Tech Earnings Recap & Why The Fed Sent Stocks Higher This Week

On today’s episode of the Zacks Friday Finish Line, Associate Stock Strategist Ryan McQueeney and Editor Maddy Johnson discuss the Fed’s new dovish tone and recap earnings results from Apple, Facebook, Microsoft, and Amazon.

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Stocks surged in mid-week trading after the conclusion of the Fed’s latest policy meeting. Wall Street loved that the central bank took a newly dovish stance, replacing language that called for “further gradual increases” to interest rates from its policy statement.

The Fed’s official stance now is that it “will be patient as it determines” the future of rate hikes. Fed Chair Jerome Powell added in his news conference that the “case for raising rates has weakened somewhat.” The monetary policy maker also noted that its balance sheet reduction policy, which Powell said was on “autopilot” just last month, could change based on new economic developments.

As a dovish Fed sent stocks higher, investors also received financial updates from several of the world’s largest and most influential technology companies.

Notably, Apple (NASDAQ:AAPL) on Tuesday posted its highly-anticipated earnings report. The iPhone maker managed to beat expectations that were lowered after last month’s profit warning, and the stock moved higher on better-than-feared guidance. Nevertheless, Apple’s report detailed its first holiday-quarter decline in revenue and profit in over a decade.

Things were a bit better over at Facebook (NASDAQ:FB) , which also reported this week amid nervous sentiment surrounding its business. Facebook notched quarterly earnings of $2.38 per share, easily topping the Zacks Consensus Estimate. Revenue was up 30% and ahead of top-line estimates.

However, Facebook did warn that its next report could mark a slowdown. The social media giant expects revenue deceleration in the ongoing period, and for the full fiscal year, it forecast a 40% to 50% rise in expenses as it continues to deal with content and security concerns.

Another major tech company that reported this week is Microsoft (NASDAQ:MSFT) . The Redmond, Washington-based software pioneer announced better-than-expected earnings and revenue, with key growth segments such as Dynamics 365 and Azure maintaining their recent momentum.

Microsoft’s biggest cloud rival, Amazon (NASDAQ:AMZN) , also revealed strong growth for the just-reported quarter. Amazon on Thursday said that AWS operating income improved 61% from the year-ago period on more than 45% higher revenue. The stock did slip in the wake of the report thanks to muted revenue guidance, but Amazon and Microsoft certainly reminded investors that public cloud services are still expanding at rapid rates.

Make sure to check out today’s Friday Finish Line to hear Maddy and Ryan discuss all of these stories!

If you feel that we missed something, or if you want us to cover a different story, shoot us an email at podcast@zacks.com. Make sure to check out all of our other audio content at zacks.com/podcasts, and remember to subscribe and leave us a rating on Apple Podcasts.

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