European shares and US stock futures surge after earnings from Meta

European shares and US futures rallied on Thursday, as Facebook’s parent company Meta recovered in after-hours trading on better-than-expected profits.

The Stoxx Europe 600 regional index rose 0.9%, while futures contracts that track Wall Street’s S&P 500 gained 1.4%. Followers of the tech-heavy Nasdaq 100 index gained 2%.

The moves came out after the Meta posted slowest revenue growth since going public after the closing bell on Wednesday, but topping analysts’ earnings forecasts. The group brought in a profit of $7.5 billion in the January-March quarter, down more than a fifth year from the same period last year.

Shares of Meta were up 17% in pre-market trading. Apple and Amazon will post earnings after the close of trading on Thursday, with shares of both businesses mostly flat before the New York opening bell.

“The reporting season includes a period that is already behind us and what matters most is the companies outlook and visibility,” said Giuliano Gasparet, head of insurance asset management at Generali. market share of companies in the coming quarters”.

“Actually, it’s not as bad as people think. But we remain cautious because we are not confident in the supply chain, such as in the technology sector. . . This could depress earnings in the coming quarters. “

Illustrating the stresses big companies are feeling from supply chain disruptions and inflation, shares in J Sainsbury’s fell nearly 3% after the British supermarket group said it expected basic profit for the current year missed analysts’ forecasts due to “significant external pressures and uncertainties”, including rising costs and the “impact” of the war in Ukraine.

Later in the day, economists expect the United States to report that economic growth has significantly slow down in the first quarter, at an annual rate of 1%. This is down from the 6.9% pace in the final quarter of 2021.

In currencies, the euro weakened another 0.5% against the greenback to $1.05 after a jump in the dollar helped propel it higher. lowest level in five years this week.

Despite the slowing US economy, the dollar is also standing tall as the Federal Reserve prepares to tighten monetary policy aggressively to curb inflation, with chairman Jay Powell saying strongly signaled an interest rate hike of 0.5 percentage points in May.

“Not only do you get the Fed to raise rates significantly more than central banks in other developed markets, but whenever you have concerns about Russia and Ukraine, [the dollar] Seema Shah, chief global strategist at Chief Global Investors, said.

Shah added: “The Swiss franc doesn’t function as effectively as a commercial haven anymore as it does in Europe. “America is less exposed to the Russia-Ukraine conflict.”

The Japanese Yen continues to weaken on Thursday to break the 130 yen mark against the dollar, a new multi-decade low, after the Bank of Japan said it would keep bond yields at zero as soon as the Fed and central banks Other central banks prepare to raise interest rates quickly.

In the government debt market, the yield on 10-year US Treasuries, a benchmark for global borrowing costs, was steady at 2.81%. The yield on the policy-sensitive two-year bond was also unchanged at 2.57%.

Brent crude, the international oil benchmark, fell 0.1% to $105.2 a barrel.

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