Morning Bid: Gearing up for the tech roller-coaster ride

By Thomson Reuters Apr 24, 2024 | 11:37 PM

A look at the day ahead in European and global markets from Ankur Banerjee

Tech stocks are yet again set to sway the wider markets after a lacklustre forecast from Facebook parent Meta Platforms sparked a broad sell-off across regions.

Meta’s lower-than-anticipated revenue forecast along with guidance for higher expenses knocked $200 billion of its market value and dragged several of its rivals lower as worries over the surging cost of AI weighed on sentiment.

Asian tech stocks followed suit and were down 2%, with tech heavy Taiwan and South Korean stocks both down 1%. All eyes now will be on European tech stocks

Earnings from Intel, Alphabet and Microsoft will probably paint a fuller picture of how firms are faring in the AI race.

An earnings-filled Thursday awaits traders in Europe, with banking firms in the spotlight, while yen watchers keep looking around for a possible intervention now that the currency has breached past the psychologically key 155 per dollar level.

Deutsche Bank, BNP Paribas SA and Barclays Plc are due to report their earnings and the focus will be on their net interest margin especially with interest rates in Europe and UK priced to fall in the second half of the year.

Turkey’s central bank will not trim its policy rate from the current 50% until the fourth quarter, a Reuters poll of economists showed. Their policy decision is due later in the day.

The yen has firmly breached the latest line in the sand of 155 per dollar and while the spectre of intervention from Tokyo looms large, the lack of chatter from the Ministry of Finance may perhaps embolden yen bears.

The Bank of Japan concludes its policy meeting on Friday and the attention will squarely be on BOJ Governor Kazuo Ueda’s comments and his tone. Ueda will be mindful of avoiding the episode of 2022, when his predecessor’s dovish remarks triggered a yen plunge that forced Tokyo to intervene, spending an estimated $60 billion to defend the yen.

Key developments that could influence markets on Thursday:

Economic events: Turkey rate decision

Earnings: Deutsche Bank, BNP Paribas SA, Barclays PLC, AstraZeneca PLC and J Sainsbury

Intel Corp, Microsoft, Honeywell and Alphabet

(By Ankur Banerjee; Editing by Muralikumar Anantharaman)