1 February, 2024

ASX 200 Reaches Record High As Alphabet & Microsoft Stocks Tumble – She’s Got The Stocks – 1st February 2024

Celebrations were in order on the Australian stock market at the close of trade on Wednesday. The December quarter saw inflation cooling more than anticipated, sending the S&P/ASX 200 to an all-time high. The market thinks the RBA is done. The ASX 200 finished the day up by 80.5 points, or 1.06 per cent, reaching 7,680 points. This surpasses its former record close of 7,629, established in August 2021.

The technology sector led the way at the close of Wednesday’s trading session finishing at 1,854.6 up 0.38 per cent. Among the top performers were Xero, WiseTech and NextDC.

Following the Federal Reserve’s decision this morning, Powell indicated that a policy easing in March 2024 seems unlikely and until they are more confident about inflation consistently moving towards the two per cent goal. In response, the S&P 500 dropped by 1.6 per cent, marking its biggest decline since September. The downturn was primarily driven by major tech companies, the key drivers of the bull market. Notably, Microsoft and Alphabet experienced a slump as their results did not meet the high expectations of investors who had hoped for rapid gains from the artificial intelligence surge.

Despite record high share prices so far in January, some 23,670 tech workers have been laid off, the most in any month since March 23, according to the website Layoffs.fyi.

MACQUARIE TELECOM

According to Macquarie Analysts, one of its preferred stocks ahead of the Australian reporting season is Macquarie Telecom. “Following its recent announcement of DA approval for its new IC3W data centre in Macquarie Park should soon be in a position to share further details on facility cost/ramp-up as well as longer-term DC growth ambitions,” they wrote.

ALPHABET

Alphabet reported results that beat analysts’ expectations on Wednesday. But the stock sold off heavily in after hours. Prior to earnings, Alphabet was up 56 per cent for the year and climbed to a fresh high last week, exceeding the prior record from late 2021, the peak of the tech boom. CNBC quoted Brian Wieser, an analyst at Madison and Wall who said, “In my general conversations with public market investors and sell-side analysts, few have a correct view of the advertising market.”

MICROSOFT

Microsoft’s cloud growth disappointed some on Wall Street even as the company posted its strongest revenue growth since 2022, spurred by interest in new artificial intelligence products.

Revenue in the second quarter, which ended Dec. 31, rose 18 per cent to US$62 billion, while profit was US$2.93 a share, the company said in a statement Tuesday. Analysts polled by Bloomberg on average estimated per-share earnings of US$2.78 on sales of US$61.1 billion.

META

During a tense congressional hearing focused on child safety online, Mark Zuckerberg, CEO of Meta, was compelled to issue a public apology to families who claimed to have been harmed by his company’s social media platforms.

“Mr. Zuckerberg, you have blood on your hands,” said Sen. Lindsey Graham, R-S.C., in an opening statement that drew applause.

Zuckerberg faced intense scrutiny from lawmakers at the Senate judiciary committee hearing. The main concern was whether social media companies, including his, have adequately shielded young users from child predators, pornography, and other dangerous content.

Republican Senator Josh Hawley persistently urged Zuckerberg to apologise to the victims. Responding to this, Zuckerberg turned to the crowd, where many families held photos of their lost loved ones and expressed his regret.

“No one should go through the things your families have suffered,” he acknowledged. He also mentioned that Meta is committing to “industry-leading efforts” to prevent such incidents in the future”.

Meta reports earnings tomorrow morning. Meta is up 30 per cent since last reporting three months ago. According to CNBC, Temu and Shein, two e-commerce companies based in China, have played a major role in boosting Meta’s advertising recovery. During the last earnings call in October, Meta’s finance chief Susan Li noted that the company has gained from Chinese advertisers targeting customers in other markets. However, if these companies reduce their spending, it could negatively impact Meta’s growth rates.

AMAZON

Amazon will reveal how holiday sales performed as it faces more China-linked competitors when it reports earnings on Thursday morning Australian time. Analysts will also look for an update on cloud unit AWS in the age of AI. Amazon is up 16 per cent since last reporting three months ago. The stock is down four per cent since hitting a new high during the day yesterday.

APPLE

Apple, also due on Thursday morning, is expected to narrowly avoid posting its fifth straight sales decline. Apple is up eight per cent in three months since the iPhone maker last reported. Shares are 7.6 per cent from the 52-week high hit in mid-December.

	Open	Close	Change
Macquarie Telecom Limited (ASX: MAQ)	$72.06	$71.20	-1.19%
REA Group (ASX: REA)	$182.37	$183.94	0.86%
Atlassian (NAS: TEAM) (USD)	$243.08	$249.77	2.75%
Xero (ASX: XRO)	$113.00	$110.79	-1.96%
Carsales.com (ASX: CAR)	$32.74	$33.01	0.82%
NEXTDC (ASX: NXT)	$13.66	$14.02	2.64%
WiseTech Global (ASX: WTC)	$74.50	$72.99	-2.03%
Appen (ASX: APX)	$0.34	$0.33	-4.41%
Airtasker (ASX: ART)	$0.31	$0.27	-12.90%
Telstra (ASX: TLS)	$4.00	$4.04	1.00%
Adobe (NAS: ADBE) (USD)	$606.48	$617.78	1.86%
Salesforce (NYSE: CRM) (USD)	$276.88	$281.09	1.52%
Apple (NAS: AAPL) (USD)	$194.50	$184.40	-5.19%
Alphabet (NAS: GOOGL) (USD)	$148.70	$140.10	-5.78%
Meta (NAS: META) (USD)	$390.70	$397.58	1.76%
Microsoft (NAS: MSFT) (USD)	$402.56	$397.58	-1.24%
Amazon (NAS: AMZN) (USD)	$156.87	$155.20	-1.06%
Nvidia (NAS: NVDA) (USD)	$613.62	$615.27	0.27%
Netflix (NAS: NFLX) (USD)	$544.87	$564.11	3.53%

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