Firefighting cash burn
Alphabet shares plunged 10% after earnings disappointed and investors worried about its cash burn and spending, while Microsoft rose after a cloud business beat. The Federal Reserve held rates steady, and energy markets remained tense.
1. Big Tech spending concerns
Alphabet's stock plunged 10% overnight as its incoming earnings disappointed and markets fretted about the scale of its cash burn and spending. Microsoft shares advanced after a big beat in its cloud business and as it missed its own capex guidance; Oracle rose after projecting a rapid return to positive free cash flow over the coming three years.
2. Rates and energy
The Federal Reserve kept rates unchanged, with two dissenters, while interest rate markets pared back some expected Fed tightening. The Bank of Canada raised rates for the first time in three years, as expected. Oil hovered near recent highs, and European natural gas futures topped 100 euros for the first time in four years.
3. ECB leadership change
The European Central Bank is expected to hold rates at its meeting. President Christine Lagarde is expected to announce she will step down on February 7, prompting speculation about her successor and possible implications for ECB policy.
