Wall Street pushed higher on Friday, following the FTSE 100 (^FTSE) and European stocks for the last trading session of the week.
Google owner Alphabet (GOOG) crossed the $2tn valuation mark during the session after it revealed that first-quarter revenue jumped 15% while announcing its first-ever dividend of 20 cents a share alongside a $70bn (£56bn) stock buyback.
Google posted $80.5bn in revenue for the first quarter of 2024 and reported $1.89 in earnings per share, up from $1.17 – beating analysts’ expectations on both counts.
Read more: Trending tickers: Alphabet, Intel, Microsoft, Amazon and Anglo American
It came after the Bank of Japan (BoJ) kept its monetary policy unchanged overnight at the conclusion of its two-day meeting.
Interest rates remained on hold around zero, as widely expected, while the central bank removed a reference to the amount of government bonds it has roughly committed to buying each month.
It also issued fresh estimates projecting inflation to stay near its 2% target in the next three years, signalling its readiness to raise borrowing costs this year.
The Japanese yen fell to the weaker side of 156 per dollar in a knee-jerk reaction to the decision, and last stood at 156.15 per dollar.
“Something has come loose in the UK market, like a hose pipe that was blocked up suddenly gushing forth,” said Neil Wilson, chief markets analyst at FinalTo.
“The FTSE 100 rose to a new intraday high of 8,139.92 this morning as European indices were broadly higher on some better news from US tech giants Microsoft and Alphabet.”
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Bank of Russia leaves interest rates unchanged
View to the Moscow City business complex and Moscow river from the Sparrow Hills. (Pavel Losevsky) The Bank of Russia has left interest rates unchanged at 16% for a third meeting in a row but unexpectedly raised its average key policy rate forecast for the year.
It forecast that rates will stay high for longer this year, instead of hitting their 4% target, as Putin’s war effort risks fuelling inflation.
The Bank of Russia said:
“Due to the remaining elevated domestic demand, which outstrips the capabilities to expand supply, inflation will return to the target somewhat more slowly than the Bank of Russia forecast in February.
Nicholas Farr, emerging Europe economist at Capital Economics, said:
“While we expect inflation to reach a peak at around 8pc in the middle of this year, the backdrop of strong economic growth and loose fiscal policy mean that the CBR’s inflation forecast still looks too optimistic.
“Policymakers have signalled a preference today to keep real interest rates higher for longer to guard against upside inflation risks.
“We now expect the first interest rate cut to come in September (previously July) and for 300bp of interest rate cuts this year in total (previously 600bp).”
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Oil prices on track to snap two-week losing streak
Oil prices are on track to end higher this week, after two straight weeks of losses, following a US official expressing optimism over economic growth. It also rose as supply concerns lingered due to conflicts in the Middle East.
Brent crude futures gained 19 cents, or 0.2%, to $89.20 a barrel while Texas Intermediate crude futures rose 0.3% to $83.82.
So far this week Brent has gained 2.2%, while WTI is up 0.8%.
It came as US Treasury secretary Janet Yellen told Reuters that US economic growth for the first quarter could be revised higher, and inflation will ease after a clutch of “peculiar” factors held the economy to its weakest showing in nearly two years.
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Best savings accounts that offer above inflation rates
UK households are on the lookout for every little way to make their money go further amid the cost of living crisis, and savings accounts might help.
After years of low rates, high-yield savings accounts are having a moment as the Bank of England has kept interest rates at a 16-year high of 5.25%. While homeowners face higher mortgages, there is a silver lining in higher borrowing costs as consumers can now find UK savings accounts that offer more than inflation.
The UK rate of inflation came in at 3.2% in March, the lowest since September 2021, according to figures from the Office for National Statistics (ONS).
Savers should make sure they shop around to find the best deals and check what rate they are on – as they could still be sitting on a product that does not beat inflation.
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UK consumer confidence rises in April
UK consumer confidence improved by two points in April, new data has shown, as optimism about personal finances for the coming year remained stable.
According to GfK’s consumer confidence barometer, the reading climbed to -19 during the month – four measures were up in total, while one stayed the same in comparison to last month’s announcement.
The survey was conducted among a sample of 2,009 individuals from 2 April to 15 April 15th.
The index measuring changes in personal finances during the last year was up two points to -11. The forecast for personal finances over the next 12 months came in unchanged at 2, which was 15 points higher than this time last year.
Joe Staton, client strategy director GfK, said:
“While the overall index score remains negative, all of the underlying five measures this April are significantly better than they were last April. These improvements reflect the impact on household budgets of lower inflation and the anticipation of further tax cuts.
“However, we are a long way from the much firmer sentiment last seen in the period before Brexit, COVID and the conflict in Ukraine. There is a lot of ground to make up, and caution is needed in the face of continuing economic and fiscal challenges, and revised views on when the Bank of England might cut borrowing costs.
“But spring has arrived and maybe consumer confidence is, at last, slowly becoming brighter and heading in the right direction.”
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Google parent announces first dividend as revenues jump
Alphabet’s (GOOG) first-quarter revenue jumped 15% as Google’s parent company announced its first-ever dividend of 20 cents a share alongside a $70bn (£56bn) stock buyback.
Google posted $80.5bn in revenue for the first quarter of 2024 and reported $1.89 in earnings per share, up from $1.17 – beating analysts’ expectations on both counts.
The company also announced its first dividend, of $0.20 per share, and said the payout would become quarterly.
“Our leadership in AI [artificial intelligence] research and infrastructure, and our global product footprint, position us well for the next wave of AI innovation,” CEO Sundar Pichai said in the earnings release.
Shares in Alphabet were up roughly 15% in premarket trading. The jump pushed Alphabet’s market cap past $2tn.
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Darktrace to be bought by Thoma Bravo for $5.3bn
Mobile phone with website of British cyber security company Darktrace plc in front of business logo. Focus on top-left of phone display. (Timon Schneider) And sticking with takeover news…
Cambridge-based Darktrace has unveiled a $5.3bn deal to be acquired by US private equity firm Thoma Bravo.
The offer of 620p per share represents a 20% premium on Thursday’s closing share price.
Darktrace, which first listed in London in 2021, hit out at the state of the London public markets, complaining that its financial achievements “had not been reflected commensurately in its valuation” with its shares being consistently undervalued relative to US peers.
The firm added that the deal with Thoma Bravo would allow it to expand more quickly into overseas markets.
CEO Poppy Gustafsson said:
“This proposed offer represents the next stage in our growth journey and I am excited by the many opportunities we have ahead of us.
“Our technology has never been more relevant in a world increasingly threatened by AI-powered cyberattacks. In the face of this, we are expanding our product portfolio, entering new markets, and focused on delivering for our customers, partners and colleagues.”
Thoma Bravo said the acquisition was “an attractive opportunity to increase its exposure to the large and growing cybersecurity market”, and to invest to accelerate Darktrace’s development.
It comes after Thoma Bravo had walked away from takeover talks with Darktrace back in September 2022.
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Watch: How does inflation affect interest rates?
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