Main news: price rise due to possible embargo of Russian oil in the EU

The stock market is expected to end April on a negative note as disappointing news from Amazon, Apple and Intel weigh on sentiment. The Chinese currency and stocks jumped as the Politburo promised more support for economic policy ahead of the long weekend. The U.S. will release personal income and spending data for March, while the eurozone economy performed slightly better than the U.S. economy in the first quarter despite the outbreak of conflict on the continent. Oil prices continue to rise in anticipation of an EU oil embargo on Russia. Here’s what you need to know about the financial market on Friday, April 29.

1. AMAZON AND APPLE CAUSED DISAPPOINTMENT

Amazon shares fell sharply in the premarket after the e-commerce giant reported a weak start to 2022.

Amazon lost $3.8 billion in net income due to a decline in the value of its stake in electric van maker Rivian, but the disappearance of pandemic-era trends hit both its core e-commerce operations and its advertising business. E-commerce revenue rose 7% year-over-year, the slowest pace since Amazon began reporting it.

Apple shares also fell a more modest 2.4% after the company’s CFO Luca Maestri predicted that supply chain problems in the current quarter could reduce sales by $8 billion. The company’s report for the recently ended quarter beat expectations thanks to a better-than-expected 5.5% increase in revenue from iPhone sales.

2. CONTINUING CONTRADICTION IN CHINA

Chinese assets rose sharply ahead of the long holiday weekend after the State Council released a statement promising additional support for the economy.

The statement sent USD/CNH up more than 0.5% to 6.6215. This, however, was nothing more than a footnote to the worst month for the currency in 6 years when it lost over 4%.

Similarly, the Hang Seng Tech Index has gained more than 10% but is down about 60% over the past 14 months.

The State Council’s assurances were sparse on details and they did not resolve the inherent contradiction between its commitment to support manufacturing (particularly through infrastructure spending, as Xi Jinping promised this week) and its zero-tolerance COVID-19 policy, which it reiterated support for. Analysts were not convinced.

3. U.S. MARKET SET TO DECLINE; INTEL AND ROBINHOOD ALSO UNDER PRESSURE; BIG OIL COMPANIES’ EARNINGS IN FOCUS

U.S. stock indexes are set to open slightly lower later due to Apple and Amazon, which are expected to end a difficult April in the red.

By 06:15 a.m. ET (10:15 GMT), the Dow Jones futures were down 100 points, or 0.3 percent, while the S&P 500 futures were down 0.6 percent and the Nasdaq 100 futures were down 0.9 percent.

Tesla shares provided little support to the market, jumping 3% from a one-month low in the premarket after Ilon Musk said he no longer plans to sell shares to fund the purchase of Twitter. However, there were also notable declines in shares of Intel, down 3.5%, and Robinhood, down 11%, in response to weak quarterly updates and forecasts.

Today is a busy day for the hydrocarbons sector in terms of earnings reports, with Exxon Mobil, Chevron, Phillips and LyondellBasell reporting before the start of trading, as will pharmaceutical giants AbbVie and Bristol-Myers Squibb, Honeywell , Charter, Colgate-Palmolive and Aon PLC. Chevron failed to impress, missing earnings per share expectations.

4. US PERSONAL INCOME AND SPENDING DATA; EUROZONE GDP Q1 AND NEW HIGH IN APRIL CPI.

In the US, personal income and spending data for March will be released, along with some other interesting first quarter data to complement Thursday’s deceptively weak GDP numbers.

Also of interest is the price index for personal consumer spending in March, although it is unlikely to have much impact on next week’s Federal Reserve meeting, where there is near agreement to raise the target range for the federal funds rate by 50 basis points.

According to Paul Donovan, chief economist at UBS Global Wealth Management, yesterday’s eurozone GDP data showed that the economy still grew in the first quarter, a reflection of the fact that the economy in that region has once again contracted later than in the U.S. and has yet to squander its unanticipated savings.

Eurozone inflation hit a new record high of 7.5% in April, while in the UK the house price boom showed signs of finally cooling off. EUR/USD and GBP/USD rose.

5. OIL PRICES ROSE ON THE EVE OF A LIKELY EU OIL EMBARGO AGAINST RUSSIA

Crude oil prices continue to rise in anticipation of an EU embargo on Russian oil, likely to be announced next week. An emergency meeting of the bloc’s energy ministers is scheduled for Monday.

The embargo will force European buyers to seek a limited range of suppliers to replace their oil imports from Russia. Newswires reported that India hopes its biggest oil and gas companies will replace Europeans as buyers of Russian oil and investors in the Russian oil sector.

By 06:25 a.m. ET (10:25 GMT), U.S. WTI crude futures rose 1.0% to $106.44 a barrel, while Brent crude futures rose 1.4% to $108.72 a barrel.

At 13:00 ET (17:00 GMT), the US rig count from Baker Hughes will be released, which last week showed the smallest net increase in 6 weeks.


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