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LGT Navigator: Tech giants Alphabet and Amazon present strong quarterly figures

February 3, 2021

The successful earnings results of Alphabet and Amazon almost became a sideshow on Tuesday, as Amazon founder Jeff Bezos surprisingly announced that he will step down as CEO. US equity markets build on Monday's gains. The eurozone economy shrank significantly in 2020.

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With the quarterly results of Google parent Alphabet and Amazon published yesterday after the close of stock markets, technology stocks remain in the focus of investors. Amazon presented record figures for the final quarter of 2020 and reported quarterly sales of more than USD 100 billion for the first time. In addition to the strong results, the surprising resignation announcement of CEO Jeff Bezos made headlines. The Amazon founder will hand over the post later this year to Andy Jassy, who currently heads the cloud business. Bezos will remain with the company as executive chairman. Alphabet also had a successful quarter, beating market expectations with its earnings report. Shares were up around 7% in after-hours trading.

US stock markets went up for the second day in a row on Tuesday. The S&P 500 climbed +1.4%, the Dow Jones and the Nasdaq advanced +1.6% each. Asian stock markets show a mixed picture on Wednesday. In Tokyo, the Nikkei gains about 1%. In contrast, the Hang Seng Index in Hong Kong and the Shanghai Composite trade with slight losses. The slowdown in the Chinese service sector is causing subdued sentiment. Although activity increased in January, growth was the slowest since nine months ago, according to data from Caixin/Markit.

Euro economy posted record contraction in 2020

The eurozone economy contracted by -6.8% in the corona year 2020, the sharpest drop to date. After economic output in the eurozone countries had still grown by +12.4% in the third quarter, the recovery effect from the corona shock disappeared in the final quarter in view of the second wave of the pandemic, and GDP fell by -0.7% compared with the previous quarter. Economists had expected a decline of up to -0.9%. As also reported yesterday, Italy's economy contracted by -2% quarter-on-quarter in Q4 2020, which was expected by analysts. In Q3, Italian GDP had still grown by +16% during the recovery phase. 

Prices in France pick up slightly

In France, the inflation rate climbed at the beginning of the year to its highest level since last July. Compared to the same period last year, consumer prices rose by +0.8% in January, as reported by the statistics office Insee in Paris. Analysts had expected a significantly lower inflation rate of +0.5%, after the price level had stagnated in December on an annual basis. Prices for services in particular rose in January, while energy prices fell again, but not as sharply as in the previous month.

Australia's central bank expands its quantitative measures

In the fight against the economic consequences of the corona crisis, the Australian central bank announced an expansion of its bond purchases. The existing purchase program will be supplemented by a new program with a volume equivalent to EUR 65 billion. At the same time, the Reserve Bank of Australia left its key interest rate unchanged at the record low of +0.1% and reaffirmed its "guidance" according to which interest rates are expected to remain at a record low level until 2024. 

 

 

Economic Indicators February 3

MEZ Country Indicator Last
09:45 IT IHS Markit PMI Composite (January) 43.0
09:50 FR IHS Markit PMI Composite (January) 47.0
09:55 GE IHS Markit PMI Composite (January) 50.8
10:00 EZ IHS Markit PMI Composite (January) 47.5
10:30 UK IHS Markit PMI Composite (January) 40.6
11:00 IT Consumer Prices (January, y/y) -0.2%
11:00 EZ Consumer Prices (January, y/y) -0.3%
11:00 EZ Core Consumer Prices (January, y/y) +0.4%
14:15 US ADP Employment Growth Private Sector (January, m/m) -123,000
15:45 US IHS Markit PMI Composite (January) 58.0
16:00 US ISM Non-Manufacturing PMI (January) 57.7

Earnings Calendar February 3

Country Corporate Period
NO Orsted Q4
SP Banco Santander Q4
GB GlaxoSmithKline Q4
GB Vodafone Q3
US PayPal Q4
US Ebay Q4
US Biogen Q4

 

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi, +41 44 250 78 59, E-Mail: lgt.navigator@lgt.com
Source: LGT Bank (Switzerland) Ltd.

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US employment growth remains dynamic at the beginning of the year