Big Tech delivers... but oil steals the show

00:00:00: Strong earnings from Microsoft, Amazon and Alphabet reinforce the AI narrative with robust cloud growth confirming that heavy investment is translating into real revenue.

00:00:12: Yet the positive technology momentum is being overshadowed this morning by a sharp rally in oil prices, pushing inflation expectations around the globe higher and complicating underline growing uncertainty as markets will sass the path ahead, while the European Central Bank and the Bank of England will announce their latest monetary policy verdicts today with the same worries spinning around the policymakers' heads.

00:00:45: Rising inflation?

00:00:46: With no end inside in the Middle East mass!

00:00:49: So welcome to Swisscote's daily market talk this Thursday April thirtieth.

00:00:55: I'm Ipek Oskar Deshkaya And everything i'll say here is based on my own opinion and analysis And this is not financial advice.

00:01:11: So we had a busy after hours news flow with Meta, Microsoft, Amazon and Google all reporting their first quarter earnings After the bell yesterday!

00:01:21: The results were pretty much okay to say the least except for Meta.

00:01:25: Because of first three, Microsoft , Amazon & Google posted strong growth For their cloud divisions as they decided bag multiple AI models, which diversifies individual risks.

00:01:38: Amazon for example, poses fastest cloud growth in more than three years spending their increased past analyst expectations.

00:01:46: but the encouraging growth took to upper hand.

00:01:49: The share price fluctuated between gains and losses for a while But bulls finally gained over the bears And the share pulled out nearly three percent jump post earnings.

00:02:00: Google on the other hand went straight up by seven percent trading after beating expectations, while Microsoft's Azure posted a thirty-nine percent growth in the first quarter of this year as confirmation that they're turning massive AI spending into real revenue.

00:02:18: The After Hours price action was mixed at Microsoft leaving Microsoft pretty much flat.

00:02:23: Meta here was dark spot really because it slumped on single move around seven per cent in the after hours trading.

00:02:33: now projects to spend between one hundred thirty five to one hundred and forty-five billion US dollars.

00:02:38: To do what?

00:02:39: For his own ecosystem!

00:02:41: And the problem is, Meta IS a single bet really.

00:02:43: Spending on itself whereas the former three handouts computing power and chips to others.

00:02:49: to bet ON THE IDEA THAT AI IS GETTING BIGGER!

00:02:51: So at this point meta has become irrisky a bet.

00:02:54: it's not diversified & carries higher risk than its major peers.

00:02:58: I mean IT'S Carrying Its Own Risk AND AT A TIME COMPETITION IS RISING PITTELESSLY.

00:03:03: It Is Probably Not The Safest Place To Be But overall, things are going quite well for the AI exposed stocks.

00:03:11: The cloud revenue growth actually confirms that Happening and it is happening quite fast as fast.

00:03:19: As the industry leaders are telling us.

00:03:21: And letter will continue to back the chip makers, as well.

00:03:25: in this sense Cosby rose today fresh all-time high.

00:03:28: Today before giving back gains at Samsung announced mind blowing results.

00:03:32: if you're sitting I will start citing them.

00:03:34: The company reported revenue growth of sixty nine percent compared to same time last year.

00:03:40: net profit increased four hundred and seventy four percent an operating profit All thanks to the rise in membership prices due to the membership shortage and AI demand.

00:03:55: Alas, despite encouraging tech news now that futures are down by around .

00:04:11: Donald Trump rejected Iran's proposal to lift the naval blockade there, which could have brought Iran.

00:04:26: But no, Trump wants Iran to come to the table before it left as blockade and Iran says It will not negotiate.

00:04:33: As long as a blockade is there.

00:04:34: So they're turning round on round around.

00:04:37: result you have script rocketed nearly nine percent yesterday And has extended its gains above the one hundred thirteen dollar per barrel level at that time.

00:04:46: I'm talking here this morning.

