Alibaba Earnings Top Estimates
In premarket trade on Thursday, Alibaba Group Holding Ltd. (BABA, +7.60%) reported first quarter earnings which beat expectations. As a result, the shares of the Chinese e-commerce giant surged 7 percent. Alibaba reported net income of 18 cents a share, or $467 million for the 1st-quarter. Also, adjusted earnings per share came in at 48 cents while revenue came to $2.81 billion. Both EPS and revenue reported beat the FactSet consensus of 43 cents EPS and revenue of $2.72 billion. Added to this, Alibaba also announced that as of the 10th of May, Daniel Zhang, the company’s current Chief Operating Officer, will replace Jonathan Lu as the Chief Executive. Meanwhile, Lu will remain on the board as the Vice Chairman. Since the beginning of 2015, Alibaba shares have been down 23 percent compared to the S&P 500 index (SPX) which has gained 1 percent. The shares of Alibaba are currently trading at $86.23 a share.
It takes a lot to keep the U.S. stock market down and this was clearly evident on Thursday. After 2 sessions of selling, stocks rebounded while volatility in the bond markets in Europe as well as the U.S. started to subside. Investors have now turned their attention to the closely watched nonfarm payroll report on Friday while Thursday brought in a stronger than expected weekly jobless claims report which also showed that layoffs in the U.S. are still at a fifteen year low. At the close of trading, the Nasdaq Composite index (COMP) advanced 0.6%, or 28 points, to 4,947 while the S&P 500 index (SPX) also climbed up 0.4%, or 9 points, at 2,089. Nine out of the 10 sectors of the benchmark index gained while the energy sector took a knock as a result of declining oil prices. Also on the upside was the Dow Jones Industrial Average (DJIA) which gained 0.6%, or 98 points, to 17,940. Also, as a result of an increase in German bond yields, global equity markets experienced volatility. The yield on ten-year German Bunds (TMBMKDE-10Y, +0.95%) advanced 22 basis points to 0.8 percent. Gains were however pared to trade unchanged at 0.64 percent.
On Thursday, in currency trading, the U.S. dollar (USD) traded higher. This came after data showed a decline in the number of people who filed for unemployment assistance last week in the U.S. According to a report by the Department of Labor, for the week ending 02 May, this number of people was at 265,000, up 3,000. The previous week’s total was at 262,000 while the numbers also beat expectations for an increase by 18,000 to 280,000. This data prompted positive sentiment among investors regarding the strength of the U.S. job market. The EUR/USD traded at 1.1265, down 0.74 percent while the GBP/USD declined 0.32% to trade at 1.5199 as investors remained cautious in response to elections in the United Kingdom on Thursday. Elsewhere, the AUD/USD traded at 0.7919, down 0.64%, the NZD/USD traded at 0.7438, down 0.79% while the USD/JPY held steady at 119.4. Also, the U.S. dollar index was at 94.72, up 0.59%.
On Friday, in early morning Asian trading, crude oil prices gained. This came after the commodity’s price declined overnight in response to investors shifting their attention to the monetary policies in the U.S. and China in order to pinpoint demand cues. WTI crude for delivery in June traded at $59.01 a barrel, up 0.12%, on the NYMEX. Meanwhile on Wednesday, WTI crude oil surged in response to the supply data, trading above $62 a barrel. Last week, the stockpiles of crude declined by 3.9 million barrels which beat expectations for a buildup of 1.5 million barrels and it also marked the first decrease on a week to week basis this year. Also on Thursday, Brent crude for delivery in June traded at $65.55 a barrel, down 3.28%, or $2.22, on the Intercontinental Exchange (ICE).