Oil Giants in the Spotlight Amid Market Movements
- NexxtGen Markets
- May 2
- 5 min read
Futures Rise on Trade Optimism: Futures for the S&P 500, Dow, and Nasdaq surged after China indicated openness to trade talks with the U.S., boosting investor sentiment.
Tech Stocks Struggle Post-Earnings: After strong earnings reports, Apple (-4%) and Amazon (-2%) saw their shares drop after hours, driven by concerns over tariffs and cautious guidance. However, Microsoft (+7.6%) had its best day since 2022, thanks to robust earnings and AI growth projections.
FTSE 100 Extends Winning Streak: The FTSE 100 achieved its 13th consecutive gain, matching its best winning streak since 2017. Despite fresh U.S. tariffs and mixed corporate earnings, positive movements from Novo Nordisk (+2%) and Rolls-Royce lifted sentiment.
Bitcoin Remains Resilient: Bitcoin climbed to $95K, holding steady despite a 0.3% contraction in U.S. GDP. Traders are now closely monitoring upcoming Federal Reserve actions and global macroeconomic trends.
Non-Farm Payrolls & Earnings: Today’s NFP data is unlikely to show a significant impact from tariffs yet. Also, keep an eye on inflation data from the Eurozone and earnings from Chevron and ExxonMobil, as traders assess natural gas demand and AI-driven energy needs.
Market Movers
KIDZ: +371% to $5.36
Microsoft (MSFT): +8% to $425
NVIDIA (NVDA): +2% to $112
Eli Lilly (LLY): -12% to $794
News Highlights
Microsoft Surges: Microsoft saw its shares rise 7.6% after beating earnings expectations and posting impressive Azure growth. The company reported a 33% year-over-year surge in Azure revenue, driven by a 16-point contribution from AI demand. Additionally, a 53% increase in capital expenditures reflects the company's commitment to AI infrastructure, reassuring investors despite global uncertainties.
Oil Giants in Focus: Chevron and ExxonMobil are reporting their Q1 results today, with analysts forecasting profit declines, despite having delivered strong earnings in previous quarters. Both oil giants have been upgraded to Strong Buy by analysts, thanks to expectations of rising natural gas demand driven by AI-powered energy needs. Exxon’s diversified portfolio and Chevron’s strength in the Permian Basin continue to fuel optimism. Analysts see these companies as undervalued and resilient, supported by healthy cash flows and low debt, positioning them well for a long-term rebound.
Challenges for Apple and Amazon:
Apple: Although Apple exceeded earnings estimates, its stock fell after hours, reflecting concerns over valuation and future growth, especially with trade tensions and tariff uncertainty clouding the outlook for international sales. Apple remains down 18% from its December peak, currently trading at a forward P/E of 29.15.
Amazon: Amazon also posted a strong Q1 earnings beat, but its shares dropped post-earnings due to concerns over tariffs, trade tensions, and a slowdown in cloud revenue growth from AWS. Despite the dip, Amazon's forward P/E ratio of 31 suggests investor optimism, but the company’s cautious outlook keeps uncertainty high.
Apple vs. Amazon: A Year in Review:
Over the past year, Apple’s stock surged by over 24%, driven by strong iPhone sales and services growth. Meanwhile, Amazon’s stock is up only 3%, weighed down by valuation concerns and economic uncertainty. This divergence in performance continues to widen into 2025, with Apple rebounding sharply, while Amazon remains under pressure.
FTSE 100’s Resilience Amid Global Tensions
The FTSE 100 extended its winning streak to 13 sessions, matching its best performance since 2017, despite the headwinds of U.S. tariffs and global trade tensions. The index’s defensive sector tilt—towards healthcare, utilities, and consumer staples—has provided resilience amid uncertainty. Strong performances from Rolls-Royce and Novo Nordisk helped offset mixed earnings from companies like Lloyds and LSEG.
Is the FTSE 100 Worth Considering?: Despite global volatility, the FTSE 100 offers investors attractive characteristics, such as its global revenue exposure, high dividend yield, and defensive sector weightings. This makes it an appealing option for those looking for long-term income and stability in turbulent times.
BTC Holds Firm: Bitcoin saw a modest 1% increase, holding steady at $95K, despite a surprise 0.3% contraction in U.S. GDP that raised concerns about a potential recession. Altcoins followed Bitcoin’s lead with small gains, although ETF outflows indicate a cautious approach. Investors are focused on signals from the Federal Reserve, consumer data, and ongoing trade negotiations for direction.
Berkshire Hathaway’s Annual Meeting: Berkshire Hathaway is gearing up for its annual meeting, with shares up 17% year-to-date, nearing a 52-week high. The conglomerate, led by Warren Buffett, remains a bellwether in the market, and its annual meeting will be broadcast live by CNBC, providing insights into the company’s performance, investment strategy, and the economic outlook amidst changing trade policies.
Movers & Shakers
Eli Lilly & Co (LLY): -11.66% to $794 Despite a 45% revenue surge driven by demand for Zepbound (weight-loss) and Mounjaro (diabetes), Eli Lilly cut its 2025 profit forecast due to a major cancer drug deal. The stock fell as CVS favored competitor Wegovy.
McDonald’s (MCD): -1.88% to $314 McDonald’s posted its steepest drop in U.S. same-store sales (-3.6%) since 2020, attributed to weak consumer demand and bad weather. Although revenue missed estimates, EPS narrowly beat forecasts.
CVS Health Corp (CVS): +4.11% to $69.45 CVS beat Q1 estimates and raised its 2025 guidance. Its insurance business showed signs of recovery, with adjusted EPS of $2.25 compared to an expected $1.70. Despite macroeconomic risks, the stock gained 7% on optimism about operational improvements and Medicare growth.
NVIDIA Corporation (NVDA): +2.47% to $112 NVIDIA led a rally in chip stocks, with Microsoft and Meta reaffirming their massive AI infrastructure investments. As these companies continue to ramp up spending, other AI chipmakers like AMD, Broadcom, and Micron also saw gains.
Coming Up Today
10 AM – Eurozone Inflation (April Flash) expected to be 2.0% YoY (down from 2.2%) and 0.4% MoM (down from 0.6%). Core CPI expected to ease to 2.2% from 2.4%. Watch: Eurozone indices, EUR pairs.
1:30 PM – U.S. Non-Farm Payrolls (April), with jobs expected to rise by 170K, and unemployment steady at 4.2%. Wages expected to grow by 0.3% MoM and 3.9% YoY. Watch: U.S. indices, USD pairs.
What to Watch: April’s U.S. jobs report is expected to show a moderate increase of 133K jobs, with wages growing by 0.3% MoM. While the impact of tariffs is still unclear, wage data may be the key factor influencing market movement. Keep an eye on USD volatility in case of unexpected results.
Chevron and ExxonMobil are expected to report earnings tomorrow. Chevron has seen a nearly 9% decline over the last three months, while Exxon is down just 1%. Both stocks offer attractive dividend yields (5% for Chevron and 3.74% for Exxon), with energy bulls awaiting insights into natural gas demand and cost management.
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