00:04:47: Brand is also pushing about the one hundred and thirteen dollar per battle level this morning.

00:04:53: And high, unrising energy prices push inflation expectations higher around globe and make global central banks increasingly uncomfortable.

00:05:03: The Fed yesterday left its interest rates unchanged as widely expected but said that developments in the Middle East are contributing to a high uncertainty of economic outlook.

00:05:14: Fair enough there's nothing surprising.

00:05:17: What was unusual, however is three fat members opposed the post-meeting language that Central Bank would eventually resume.

00:05:27: cutting the interest rates.

00:05:28: They understandably insisted that it was too early to talk about cutting the race again when inflation outlook remains so cloudy and is worsening by today, So that thinking makes sense but this will also make the Fed's credibility harder When Kevin Warsh who supports the idea of lower interest rates Will take the helm Of The Fed in May probably as he Is now expected To be nominated.

00:05:51: Last after yesterdays Federal Reserve meeting And the fresh spike That we see In oil prices.

00:05:57: Well, activity on funds features now stopped pricing any interest rate cut this year in the US.

00:06:04: The probability of a December cut is around four percent.

00:06:07: Voila!

00:06:08: So the U.S.

00:06:08: two-year yield which also captures the Federal Reserve rate expectations rose to three point ninety-four percent.

00:06:20: pushing Today, the European Central Bank and the Bank of England are also expected to announce no change in their monetary policies today.

00:06:29: The rising inflation risk in Europe will keep the possibility of rate hikes on table for this year unless the war in Iran stops or growth slows enough.

00:06:40: tamed energy price pressures – demand destruction which happens when oil prices become too expensive to buy.

00:06:51: In the meantime, U.S.

00:06:52: dollar gains along with rising oil prices as you need more U. S. dollars to buy the more expensive energy but the US dollar's long-term outlook is weakening by today.

00:07:02: here is a brother issue.

00:07:04: The Iran war already costed twenty five billion us dollars for the u.s government and given that absurd diplomacy in place it will cost more.

00:07:12: Meanwhile, the US debt is rising with a big and bearable tax bill.

00:07:15: With politicians willing to add capital gain tax cuts into the mix The US government has also obliged today to refund illegally collected import tariffs last year.

00:07:27: The US debt, on the other hand is about to hit a forty trillion USD mark.

00:07:31: very shortly and more worryingly.

00:07:33: Interest payments have now surpassed defence to become third-largest spending category in the

00:07:39: U.S.,

00:07:39: behind only Social Security & Medicare.

00:07:42: That ultimately means that growth in the United States has been compromised And it is a serious problem when your debt is so high because the debt held by public is currently almost equal to the nation's GDP and CBO projects will rise to one hundred twenty percent of GDP within a decade, potentially to one-hundred thirty-one per cent if tax cuts are made permanent.

00:08:04: Global investors hate what they see meaning that replacement of US Treasuries continues perhaps in favor of gold.

00:08:12: In conclusion, gold dips are still interesting to buy for long-term investors and that's what the global central banks currently do!

00:08:21: According to World Gold Councils' latest report, Central Banks bought a net of two hundred forty four tons of gold in the first quarter of twenty six.

00:08:31: That was the fastest pace over one year.

00:08:34: So, this is all for today.

00:08:36: I'm Ipega Skardeshkaya and thank you for joining me!

00:08:38: And Thank You For All Your Beautiful And Supportive Comments!

00:08:42: I hope... This episode of Market Talk has been helpful and it's been insightful to you.

00:08:49: So please do not hesitate to leave your comments, reactions or questions below.

00:08:54: as usual Follow us on Instagram, on X, on LinkedIn but also on WhatsApp, Threads, Telegram & Blue Sky for regular market updates.

00:09:03: Subscribe our YouTube channel for daily market comment And don't forget to hit the like button on these videos.

00:09:11: so let me know that you enjoy them.

00:09:14: So I will meet you again tomorrow and until then, good day

00:09:33: trading!