Tech Market Volatility, Bitcoin Resilience, and Real Estate Balances Amid Inflation Worries | November 5 Market Recap

Big Tech Earnings and AI Spending Concerns

Recent quarterly earnings for Meta and Microsoft highlight continued growth, with each company posting results above Wall Street estimates. Meta reported higher-than-expected earnings and revenue, attributing part of this to significant investments in AI infrastructure. Microsoft also cited AI as a catalyst, especially in transforming traditional applications into AI-first business models. However, Wall Street’s response was mixed due to both companies’ forecasts of extensive spending on AI, which some investors worry could weigh on future profitability. This cautious response affected Meta and Microsoft shares, which each saw declines following the announcements.

Economic Updates and the US Growth Outlook

The US economy is showing resilience with a slight cooling in annualized GDP growth for the third quarter, now at 2.8%. Although below previous quarters, robust consumer spending is keeping the economy steady, signaling potential strength despite inflation and interest rate challenges. Analysts expect stability, though Ray Dalio, founder of Bridgewater Associates, voiced concerns over US debt and internal conflicts as potential headwinds to sustained growth.

Crypto Gains as an Election Hedge

In the world of crypto, Bitcoin has reached new highs, partially driven by anticipation of favorable regulatory attitudes from the upcoming U.S. administration, regardless of party outcomes. Token-based political contributions have surged this cycle, indicating that the next wave of lawmakers may support digital assets more actively.

Company-Specific Movements

Elsewhere, Reddit saw a major stock jump after hitting its first profitable quarter. Meanwhile, Coinbase and Roku struggled with softer quarterly earnings, each issuing lower forward-looking guidance, which impacted their stock prices. Carvana, on the other hand, exceeded earnings expectations and increased its year-end outlook.

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