What's moving markets today: April 25, 2019
Microsoft is en route to top $1 trillion in market cap today.
Microsoft (MSFT) shares were up nearly 5% in premarket trading at $131.15, forecasting a valuation above the psychologically-important $1 trillion mark at the market open.
The tech company was boosted by Wednesday's first quarter earnings report. Microsoft reported a 41% jump in revenues for its commercial cloud business.
Apple (AAPL) is the only US company that has reached the $1 trillion market capitalization valuation so far, zooming past the mark last year. On Wednesday, Apple's market cap stood at round $977 billion at the close. With the company's earnings due on Friday, it could rally to top the key level again.
Amazon (AMZN) is in a similar boat, with its market cap standing at $936 billion at Wednesday's close. Amazon is reporting later in the day and could take course on the $1 trillion valuation.
Daniel Ives, a once-bullish Tesla analyst at Wedbush Securities, is expressing reservations about the company:
In our 20 years of covering tech stocks on the Street we view this quarter as one of top debacles we have ever seen while Musk & Co. in an episode out of the Twilight Zone act as if demand and profitability will magically return to the Tesla story," he wrote in a new note.
Ives said he's throwing in the "white towel on the name" and is downgrading the stock to a neutral from outperform and slashed his price target on the stock.
He expressed a loss of "confidence in the story with no pilot on the plane to navigate through this severe demand turbulence."
Tesla's shares are down more than 1% in premarket trading.
3M's (MMM), which makes Post-It notes and Scotch tape, had a "disappointing start to the year," according to its CEO.
- Sales slid 5% to $7.9 billion compared to the same time period a year ago.
- It slashed its full-year guidance.
- The conglomerate also said it's cutting 2,000 jobs around the world because of a "slower than expected" year ahead.
- The stock is sinking 10% in premarket trading, which is sending Dow futures lower.
Southwest (LUV) revealed that the government shutdown, the grounding of its Boeing 737 Max fleet and other "several unexpected events" cost the airline $200 million in the first quarter.
Earlier this month, Southwest said that it was extending changes to its flight schedule to account for the grounded aircraft's absence through much of the busy summer travel season.
The airline had a largely positive earnings report: Revenue and earnings per share slightly beat analysts' expectations.
Our first quarter 2019 net income was solid despite unexpected headwinds significantly impacting our performance," said CEO Gary Kelly in a statement.
Southwest's stock is up 3% in premarket trading.
Facebook (FB) expects an investigation by the US Federal Trade Commission could result in fines of up to $5 billion.
The company on Wednesday set aside $3 billion in legal expenses related to the investigation, which cut into its profit for the first three months of 2019.
But that hasn't dented the stock's momentum: It's up nearly 9% in premarket trading.
Facebook's profit for the quarter was $2.4 billion, a decrease of 51% from the same period a year ago.
Its ad sales business continues to power along: Revenue for the quarter topped $15 billion, a 26% increase from a year earlier.
There's plenty of banking news in Europe today.
Barclays (BCS) stock dropped 2% after earnings showed that its investment bank continues to struggle.
Shares in UBS (UBS) gained 1.5% in Switzerland despite a 27% decline in profit last quarter. CEO Sergio Ermotti maintains that the bank will post stronger results in the second half of the year.
Royal Bank of Scotland (RBS) announced that Ross McEwan has resigned as CEO. The bank returned to profit under his tenure, which started in 2013.
Merger talks between Germany's two biggest banks have collapsed.
The banks said in statements that execution risks, restructuring costs and capital requirements from a deal would have outweighed the benefits.
A merger would have created a German national champion better able to compete with larger US rivals.
Tesla (TSLA) lost $702 million in the first three months of the year, it reported Wednesday.
Its revenue was down 37% compared to the prior quarter.
Wall Street was already bracing for a bad quarter — but the results were far worse than expected. The company had posted back-to-back profits in the previous two quarters.
The disappointing performance was caused by factors including changes to US tax credits for Tesla cars and increased competition from rivals.
"None of these issues are going away. This is the new normal for Tesla," said Karl Brauer, executive publisher at Kelley Blue Book and Autotrader.
Shares are slightly lower in premarket trading.
Shares in Amazon have gained 26% so far in 2019, easily outpacing the rest of the S&P 500, which has advanced roughly 17%.
The e-commerce giant could add to its momentum when it reports earnings after the closing bell today.
Analysts expect Amazon (AMZN) to report sales of nearly $60 billion for the first three months of 2019, a 17% improvement over the same period last year.
Income is forecast to jump nearly 40% to $2.4 billion.