Financial market research and analysis

US markets closed mixed, with the Nasdaq recording its worst session in a month following grim results and outlook from Facebook. Facebook finished the session 19% lower as investors digested a new weaker era for the tech giant. Meanwhile, the Dow continued to celebrate improved relations between the EU and US, in addition to increased optimism of a NAFTA deal. The Dow finished 0.4% higher.

Amazon profits double expectations

Cementing the see-saw action in tech stocks across this week, Amazon reported through the roof earnings, double expectations at $5.07 per shares vs exp. $2.57 sending its shares 3% higher in after-hours trading. Whilst revenue experienced a slight miss, the phenomenal profits thanks to its high earning cloud business and advertising, sent a wave of relief through the markets after Facebook’s shocker just 24 hours earlier; even Nasdaq futures were looking brighter.

Twitter reporting

Amazon won’t be the only tech stock in focus on Friday, with Twitter also reporting its quarterly figures. Cost will be under the spotlight as investors look to see whether Twitter could keep costs under control at a time when regulatory pressure is on the up, and the firm is pursuing a video strategy.

With tech stocks back in favour thanks to Amazon’s after the bell surprise, combined with a stronger finish on the Dow; Asian stocks also moved northwards. Europe looks set to continue the trend.

BP to buy BHP’s south US shale assets

On the FTSE, BP will be in focus after agreeing to buy BHP’s shale assets in the south US for $10.5 billion. This marks the end of an era for BHP as it gives in to pressure from activist investors Elliott Advisors and sells the site, which it purchased at the height of the oil boom. BP investors are expected to cheer the news on the open, with expectation running high that an increased dividend will come off the back of this, as a result of the additional earnings and cash flow.

US GDP to push dollar towards $95.50?

The first look at US Q2 economic growth is due today. The preliminary figure is expected to show an impressive 4.2% year on year growth, a substantial increase from Q1. Whilst some analyst’s forecasts had been pointing to even stronger growth, the slew of misses on Thursday, including a miss in durable goods, have raised a few questions as to whether that level of growth will be achievable.

A strong GDP figure will support expectations that the Fed will look to raise rates 4 times across the year. Whilst 3 rates hikes are fully priced in, investors remain unsure about the fourth which is only 65% priced in.

A solid GDP print, boosting rate hike hopes could see the dollar extend gains from the previous session and push towards $95.50. Meanwhile, a surprise to the downside could see the dollar target $93.80.

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