.

  • Net sales grew by 13% year-over-year to $143.3 billion, topping the consensus estimates of $142.5 billion.
  • Earnings came in at 98 cents per share, surpassing Wall Street expectations of 82 cents per share.

Why it matters: Continued AI investments by companies resulted in Amazon recording growth in cloud computing. The Amazon Web Services segment recorded sales of $25 billion for the first quarter, up 17% year-over-year.

“The combination of companies renewing their infrastructure modernization efforts and the appeal of AWS’s AI capabilities is reaccelerating AWS’s growth rate,” CEO Andy Jassy said during the earnings call.

The company is, however, lagging its peers in this respect. Microsoft and Alphabet reported growth in cloud computing revenues of 31% and 28%, respectively, for the January-to-March quarter.

Amazon’s North American sales climbed 12% year-over-year to $86.3 billion, while the International segment’s sales gained 10% to $31.9 billion last quarter.

Regarding the speed of its deliveries, Amazon said that more than 2 billion global units had arrived the same or next day during the first quarter. This marked its fastest-ever delivery speed. Amazon’s shipping costs grew by 10% year-over-year to $21.8 billion in the quarter.

Management guided to net sales between $144 billion and $149 billion for the second quarter, below market estimates of $150.1 billion.

How shares responded: Amazon’s shares rose 1.2% to $177.16 in extended trading on Tuesday, following the release of quarterly results. The stock has added 17% year-to-date.

What to watch: Investors will watch the company’s global investments, which could boost its overall results ahead. The company is investing $5.3 billion in Saudi Arabia and $5 billion in Mexico to grow its AWS infrastructure. Amazon also plans to invest $10 billion in two datacentres in Mississippi.

The markets today

The Canadian dollar will be in focus today ahead of manufacturing data

Context: The CAD/USD forex pair fell on Tuesday, as investors assessed Canada’s GDP growth data.

Details: Data from Statistics Canada showed the country’s economy weakening during the first quarter of the year. This fuelled speculations of the Bank of Canada beginning to cut interest rates in June.

Canada’s gross domestic product grew by 0.2% in February, below market expectations of 0.3%, while GDP growth in March was likely unchanged. The country’s economic growth in January was also revised lower from 0.6% to 0.5%.

A decline in the price of crude oil, one of Canada’s major exports, weighed on the Canadian dollar. WTI crude oil for June delivery tumbled 70 cents to settle at $81.93 per barrel on Tuesday.

Strength in the US dollar exerted further pressure on the loonie. The US dollar index, which measures the greenback’s performance versus a basket of major peers, gained around 0.6% to 106.22 on Tuesday.

The CAD/USD forex pair fell around 0.9% to 1.3781 on Tuesday, moving closer to the five-month low level of 1.38 recorded on April 16. The S&P/TSX Composite Index declined 1.35% to close at 21,714.54.

What to watch: Investors await the release of manufacturing PMI data from Canada today. The S&P Global Canada manufacturing PMI, which rose slightly by 0.1 points from the prior month to 49.8 in March, is expected to increase further to 50.2 in April.

Markets will also continue monitoring the US dollar and crude oil prices, which impact the loonie.

Other Markets: European indices closed lower on Tuesday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 Index down by 0.04%, 1.03%, 0.99% and 0.68%, respectively.

The news shaping the markets

Norway announced plans to accelerate its aid to Ukraine by NKr7 billion, or $633 million, this year. The news sent the safe-haven US dollar index higher in forex trading this morning.


Japan’s au Jibun Bank manufacturing PMI was revised lower to 49.6 for April, versus a preliminary reading of 49.9, which exerted pressure on the JPY/USD forex pair.


Ireland’s AIB manufacturing PMI fell to 47.6 in April, from 49.6 a month ago. This being the second straight month of contraction in factory activity sent the EUR/USD pair lower in forex trading this morning.


Australia’s Ai Group Industry Index declined by 3.6 points to a reading of -8.9 points in April, exerting pressure on the AUD/USD forex pair.


The American Petroleum Institute said US crude oil stockpiles had surged by 4.906 million barrels in the week ending April 26, following a decline of 3.23 million barrels in the prior week, which sent the WTI crude oil prices lower this morning.

What else to watch today

Saudi Arabia’s GDP growth rate, Australia’s commodity prices and CoreLogic home value index, UK’s manufacturing PMI and Nationwide house price index, US MBA mortgage applications, ADP employment change, S&P Global manufacturing PMI, ISM manufacturing PMI, job openings, construction spending, job quits, crude oil inventories, gasoline stocks, gasoline stocks, and Federal Reserve interest rate decision, India’s money supply M3, Brazil’s balance of trade, as well as Mexico’s government budget value.


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