Meta surges despite slow revenues growth
Facebook’s slowest revenues growth in a decade was taken in Wall Street’s stride, given that owner Meta Platforms had previously warned about rising competition from the likes of TikTok as well as the impact of Apple’s recent privacy update.
Revenues rose 7% to $27.9 billion (£22.2 billion) and operating income fell 25% to $8.5 billion (£6.8 billion), but Meta’s under-pressure share price jumped 18% in after-hours trading due to the latter figure being ahead of expectations.
Hargreaves Lansdown analyst Laura Hoy said: “The market seemed to take comfort in the fact that user numbers are back on the up after the group reported its first ever user-number decline in the fourth quarter.
“This is indeed a green shoot, though 6% growth isn’t exactly shooting the lights out. Still, with almost three billion people logging in each day mid-single digits may be the new normal.”
Meta impresses, US GDP figures due later
Tech sector valuations were boosted overnight after better-than-expected figures from Meta Platforms sent the Facebook owner’s shares up 18% in after-hours trading.
The company’s beat on first quarter earnings means Nasdaq futures are currently pointing to a 1.5% rise when the tech-laden index opens later, having been battered in recent days on fears over sharply higher US interest rates.
Results from Apple and Amazon are due after tonight’s closing bell, but for now traders have been happy to put April’s stock market volatility to one side and reflect on what’s been a largely positive earnings season.
Asian markets benefited from the improved sentiment, helped by pledges of further fiscal support from Chinese policymakers.
Today’s Bank of Japan meeting saw monetary policy left unchanged after the central bank cut its GDP forecast for 2022 to 2.9% from 3.8% and revised the inflation estimate from 1.1% to 1.9%. Unlike the Federal Reserve and other central banks, the Bank signalled that it has no intention of tightening policy.
Figures due this afternoon will show how the US economy performed in the first quarter of 2021, a period of continued resilience in the labour market. Expectations are for quarter-on-quarter growth of 1.1% and an annual figure of 7.3%.
Ahead of this key release, CMC Markets is forecasting that the FTSE 100 index will open 20 points higher at 7445.