Results from Google parent Alphabet and Microsoft yesterday have fed hopes on Wall Street that Big Tech is proving more resilient than recent concerns might suggest.
Revenue at Microsoft’s cloud division climbed 16 per cent in the first three months of 2023, a faster than expected rate that dispelled fears of a sharp slowdown in spending by their corporate clients following a boom for digital services during the Covid-19 pandemic.
Google’s search advertising business also topped forecasts and returned to growth, with revenue rising 2 per cent in the quarter after slipping 2 per cent in the final three months of last year.
The biggest US tech companies had been expected to produce little growth, if any, owing to difficult comparisons with the strong start they had to 2022 and a spending slowdown that has hit many parts of their businesses.
The better than expected performance pushed Microsoft and Alphabet shares higher yesterday and boosted rivals due to release earnings this week, including Facebook parent Meta, which reports today.
Here’s what else is happening today:
Results: Boeing, Danone, eBay, GSK, Heathrow, Hilton, Michelin and Standard Chartered report. See our Week Ahead newsletter for the full list. Also, Nestlé, PepsiCo and Kimberly-Clark among companies reporting resilient quarterly sales despite price rises. Read the story here
Microsoft-Activision deal: The UK’s Competition and Markets Authority is set to publish its final report on the $69bn takeover.
General Motors and Samsung SDI: A $3bn plan for a new US battery plant signals South Korean companies’ dominance of the North American EV battery supply chain, facing off Chinese rivals.
Five more top stories
1. Biden’s re-election bid: The US president has dispelled rumours that he will switch out his running mate, despite Kamala Harris’s low approval ratings as vice-president. Read our analysis of Joe Biden’s high-stakes election gamble.
2. Shares of First Republic continued to plunge on Tuesday as regulators in Washington and financiers on Wall Street scrambled to come up with a plan to stabilise the ailing bank. Read more here.
Markets: US stocks sank and government bonds rallied sharply as the steep sell-off in First Republic shares reignited fears about the banking sector.
3. Exclusive: Universal Music chief executive Lucian Grainge is under pressure from shareholders over a $100mn pay deal that has been criticised as “excessive”. This comes ahead of the company’s annual meeting next month. Read the story here.
4. A senior executive has left Citigroup days after a report that he had met with Jeffrey Epstein on several occasions while working at JPMorgan Chase. In response to a query from the Financial Times, Citi confirmed that Paul Barrett, head of the North American private capital group at its private bank, was no longer employed by the company.
5. Exclusive: Tencent is ramping up overseas investment in gaming assets with a focus on Europe, seeking to diversify away from China even as Beijing lifts punishing restrictions on the industry. Read the full story.
The Big Read
From a St Petersburg grandmother with her own art gallery to a teenager competing in international equestrian events, the family members of Russian warlord Yevgeny Prigozhin have led a charmed life. Western governments have struggled to impose costs on the Wagner founder’s relatives, even though they have been heavily involved in his businesses.
We’re also reading . . .
US and Philippines joint military exercise sinks ship in South China Sea: The rare manoeuvre is a clear signal of President Ferdinand Marcos Jr’s hopes to repel Chinese encroachment in the disputed waters and revive a military alliance with the US.
US car industry’s plans for going electric: Ford and General Motors are among those that have set out multibillion-dollar plans to sell only EVs within the next 20 years. Read the forecast from the International Energy Agency.
Related: Japan’s carmakers are caught in the middle as tensions between Washington and Beijing add to concerns over rising Chinese competition in the world’s largest auto market.
Chart of the day
China already has a potent economy, a big role in world trade and a huge military, writes Martin Wolf. Its relationship with the US is likely to determine humanity’s fate in the 21st century — whether there will be peace, prosperity and protection of the environment, or the opposites.
Take a break from the news
How does a Scottish-born socialist go about pricing his Napa Cabernet? DuMOL owner Andy Smith juggles philosophy with the incredible fame of his Sonoma Pinot Noir and Chardonnay, writes wine columnist Jancis Robinson.
Additional contributions by Tee Zhuo, Gordon Smith and Emily Goldberg
Source: Economy - ft.com
