Economy

Stocksak: Futures sink as Amazon and Apple fan recession fears

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© Stocksak. FILEPHOTO: This illustration of the Amazon logo is taken on April 29, 2022. It shows a decreasing stock graph. REUTERS/Dado Ruvic/Illustration

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(Stocksak). U.S. Stock index futures plunged Friday as gloomy predictions from megacaps Amazon.com and Apple raised fears that Fed’s aggressive interest-rate hikes were finally slowing the economy, and could potentially hammer corporate earnings.

Amazon.com Inc (NASDAQ) joined the chorus of Big Tech companies that disappointed investors this week. They forecasted a slowdown of sales growth for the holiday season and warned about a drop in consumers’ purchasing power. Premarket trade saw shares drop 13.6%.

Apple Inc (NASDAQ) warned revenue growth could be under pressure in December quarter, but shares edged 0.6% higher after the iPhone maker’s fourth quarter results showed some resilience.

Other megacap tech companies, such as Microsoft (NASDAQ :), Google-parent Alphabet NASDAQ : and Meta Platforms, reported lower earnings earlier in the week. Their shares were down between 0.4% & 1.3%. Their shares fell between 6 and 25% for the week.

Earnings from the tech sector were seen as a major test of corporate America’s strength in the face decades-high inflation. The dismal results have led to fears of a recession due to aggressive monetary policy tightening at the Federal Reserve.

A Fed rate hike of 75 basis points next week is priced in. However, traders are still awaiting key U.S. inflation data at 8:30 ET to see if the central bank will slow down its rate hikes in December.

The report will show that the Personal Consumption Expenditures Index, the Fed’s preferred measure of inflation, grew 5.2% in September after being stripped of volatile food costs and energy costs.

At 4:32 a.m. ET were down 97 points or 0.3% and down 30 points or 0.79%. They were also down 130.75 points or 1.16%.

Thursday’s report showed that the United States experienced a rebound of economic growth in its third quarter, which helped ease fears of a slowdown.

Twitter was to be delisted by the New York Stock Exchange just days after Elon Musk’s $44 billion acquisition. Arch Capital Group Twitter will be replaced on Nov. 1 by (NASDAQ 🙂

Premarket, Tesla shares were down 1.1%

News Source and Credit

Stocksak Editorial

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